Ill. Cent. R.R. Co. v. Guy

Decision Date13 June 2012
Docket NumberNos. 10–61006,11–60122.,s. 10–61006
Citation682 F.3d 381
PartiesILLINOIS CENTRAL RAILROAD COMPANY, Plaintiff–Appellee, v. William GUY; Thomas W. Brock, Defendants–Appellants.
CourtU.S. Court of Appeals — Fifth Circuit

OPINION TEXT STARTS HERE

Daniel J. Mulholland (argued), Tanya Dearman Ellis, Forman, Perry, Watkins, Krutz & Tardy, L.L.P., Jackson, MS, for PlaintiffAppellee.

Russell Stanley Post (argued), Chad Flores, Beck, Redden & Secrest, L.L.P., Houston, TX, John G. Corlew, Kathy K. Smith, Corlew, Munford & Smith, P.L.L.C., Jackson, MS, for DefendantsAppellants.

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

Before REAVLEY, ELROD and HAYNES, Circuit Judges.

REAVLEY, Circuit Judge:

A jury returned a verdict in favor of PlaintiffAppellee Illinois Central Railroad on its claims of fraud and breach of the duty of good faith and fair dealing against AppellantDefendants William Guy and Thomas W. Brock. Guy and Brock's misrepresentations induced Illinois Central to settle the asbestos exposure claims of two former Illinois Central employees whom Guy and Brock represented in a state-court lawsuit. On appeal, Guy and Brock contend that the district court lacked subject matter jurisdiction over the instant case under the Rooker-Feldman doctrine, and alternatively that the case called for Burford abstention under Burford v. Sun Oil Co.1 They also contend that the trial evidence established their statute-of-limitations and waiver defenses as a matter of law.

Guy and Brock misconceive the legal authorities relevant to their jurisdiction, abstention, and waiver arguments. Regarding the statute of limitations issue, we conclude that a reasonable jury could have found for Illinois Central. We therefore AFFIRM the district court's judgment.

I. Background

Our explanation of the case's background is based on the undisputed facts and the evidence presented at trial. Our treatment of disputed factual matters is informed by the standard of review applicable to a post-trial challenge to the sufficiency of the evidence, which requires us to view the trial evidence in the light most favorable to the jury's verdict. See Staub v. Proctor Hosp.2 Guy and Brock represented Warren R. Turner, Jr., Willie R. Harried, and roughly 170 other plaintiffs alleging asbestos exposure during their employment with Illinois Central in a suit filed on August 1, 2001, in the Circuit Court of Jefferson County, Mississippi, styled Elbert Eakins, et al. v. Illinois Central Railroad Co., No. 2001–65 (Jefferson Cnty. Cir. Ct. Miss.). The Eakins case proceeded in parallel with Robert Allen v. Illinois Central Railroad Company, No. 2000–100 (Jefferson Cnty. Cir. Ct. Miss.), another multi-plaintiff case in which Guy and Brock represented numerous individuals suing Illinois Central for asbestos exposure. The cases proceeded before the same judge, and in most respects were treated as though they had been consolidated.

Turner was one of a small number of the Eakins plaintiffs selected for early discovery and trial. The Eakins trial court allowed discovery regarding the plaintiffs in this “trial group,” and their claims were scheduled for trial on October 15, 2002. That trial did not happen because Guy and Brock and Illinois Central reached an agreement establishing a process for expedited evaluation and settlement of all of the Eakins plaintiffs' claims. The August 6, 2002 agreement preserved Illinois Central's right to refuse settlement if the plaintiff had not actually worked for Illinois Central, had not been diagnosed with an asbestos-related illness, or had not sued within the three-year statute of limitations provided by the Federal Employer Liability Act (“FELA”).3 The agreement provided for limited discovery on those matters regarding the 160–odd Eakins plaintiffs not in the trial group. For them, the agreement called for Guy and Brock to provide each plaintiff's sworn responses to a “pulmonary questionnaire.” The questionnaire asked for the plaintiff's employment history, any other known history of asbestos exposure or asbestos-related medical history, and any involvement in prior asbestos litigation. After receiving a plaintiff's completed questionnaire, Illinois Central was required to review the claim and either assert one of the preserved grounds for refusing settlement or make a firm settlement offer. The agreement required that in every three month period Illinois Central would make settlement decisions regarding $6 million worth of claims for which Guy and Brock had submitted completed questionnaires. The agreement required both Guy and Brock and the Eakins plaintiffs themselves to act in good faith in carrying out the settlement process. The settlement procedures agreement used in Eakins was similar to one through which Illinois Central had settled with many of Guy and Brock's clients in the Allen litigation.

Over five years before Eakins was filed, Harried and Turner were plaintiffs in a case brought in Jefferson County against an asbestos manufacturer, David Cosey, et al. v. E.D. Bullard Co. et al., No. 95–0069 (Jefferson Cnty. Cir. Ct. Miss.). Turner's and Harried's counsel in that case was Attorney Robert Pritchard. Turner and Harried were not familiar with the details of Cosey or even the case's formal name. But each recollected that he had been diagnosed with an asbestos-related illness after consulting with Pritchard some time around 1995, and that Pritchard had filed an asbestos claim on his behalf. Both Turner and Harried shared that information with Guy and Brock before the Eakins suit was filed. The diagnoses used in Cosey establish that by 2001 Turner's and Harried's claims against Illinois Central were time barred under FELA's three-year statute of limitations,4 and Illinois Central would not have settled their claims had it been aware that they were plaintiffs in Cosey. But Guy and Brock withheld that fact from Illinois Central during the settlement process. They omitted the Cosey information from Turner's interrogatory responses concerning his medical and litigation history, which Guy and Brock provided to Illinois Central on January 25, 2002. They also omitted Cosey from Harried's sworn responses to the pulmonary questionnaire, submitted on May 19, 2003. As a result, Illinois Central settled Turner's and Harried's claims. Turner was paid $120,000 on December 23, 2002. Harried was paid $90,000 on November 26, 2003. The Eakins trial court dismissed Turner's and Harried's claims with prejudice.

Another Eakins plaintiff who had been in Cosey was Fred Tyler. Tyler was initially in the Eakins trial group, and Guy and Brock provided interrogatory responses on his behalf on January 25, 2002. As with Turner, they omitted Tyler's participation in Cosey. Tyler was dropped from the trial group before the August 6, 2002 settlement procedures agreement, so his claim was subject to the pulmonary questionnaire procedure for non-trial group plaintiffs. Guy and Brock submitted Tyler's sworn responses to the pulmonary questionnaire on July 28, 2003, again omitting Cosey.

At some point in late 2003 or January 2004, Guy and Brock became unsatisfied with the pace at which Illinois Central was processing unsettled claims. They moved the Eakins trial court to enforce Illinois Central's obligation to process $6 million in claims per quarter. But before the Eakins trial court heard that motion, Illinois Central discovered that Tyler had been a plaintiff in Cosey. Illinois Central's lead counsel in Eakins was Attorney Thomas Peters. Illinois Central had not offered Tyler a settlement, but the omission of Cosey from Tyler's interrogatory responses and pulmonary questionnaire caused Peters to lose confidence that Guy and Brock were taking adequate steps to ensure that the information they collected from their clients was accurate. On January 21, 2004, Peters sent Guy and Brock a letter setting forth the omissions from Tyler's interrogatories and pulmonary questionnaire, and asking Guy and Brock to explain. Peters's letter also stated that the omissions had prompted Illinois Central to undertake further investigation of the bulk of the remaining unsettled Eakins claims. Peters did not accuse Guy and Brock of fraud. He believed Tyler was responsible for the misleading omissions, stating in his letter, “The explanation for submissions made by Mr. Tyler point convincingly towards fraud, but we await any explanations Mr. Tyler may have regarding these disconcerting facts.”

On February 13, 2004 Illinois Central learned of Turner's and Harried's participation in the Cosey case from a report by an outside investigator. But Illinois Central did not raise the issue with Guy and Brock at that or any other time during the pendency of the Eakins litigation. Subsequent proceedings in Eakins remained focused on the Tyler omissions, and subsequently on discrepancies in affidavits that Guy and Brock later provided to Illinois Central concerning the litigation history of other unsettled Eakins plaintiffs. Illinois Central refused to consider many of the unsettled claims until it had a satisfactory explanation of the Tyler omissions, and it sought dismissal of some of the other unsettled plaintiffs' claims. That dismissal motion and Guy and Brock's motion to compel Illinois Central to more promptly consider unsettled claims were set for a hearing on March 29, 2004. But on the day of the hearing they reached an agreement, memorialized in a handwritten document, that Illinois Central would continue processing unsettled claims if Guy and Brock would provide (1) a letter from Tyler explaining the omissions in his responses; and (2) a letter from Guy and Brock “regarding the procedures they have used to ensure accurate information on pulmonary questionnaires and expert medical info [sic] and what further procedures are anticipated.”

Guy and Brock never provided the promised explanation of their procedures, though Peters asked...

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