ELLIS v. TRUSTMARK BUILDERS INC.

Citation625 F.3d 222
Decision Date29 October 2010
Docket NumberNo. 09-60917.,09-60917.
PartiesRobert J. ELLIS, Plaintiff-Appellant, Liberty Mutual Insurance Company, Movant-Appellant, v. TRUSTMARK BUILDERS, INC.; Scotty Jones, Individually and as Employee/Agent of Landings Associates, Ltd., The Mitchell Company, and Trustmark Builders, Inc., Defendants-Appellees.
CourtUnited States Courts of Appeals. United States Court of Appeals (5th Circuit)

OPINION TEXT STARTS HERE

Timothy Charles Holleman (argued), David Jeffrey White, Boyce Holleman & Associates, Gulfport, MS, for Plaintiff-Appellant.

Nathan Lewis Burrow, John Stanford Gonzalez, Celestial Reep Oglesby, Daniel, Coker, Horton & Bell, P.A., Gulfport, MS, for Movant-Appellant.

Orlando Rodriguez Richmond, Sr. (argued), Chynee A. Bailey, Butler, Snow, O'Mara, Stevens & Cannada, P.L.C., Ridgeland, MS, for Defendants-Appellees.

Appeal from the United States District Court for the Southern District of Mississippi.

Before DAVIS, WIENER, and DENNIS, Circuit Judges.

WIENER, Circuit Judge:

Plaintiff-Appellant Robert J. Ellis was injured in Mississippi while working on a construction site for an Alabama employer who was a subcontractor for Defendant-Appellee Trustmark Builders, Inc. (Trustmark). Ellis recovered workers compensation benefits from the State of Alabama under his employer's policy, which included coverage of work sites in Mississippi. Ellis then filed this tort action against Defendants-Appellees for damages. The district court applied Mississippi choice-of-law principles and held that Mississippi's workers compensation scheme governed this suit, barring Ellis from bringing tort claims against Appellees. We reverse and remand for application of Alabama's workers compensation scheme.

I. FACTS & PROCEEDINGS
A. Facts

Ellis was injured in February 2003 while working on an apartment complex construction site in Biloxi, Mississippi. The negligence asserted occurred on that site where Ellis had been working for a month. In his complaint, Ellis identifies himself as “an adult resident citizen of Jackson County, State of Mississippi.” 1 With the exception of Ellis, however, all parties involved in this suit are Alabama residents, partnerships, or corporations. The apartment complex was owned by Landings Associates, Ltd. (“Landings”). A partner of Landings, the Mitchell Company, was the general contractor for the construction project, and the Mitchell Company subcontracted with Trustmark, whose employee, Scotty Jones, allegedly constructed the wooden platform that is claimed to have caused Ellis's injury. 2 Landings, the Mitchell Company, and Trustmark are Alabama partnerships or corporations, and all maintain their principal places of business in Alabama. Trustmark was not registered to do business in Mississippi at the time, its Mississippi Certificate of Authority having been revoked prior to the accident. Jones is an Alabama resident too, and he commuted from his Alabama home to Mississippi on days that he worked on the construction site.

Trustmark in turn sub-subcontracted in Alabama with Rusty Stevens, an Alabama subcontractor. Stevens hired Ellis, also in Alabama. 3 Ellis spent the first nine months of his employment for Stevens working with Jones in Alabama on Trustmark projects. He then spent only the one month prior to his injury working in Mississippi. Notably, Stevens maintained workers compensation insurance only in the State of Alabama. He secured that insurance through Movant-Appellant Liberty Mutual Insurance Company (Liberty Mutual)-also an Alabama corporation-to cover all his employees, including Ellis, while they worked out of state. 4

After Ellis's accident, Stevens filed a Notice of Injury with the Alabama Department of Industrial Relations, and Liberty Mutual filed a Combination Supplementary and Claim Summary form with the same Alabama agency. Ellis received workers compensation benefits pursuant to the State of Alabama's workers compensation law.

B. Proceedings

After Ellis began receiving the workers compensation benefits under Stevens's policy in Alabama, he filed this tort action in the Southern District of Mississippi, seeking damages for injuries resulting from Appellees' alleged negligence. The district court determined that Mississippi's workers compensation law should control the case, interpreting Mississippi Code § 71-3-109(3) as a statutory directive on choice of law. The court then held that Mississippi law barred Ellis's tort suit.

On appeal, we vacated and remanded, rejecting the district court's determination:

[Section] 71-3-109(3) is not a statutory directive that takes the place of Mississippi's ordinary choice-of-law rules, which remain antecedent to application of § 71-3-109(3). Therefore, before the district court may consider § 71-3-109(3), it must find that Mississippi choice-of-law rules direct it to apply Mississippi law. If consideration of those choice-of-law rules directs the district court to Alabama law, then § 71-3-109(3) is irrelevant. 5

On remand, the district court conducted a succinct Mississippi choice-of-law analysis and again concluded that Mississippi law should govern the case:

In the Court's opinion under the “most significant relationship test,” Mississippi law applies. Notably, the accident occurred in Mississippi. The negligent conduct which allegedly caused the injury occurred in Mississippi. Finally, the injured plaintiff appears to have been a Mississippi resident. 6

The court then applied Mississippi Code § 71-3-109(3), held that Mississippi's workers compensation statute barred Ellis from bringing this tort action against Appellees, and granted Appellees' motion for a summary judgment of dismissal. 7

Ellis then timely filed a notice of appeal.

II. ANALYSIS
A. Standard of Review

[1] [2] We review a district court's choice-of-law determination de novo. 8 Subject-matter jurisdiction in this case is based on diversity of citizenship. When sitting in diversity, we apply the choice-of-law rules of the forum state-here, Mississippi-to determine which state's substantive law should apply. 9

B. Choice of Law

A substantive conflict exists between the workers compensation schemes of Alabama and Mississippi. Mississippi's workers compensation law provides the exclusive remedy of a subcontractor's injured employee; suits against co-employees or the general contractor for damages are generally barred. 10 Alabama's workers compensation law permits a subcontractor's injured employee to sue co-employees or the general contractor whose negligence causes his injury. 11 We must determine which of these states' law governs this case.

[3] Mississippi's choice-of-law test consists of three steps: (1) determine whether the laws at issue are substantive or procedural; (2) if substantive, classify the laws as either tort, property, or contract; and (3) look to the relevant section of the Restatement (Second) of Conflict of Laws.” 12

The conflicting laws at issue here involve workers compensation and are not procedural-and therefore do not automatically dictate application of Mississippi law. 13 As Ellis brings tort claims, we apply Chapter 7 of the Restatement (Second) of Conflict of Laws. Section 145 of the Restatement directs that tort actions should be governed by the law of the state with “the most significant relationship to [(1)] the occurrence and [(2)] the parties and suggests types of contacts that should be considered for such a determination:

Contacts to be taken into account ... to determine the law applicable to an issue include:

(a) the place where the injury occurred,

(b) the place where the conduct causing the injury occurred,

(c) the domicil[e], residence, nationality, place of incorporation and place of business of the parties, and

(d) the place where the relationship, if any, between the parties is centered.

These contacts are to be evaluated according to their relative importance with respect to the particular issue. 14

The Restatement also instructs that the weighing of these tort-specific factors should be guided by the seven general choice-of-law considerations set out in § 6:

(a) the needs of the interstate and international systems,

(b) the relevant policies of the forum,

(c) the relevant policies of other interested states and the relative interests of those states in the determination of the particular issue,

(d) the protection of justified expectations,

(e) the basic policies underlying the particular field of law,

(f) certainty, predictability and uniformity of result, and

(g) ease in the determination and application of the law to be applied. 15

The Supreme Court of Mississippi has further explained that [t]he principles of Sections 6 and 145 of the Restatement (Second) defy mechanical application-they are less ‘rules of law’ than generally-stated guideposts.” 16

[4] Here, the first two § 145 factors favor Mississippi, as both the injury and the allegedly negligent conduct that caused the injury took place on the construction site in Mississippi. These factors, however, are not dispositive. The Restatement makes clear that for personal injury actions “the local law of the state where the injury occurred determines the rights and liabilities of the parties, unless ... some other state has a more significant relationship under the principles stated in § 6....” 17 Generally, the state where the injury occurred has a interest in awarding relief under its workers compensation law because the State might otherwise be required to care for the injured employee.” 18 Mississippi does not have that interest here, however, because Ellis has already received protection from the State of Alabama pursuant to its workers compensation law.

The second two § 145 factors favor Alabama. Even though Ellis is a Mississippi resident, his relationship with his employer, Stevens, was centered in Alabama, as were all other relevant business relationships. And, all other parties are Alabama corporations or residents. Most importantly, Stevens took out and...

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