WMX Technologies, Inc. v. Jackson

168 F.R.D. 64, 1996 U.S. Dist. LEXIS 9822, 1996 WL 391568
CourtDistrict Court, M.D. Alabama
DecidedJuly 3, 1996
DocketCivil Action No. 95-A-92-N
StatusPublished
Cited by2 cases

This text of 168 F.R.D. 64 (WMX Technologies, Inc. v. Jackson) is published on Counsel Stack Legal Research, covering District Court, M.D. Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
WMX Technologies, Inc. v. Jackson, 168 F.R.D. 64, 1996 U.S. Dist. LEXIS 9822, 1996 WL 391568 (M.D. Ala. 1996).

Opinion

MEMORANDUM OPINION AND ORDER

ALBRITTON, District Judge.

I. INTRODUCTION

This cause is before the court on a Motion to Dismiss, filed by Durward W. Jackson (“Jackson”). For the reasons stated below, the court finds that Jackson’s Motion to Dismiss is due to be denied.

II. STATEMENT OF THE CASE

WMX is a Delaware corporation with its principal place of business in Oak Brook, Illinois. Jackson is an individual who resides in Montgomery County, Alabama. The amount in controversy exceeds $50,000. This court has subject matter jurisdiction over this cause on the basis of diversity of citizenship. 28 U.S.C. § 1332.

On January 20, 1995, WMX filed its Complaint against Jackson seeking declaratory and injunctive relief. The complaint alleges the following facts:

On or about October 1, 1993, WMX, Jackson, and other corporations signed an acquisition agreement, dated September 28, 1993. The acquisition agreement was executed and signed by Durward W. Jackson and the following entities: WMX, Waste Away Acquisition Sub, Inc., Salem Acquisition Sub, Inc., Brundidge Acquisition Sub, Inc., Waste Away, Inc., Waste Away Group, Inc., Waste Away Group Leeeo, Inc., Durjae One, Inc., Durjac Two, Inc., Durjac Four, Inc., Durjac Five, Inc., Durjac Six, Inc., Durjac Eight, Inc., Durjac Nine, Inc., Durjac Twelve, Inc., Durjac Sixteen, Inc., Durjac Eighteen, Inc., Brundidge Waste Disposal Center, Inc. and Waste Services Inc. By the terms of the acquisition agreement, WMX acquired Jackson’s stock and interest in various business operations, equipment, contracts, and real estate relating to the solid waste collection and disposal industry in exchange for WMX stock.

In the acquisition agreement WMX is referred to as ‘Waste Management.” Article IV of the acquisition agreement states that “[t]he Shareholder (Jackson) covenants and agrees with Waste Management (WMX)” to indemnify and hold Waste Management (WMX), each of the Companies and their respective subsidiaries, divisions, affiliates, officers, directors and employees (collectively, the Waste Management Indemnitees) harmless from and against” certain indemnL fied losses.1 See Acquisition Agreement § 4.7.1 & 4.7.2. The indemnified losses include losses and liabilities arising from prior business operations or from the breach of obligations and representations contained in the Acquisition Agreement. See Acquisition Agreement § 4.7.2.

In September, 1994, WMX made a demand upon Jackson for various indemnified losses totaling $3,595,107.27. (See Everett Aff.).2 Jackson subsequently rejected all of WMX’s claims for indemnification. In a letter dated October 7, 1994, Jackson accused WMX of engaging in bad faith dealings and fraudulent acts, and demanded the right to defend the underlying claims and actions for which [66]*66WMX seeks indemnification. These events precipitated the filing of the instant action.

In Count One of the Complaint, WMX seeks equitable and declaratory relief and requests the court to do the following: 1) interpret and declare the parties’ rights under the acquisition agreement; 2) enforce the terms and provisions of the acquisition agreement and require Jackson to submit to arbitration any disputes related to the acquisition or the acquisition agreement;3 3) enjoin Jackson, his agents, attorneys, representatives, assigns and all persons claiming through and under him, from instituting or proceeding in any action in federal or state courts relating to the acquisition and the acquisition agreement, including claims for indemnified losses, claims alleging bad faith dealings or fraudulent acts, and Jackson’s demand to defend the underlying claims and actions for which WMX seeks indemnification; 4) retain jurisdiction over the parties to resolve any other controversies which may arise involving the acquisition, the acquisition agreement or arbitration of disputes relating thereto; and 5) award WMX reasonable attorney’s fees, costs and other equitable relief.

In Count Two, WMX requests the court to enter a declaratory judgment holding that Jackson is not entitled to defend any of the underlying claims and actions for which WMX seeks indemnification. WMX also seeks a declaratory judgment finding that Jackson waived his right to defend underlying claims and actions for which WMX seeks indemnification because Jackson failed to give written notice to WMX within 10 days of his receipt of notification of such losses as required by § 5.2 to the acquisition agreement. In the alternative, WMX seeks declaratory relief that § 5.2 of the agreement gives Jackson the right to defend only certain types of underlying claims and actions for which WMX seeks indemnification. WMX further requests that the court retain jurisdiction over this action if the dispute over Jackson’s ability to defend such claims and actions is not subject to arbitration.

In Count Three, WMX requests the court to enter a declaratory judgment holding that WMX has not engaged in acts of bad faith or fraud, or any other conduct for which it might be liable to Jackson.

In Count Four, WMX seeks declaratory judgment holding that WMX did not engage in any conduct which would entitled Jackson to indemnification. WMX also requests the court to retain jurisdiction over the dispute, to the extent that this issue is not subject to arbitration.

In Count Five, WMX requests the court for judgment against Jackson in the amount of $3,595,107.27, plus interest, costs, and attorney’s fees for the indemnified losses.

III. DISCUSSION

Jackson states three grounds for dismissal of the complaint. First, Jackson asserts that the complaint should be dismissed pursuant to Fed.R.Civ.P. 12(b)(7) for failure to join indispensable parties under Fed.R.Civ.P. 19. Second, Jackson contends that this action should be dismissed because WMX’s claims are not ripe and amount to a request for an advisory opinion. As a third basis for dismissal, Jackson asserts that WMX lacks standing to maintain or is otherwise precluded from maintaining the present action because WMX is a foreign corporation transacting business without a certificate of authority as required by Code of Ala. § 10-2B-15.02 (1975).

A. FAILURE TO JOIN AN INDISPENSABLE PARTY

The parties which Jackson claims are indispensable are subsidiary corporations of WMX. They are Alabama corporations which were acquired by WMX pursuant to the Acquisition Agreement and were parties to the Agreement. Jackson contends that these corporations have a contractual right to indemnity under the Agreement and that because of that he could be subject to separate suits by them. A federal district court [67]*67in its discretion may dismiss an action for failure to join an indispensable party. See Fed.R.Civ.P. 12(b)(7) and 19; see also Provident Tradesmens Bank & Trust Co. v. Patterson,

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

Related

CS ASSETS, LLC v. H & H Real Estate Development, Inc.
353 F. Supp. 2d 1187 (N.D. Alabama, 2005)

Cite This Page — Counsel Stack

Bluebook (online)
168 F.R.D. 64, 1996 U.S. Dist. LEXIS 9822, 1996 WL 391568, Counsel Stack Legal Research, https://law.counselstack.com/opinion/wmx-technologies-inc-v-jackson-almd-1996.