Gulf Guar. Life Ins. v. Connecticut Gen. Life Ins.
| Decision Date | 30 August 2002 |
| Docket Number | No. 01-60582.,01-60582. |
| Citation | 304 F.3d 476 |
| Parties | GULF GUARANTY LIFE INSURANCE COMPANY, Plaintiff-Appellant, v. CONNECTICUT GENERAL LIFE INSURANCE COMPANY; Cigna Reinsurance Company, Defendants-Appellees. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Robert McKinley Frey (argued), W. Scott Welch, III, Fred Exzell Bourn, III, Butler, Snow, O'Mara, Stevens & Cannada, Jackson, MS, for Plaintiff-Appellant.
Harry P. Cohen (argued), Elizabeth A. Butler, Cadwalader, Wickersham & Taft, New York City, William F. Goodman, Jr., Susan Latham Steffey, Watkins & Eager, Jackson, MS, for Defendants-Appellees.
Appeal from the United States District Court for the Southern District of Mississippi.
Before KING, Chief Judge, PARKER, Circuit Judge, and ELLISON, District Judge.*
Plaintiff-Appellant Gulf Guaranty Life Insurance Company filed an initial claim in the district court in 1996 alleging that Defendant-Appellee Connecticut General Life Insurance Company breached a reinsurance contract between them. Gulf Guaranty subsequently filed claims in the district court in 2000 alleging that Connecticut General breached an agreement to arbitrate the reinsurance dispute, as well as claims for conspiracy and malice allegedly committed by Connecticut General with respect to Connecticut General's conduct in the arbitration process. The district court consolidated the 1996 and 2000 actions and compelled arbitration of the consolidated action. The district court further denied a motion by Gulf Guaranty to re-open discovery and granted a motion by Connecticut General to remove a chosen arbitrator, Gary Fagg, from service. For the following reasons, we AFFIRM the district court's order compelling arbitration of all disputes between Gulf Guaranty and Connecticut General in the consolidated action; we AFFIRM the district court's decision dismissing Gulf Guaranty's claims for breach of the arbitration agreement and for conspiracy and malice; we AFFIRM the district court's decision denying Gulf Guaranty's motion to re-open discovery; but we REVERSE the district court's decision granting the motion to strike Fagg from service as an arbitrator.
In 1981, Plaintiff-Appellant Gulf Guaranty Life Insurance Company ("Gulf Guaranty") entered into a contract with Defendant-Appellee Connecticut General Life Insurance Company ("Connecticut General") by which Connecticut General agreed to reinsure Gulf Guaranty on certain credit life insurance certificates issued by Gulf Guaranty. Their reinsurance contract contained an arbitration provision governing disputes under the contract.1 In 1991, a third-party holder of one of the insurance certificates sued Gulf Guaranty for payment. Following judgment in favor of that certificate holder, Gulf Guaranty sought reimbursement from Connecticut General pursuant to their reinsurance contract. Connecticut General offered Gulf Guaranty payment in an amount that Gulf Guaranty found unsatisfactory. On or about September 17, 1996, Gulf Guaranty sued Connecticut General and Defendant-Appellee Cigna Reinsurance Company ("Cigna")2 (collectively, "the Defendants") in Mississippi state court for breach of contract and "wrongfully placing conditions on payment." This was the 1996 first-filed suit.
The 1996 first-filed suit was removed to federal court in October of 1996. Connecticut General and Cigna sought to compel arbitration pursuant to the Connecticut General-Gulf Guaranty reinsurance contract. In January of 1997, a magistrate judge stayed all proceedings in the 1996 first-filed suit against Connecticut General and compelled arbitration of the reinsurance dispute. In April of 1997, the district court likewise stayed the action against non-signatory Cigna pending arbitration.
In September of 1999, Gulf Guaranty appointed Gary Fagg as its arbitrator of choice. In January of 2000, the Defendants appointed Oscar R. Scofield as their arbitrator of choice. It is undisputed that Scofield and Fagg discussed selection of Peter Jaynes to serve as the third arbitrator. Whether the two arbitrators agreed upon and appointed Jaynes as the third arbitrator, or whether his selection was merely discussed between them, is a matter of dispute.3 Based on this dispute over selection of arbitrators, on August 23, 2000, Gulf Guaranty filed a second lawsuit in Mississippi state court that alleged breach of the arbitration agreement by the Defendants, alleged waiver of the Defendants' right to arbitrate, and alleged conspiracy and malice and reckless disregard for Gulf Guaranty's rights. This was the 2000 second-filed suit.
The 2000 second-filed suit was likewise removed to federal court. On December 14, 2000, the district court re-opened the 1996 first-filed suit and consolidated it with the 2000 second-filed suit. On June 22, 2001, upon motion by the Defendants to compel arbitration and to dismiss the 2000 second-filed suit, the district court issued an order finding that the Defendants had not waived their right to arbitrate. In that June 22 order, the court also granted the Defendants' motion to compel arbitration and granted the Defendants motion to "Dismiss the lawsuit filed by Plaintiff Gulf Guaranty on August 23, 2000," making no mention of the status of the 1996 first-filed suit component of the underlying consolidated action as stayed or dismissed. In the same June 22 order, the district court further denied Gulf Guaranty's motion to re-open discovery and granted the Defendants' motion to strike Fagg from service as an arbitrator.
On July 26, 2001, the district court stayed enforcement of its June 22 order compelling arbitration pending appeal of that order to this court. On September 18, 2001, the district court denied a motion by Gulf Guaranty for relief from the district court's judgment pursuant to FED. R. CIV. P. 60(b). Gulf Guaranty now timely appeals the district court's order of June 22, 2001 that compelled arbitration and dismissed Gulf Guaranty's claims for waiver, breach and conspiracy; denied Gulf Guaranty's motion to re-open discovery; and struck arbitrator Fagg.
The parties agree that this court should have jurisdiction over the district court's June 22 order compelling arbitration of the consolidated action, but such agreement is insufficient to confer jurisdiction on this court. Due to procedural ambiguity within the June 22 order regarding the precise status of the 1996 first-filed suit of the consolidated action as stayed or dismissed, there is some question as to whether this court has jurisdiction subsequent to the Supreme Court's decision in Green Tree Fin. Corp. — Ala. v. Randolph, 531 U.S. 79, 121 S.Ct. 513, 148 L.Ed.2d 373 (2000). In Green Tree, the Supreme Court addressed the appealability of orders compelling arbitration under the Federal Arbitration Act, 9 U.S.C. § 16(a)(3) (1999) ("the FAA").4 The Supreme Court held in Green Tree that, when a district court issues an order compelling arbitration, that order is appealable as a final decision under section 16(a)(3) only if the district court dismisses the underlying action. See 531 U.S. at 86-87, 121 S.Ct. 513. The court further held in Green Tree that when a district court compels arbitration but "enter[s] a stay instead of a dismissal [of the underlying action,] ... that order would not be appealable" under the FAA. Id. at 87 n. 2, 121 S.Ct. 513 (citing 9 U.S.C. § 16(b)(1) (1999)).5
It is undisputed that the district court's June 22 order explicitly dismissed the underlying 2000 second-filed suit that was filed on August 23, 2000. However, because the district court neglected to explicitly address the status of the 1996 first-filed suit, which 1996 suit that court acknowledged it had re-opened for the purpose of consolidating the 1996 suit with the 2000 second-filed suit, this court must determine, pursuant to the dictates of Green Tree, whether we can hear this appeal of the June 22 order compelling arbitration. Because we conclude that the record shows clear intent by the district court that its June 22 order compelling arbitration be immediately appealable to this court pursuant to the Supreme Court's mandate in Green Tree, we further conclude that we have jurisdiction to hear appeal of that order under § 16(a)(3) of the FAA, and in accordance with Green Tree.
The Supreme Court's decision in Green Tree did not confront the circumstance of consolidated actions. Subsequent to that decision, no other court of appeals has yet confronted the precise circumstance of this case of determining appellate jurisdiction over an order compelling arbitration of a consolidated action that explicitly dismissed only a portion of the claims in that action and neglected to declare the status of the remaining claims as stayed or dismissed. The Supreme Court noted in Green Tree that Congress did not define the term "final decision" as it is used within the FAA. See 531 U.S. at 86, 121 S.Ct. 513. The court thus held that the term final decision should be "accord[ed] its well established meaning [,]" as "a decision that ends the litigation on the merits and leaves nothing more for the court to do but execute the judgment." Id. (citations and quotation omitted).
We recently construed a district court's order compelling arbitration that did not precisely conform with the dismissal language of Green Tree as providing the functional equivalent of the required dismissal of the underlying case, and thus to allow for our exercise of jurisdiction over that appeal in accordance with Green Tree. See Am. Heritage Life Ins. Co. v. Orr, 294 F.3d 702, 706-08 (5th Cir.2002) (citing Green Tree, 531 U.S. at 89, 121 S.Ct. 513). In the order compelling arbitration at issue in that case, the district court used the term "clos[ed]" rather than "d...
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