Conseco Finance Svc v. Shinall

Court of Appeals for the Fifth Circuit·Decided October 2, 2002·No. 01-60522·Unpublished

Opinion

UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT

No. 01-60522

CONSECO FINANCE SERVICING CORPORATION, Plaintiff-Appellee,

VERSUS

MARY SHINALL and JOHNNIE PAYNE, Defendants-Appellants.

Appeal from the United States District Court for the Southern District of Mississippi (01-CV-107)

October 1, 2002

Before SMITH, BENAVIDES, and PARKER, Circuit Judges. PER CURIAM:*

Appellants, Mary Shinall and Johnnie Payne, appeal the district court’s denial of their motion to dismiss and the orders compelling arbitration and staying their state court action. For the reasons that follow, we affirm.

*

Pursuant to 5TH CIR. R. 47.5, the Court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5TH CIR. R. 47.5.4.

BACKGROUND

In the summer of 1999, Appellants, both residents of Mississippi, visited Lakeland Drive Mobile Home Sales, d/b/a Lakeland Mobile Home Sales (hereinafter “Lakeland”) in Vicksburg, Mississippi. David Walters, also a resident of Mississippi and a representative of Lakeland, assisted Appellants in viewing the two homes on Lakeland’s lot available for sale. The home Appellants decided to purchase was a used mobile home. Appellants made a down payment and Lakeland agreed to finance the remainder of the purchase. In completing the purchase transaction, Appellants executed a Manufactured Home Retail Installment Contract and Security Agreement (hereinafter “Contract”) containing an arbitration clause. Although Lakeland agreed to finance the purchase, the Contract was assigned to Conseco Finance Servicing Corp.1 (hereinafter “Conseco Servicing”) shortly after it was executed.

The home was delivered to Appellants and set up on their lot, however, Appellants did not approve of the home’s condition and refused to occupy it. Needless to say, the payments became delinquent and the mobile home was repossessed. On May 30, 2000, Appellants brought suit against Lakeland, Walters, Conseco

1 Conseco Finance Servicing Corp. is a Delaware corporation with its principal place of business in St. Paul, Minnesota. At the time of sale, Conseco Finance Servicing Corp. was known as Green Tree Financial Servicing Corporation.

Servicing, and Conseco Finance Corp.2 (hereinafter “Conseco Finance”) in the Circuit Court of Claiborne County, Mississippi, seeking damages in connection with the purchase of the mobile home. Appellants’ complaint asserted that the state court defendants made misrepresentations with respect to the age, condition, and cost of the mobile home. In addition, the complaint asserted that the defendants engaged in an egregious pattern and practice of fraud and deception in the sale and financing of mobile homes.

On June 29, 2000, Conseco Servicing and Conseco Finance (collectively hereinafter “Conseco”) moved to dismiss the state court action and to compel arbitration pursuant to the arbitration clause in the Contract. On July 19, 2000, Appellants moved the state court to continue or stay, pending discovery on the issue of arbitrability, any hearing on Conseco’s motion to compel arbitration. Subsequently, the state court granted Appellants’ motion and entered an order on October 12, 2000, staying the arbitration issue and permitting the parties to conduct full discovery. Shortly thereafter, Appellants propounded written discovery to all defendants.

On February 12, 2001, Conseco Servicing filed the instant suit in federal court seeking an order to compel arbitration of Appellants’ state court claims and to stay the state court action

2 Conseco Finance Corp. is a Delaware corporation with its principal place of business in St. Paul, Minnesota. Conseco Finance Corp. is the parent company of Conseco Servicing.

pending arbitration. Appellants responded on February 23, 2001, and moved the district court to dismiss, or in the alternative, to stay the action pending resolution of the state court proceedings. On May 3, 2001, Conseco Finance moved to intervene in the district court action, compel arbitration of Appellants’ state court claims, and stay the state court proceedings pending arbitration.

The district court entered its Memorandum Opinion and Order on June 8, 2001, denying Appellants’ motion to dismiss, ordering Appellants to arbitrate their state court claims against Conseco Servicing, and staying the state court proceedings relative to Conseco Servicing. Similarly, on June 19, 2001, the district court granted Conseco Finance’s motion to intervene and issued an order compelling Appellants to arbitrate their state court claims against Conseco Finance and staying the state court proceedings relative to Conseco Finance.

On appeal, Appellants contend that the district court erred in: 1) failing to join necessary and indispensable state court parties; 2) failing to abstain from exercising jurisdiction in light of the parallel state court proceedings; 3) staying the state court proceedings pursuant to the “in aid of jurisdiction” exception to the Anti-Injunction Act; 4) failing to dismiss the federal action due to collateral estoppel of the substantive issues in dispute; 5) failing to dismiss the federal action in light of Conseco’s waiver of any right to invoke federal jurisdiction; 6) denying their motion for discovery; and 7) denying their request

for a jury trial.

STANDARDS OF REVIEW

We review de novo, a district court’s assumption of subject matter jurisdiction. See Local 1351 Int’l Longshoremens Assoc. v. Sea-Land Serv. Inc., 214 F.3d 566, 569 (5th Cir. 2000). We review for an abuse of discretion, a district court’s determination whether to exercise its jurisdiction and de novo, its underlying legal conclusions. See Safety Nat’l Cas. Corp. v. Bristol-Myers Squibb Co., 214 F.3d 562, 564 (5th Cir. 2000). Insofar as the availability of the exceptions to the Anti-Injunction Act is an issue of law, we review de novo, a district court’s injunction of a state court action. See Next Level Communications L.P. v. DSC Communications Corp., 179 F.3d 244, 249 (5th Cir. 1999). We review for an abuse of discretion, a district court’s decision whether to issue an injunction that properly falls within the exceptions to the Anti-Injunction Act. See Rolex Watch USA, Inc. v. Meece, 158 F.3d 816, 823 (5th Cir. 1998). We also review de novo, a district court’s application of collateral estoppel and the decision to deny a jury trial on factual issues in the context of an arbitration agreement. See Stripling v. Jordan Prod. Co., L.L.C., 234 F.3d 863, 868 (5th Cir. 2000) (citation omitted) (“[T]he application of collateral estoppel is a question of law that we review de novo.”); Avedon Eng’g, Inc. v. Seatex, 126 F.3d 1279, 1283 (10th Cir. 1997) (citation omitted) (“We also review de novo a district court’s

decision to deny a jury trial on the factual question of whether the parties agreed to arbitrate.”). We review a district court’s discovery decisions for an abuse of discretion. See Moore v. Willis Indep. Sch. Dist., 233 F.3d 871, 876 (5th Cir. 2000).

DISCUSSION

Appellants raise a number of issues on appeal. We address each in turn below.

I. JURISDICTION TO HEAR APPEAL Before addressing the merits of the issues presented in this appeal, we must first determine whether we have jurisdiction over the district court’s orders compelling arbitration. In Green Tree Finance Corp.-Alabama v. Randolph, 531 U.S. 79 (2000), the Supreme Court addressed the appealability of orders compelling arbitration under the Federal Arbitration Act, 9 U.S.C. § 16(a)(3) (1999) (hereinafter “the FAA”).3 The Supreme Court held in Green Tree that, a district court’s order compelling arbitration is appealable as a final decision under § 16(a)(3) if the underlying action is dismissed. See Green Tree, 531 U.S. at 86-87. The FAA does not define a “final decision” with respect to an arbitration. Green Tree instructs, however, that a final decision “is a decision that ends the litigation on the merits and leaves nothing more for the

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