Hines v. Plane Paint, Inc.

430 F. Supp. 2d 598
CourtDistrict Court, S.D. Mississippi
DecidedMarch 27, 2006
DocketBo. CIV.A.5:04CV211DCB-J
StatusPublished

This text of 430 F. Supp. 2d 598 (Hines v. Plane Paint, Inc.) is published on Counsel Stack Legal Research, covering District Court, S.D. Mississippi primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hines v. Plane Paint, Inc., 430 F. Supp. 2d 598 (S.D. Miss. 2006).

Opinion

MEMORANDUM OPINION AND ORDER

BRAMLETTE, District Judge.

This cause is before the Court on the plaintiffs’ Motion for Award of Fees and Expenses [docket entry no. 23]. Having carefully considered the motions, responses and briefs, and the applicable law, the Court finds as follows:

FACTUAL AND PROCEDURAL HISTORY

This negligence action was removed from the Circuit Court of Yazoo County, Mississippi, on August 16, 2004, after notice was given by Hermitage Insurance Company (“Hermitage”) claiming that this Court had original diversity jurisdiction pursuant to 28 U.S.C. § 1332. While complete diversity did exist between Hermitage and the plaintiffs, there was a lack of diversity between the plaintiffs and Hermitage’s co-defendants. Hermitage argued that the claims against it had been “mis-joined” in the state action and that the action could be properly removed under the theory of “fraudulent misjoinder of claims.” See Def. Response to Motion for Remand, at 6.

On October 25, 2004, the plaintiffs’ motion to remand the case to the Yazoo County court was granted. This Court determined that Hermitage’s reliance on Tapscott v. MS Dealer Service Corp., 77 F.3d 1353 (11th Cir.1996), as justification for removal on the basis of fraudulent misjoinder was misplaced. See Order of Remand, at 6. The Court first noted that it was not entirely clear that the Fifth Circuit recognized misjoinder of parties and claims as a basis for removal. Id. Despite this, the Court determined that Tapscott was easily distinguishable on the facts. 1 Additionally, Hermitage’s claims of fraudulent misjoinder were further discredited by Mississippi law, which clearly condoned the joining of declaratory actions against an alleged tortfeasor’s insurance company in the same suit as the underlying tort claim. Id. at 7-8.

DISCUSSION

A. Standard for Awarding Attorney’s Fees Upon Remand

“An order remanding the case may require payment of just costs and any actual expenses, including attorney fees, incurred as a result of the removal.” 28 U.S.C. § 1447(c). A plaintiff is not automatically entitled to an award of attorney’s *601 fees upon a determination that removal was improper. Valdes v. Wal-Mart Stores, Inc., 199 F.3d 290, 292 (5th Cir.2000). Instead, the decision whether or not to grant the award should be based upon the “propriety of the defendant’s removal.” Miranti v. Lee, 3 F.3d 925, 928 (5th Cir.1993). In determining the propriety of the removal, the Court should consider “the merits of the defendant’s case at the time of removal.” Valdes, 199 F.3d at 292. This requires a review of “the removing party’s actions based on an objective view of the legal and factual elements in [this] particular case.” Id. at 293. Assessment of costs and fees against the removing defendants is within the discretion of the Court and does not require a finding of bad faith or frivolity. Miranti, 3 F.3d at 929 (citing News-Texan, Inc. v. City of Garland, 814 F.2d 216, 220 (5th Cir.1987)); see also Valdes, 199 F.3d at 292 (“[T]he district court may award fees even if removal is made in subjective good faith.”).

The plaintiffs argue, among other things, that Hermitage lacked an objectively reasonable basis to have made any claim of fraudulent misjoinder. See PI. Motion for Award of Fees, at 2. They point out that Mississippi law clearly allows for joinder of claims against an alleged tort-feasor’s insurance company. In response, Hermitage claims that other courts in this District, in our sister district to the north, and even the Fifth Circuit Court of Appeals have all issued opinions sanctioning the “fraudulent misjoinder” concept. Hermitage then cites numerous cases to this effect. See Def. Brief in Support of Response to Motion for Award of Fees, at 3.

Hermitage’s emphasis on the general propriety of fraudulent misjoinder as a basis for removal, however, is somewhat misplaced. In its Order of Remand, this Court’s opinion was not based on a decision that fraudulent misjoinder could not be used as a basis for removal in this Circuit. In fact, the Court specifically stated that it was ruling on the motion for remand “[w]ithout commenting on the logic of the ‘procedural misjoinder’ rule adopted in Tapscott.” See Order of Remand, at 6. The Court decided, rather, that even if the Fifth Circuit does recognize the rule in Tapscott, Hermitage had ultimately failed to demonstrate that it had, in fact, been misjoined in the action. Thus, even if a general reliance on the doctrine of fraudulent misjoinder would not have been objectively unreasonable, Hermitage could still be held liable for the plaintiffs’ fees if it had no reasonable basis to believe that it had actually been misjoined.

Hermitage does go on to address the propriety of its belief that it had been misjoined in the state action. The defendant directs the Court’s attention to the arguments it propounded in its brief supporting Hermitage’s opposition to the motion to remand. In that brief, Hermitage claimed that while Miss. R. Civ. P. 57 did allow for declaratory actions to filed directly against an alleged tortfeasor’s insurance company, the rule did not necessarily authorize that such a declaratory action could be joined with the underlying tort suit. Under the clear state of the law at the time of removal, however, Hermitage’s assertions were manifestly incorrect.

The comment to Rule 57 of the Miss. R. Civ. P. states that, “Allowing the injured party to seek a declaration that the injured party’s claim is covered by the defendant’s policy may reduce litigation costs.... In addition, if the injured party brings the claim for declaratory judgment together with the claim against the insured, the rule may allow all of the issues growing out an incident against the insured to be resolved in a single judgment.” Clearly, then, the Mississippi legislature contem *602 plated that joinder of a declaratory action claim for a coverage determination against an insurance company with a claim for the alleged torts committed by the insured was allowed by Rule 57. The Mississippi Supreme Court has also indicated that joining a declaratory action against an insurance company with a claim against its insured tortfeasor is generally allowed. See Poindexter v. Southern United Fire Ins. Co., 838

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Miranti v. Lee
3 F.3d 925 (Fifth Circuit, 1993)
Avitts v. Amoco Production Co.
111 F.3d 30 (Fifth Circuit, 1997)
Valdes v. Wal-Mart Stores, Inc.
199 F.3d 290 (Fifth Circuit, 2000)
Arnold v. Garlock, Inc.
278 F.3d 426 (Fifth Circuit, 2001)
Coward v. AC and S Inc
91 F. App'x 919 (Fifth Circuit, 2004)
McCorvey v. Hill
385 F.3d 846 (Fifth Circuit, 2004)
Tapscott v. MS Dealer Service Corp.
77 F.3d 1353 (Eleventh Circuit, 1996)
Liljeberg v. Health Services Acquisition Corp.
486 U.S. 847 (Supreme Court, 1988)
Cooter & Gell v. Hartmarx Corp.
496 U.S. 384 (Supreme Court, 1990)
Poindexter v. Southern United Fire Ins. Co.
838 So. 2d 964 (Mississippi Supreme Court, 2003)
Mercer v. Moody
918 So. 2d 664 (Mississippi Supreme Court, 2005)
Butler v. Rapides Foundation
365 F. Supp. 2d 787 (W.D. Louisiana, 2005)
Rockingham v. Men's Health Center
204 F. Supp. 2d 967 (S.D. Mississippi, 2002)
Smith v. Nationwide Mutual Insurance
286 F. Supp. 2d 777 (S.D. Mississippi, 2003)

Cite This Page — Counsel Stack

Bluebook (online)
430 F. Supp. 2d 598, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hines-v-plane-paint-inc-mssd-2006.