Am. Family Life Assurance Co. of Columbus v. Biles

• Decision Date: 30 April 2013
• Docket Number: No. 12–60235.,12–60235.
• Citation: 714 F.3d 887
• Parties: AMERICAN FAMILY LIFE ASSURANCE COMPANY OF COLUMBUS, Plaintiff–Appellee v. Glenda C. BILES, Individually, Natural Mother of David Biles, Deceased, and Administratix of Estate of David Biles, Deceased; Beverly Garrett, Individually and Natural Sister of David Biles, Deceased; Patricia Finnan, Individually and Natural Sister of David Biles, Deceased; Michael Lockwood, Individually and Natural Brother of David Biles, Deceased, Defendants–Appellants.
• Court: U.S. Court of Appeals — Fifth Circuit

714 F.3d 887

AMERICAN FAMILY LIFE ASSURANCE COMPANY OF COLUMBUS, Plaintiff–Appellee

v.Glenda C. BILES, Individually, Natural Mother of David Biles, Deceased, and Administratix of Estate of David Biles, Deceased; Beverly Garrett, Individually and Natural Sister of David Biles, Deceased; Patricia Finnan, Individually and Natural Sister of David Biles, Deceased; Michael Lockwood, Individually and Natural Brother of David Biles, Deceased, Defendants–Appellants.

No. 12–60235.

United States Court of Appeals, Fifth Circuit.

April 30, 2013.

Grover Clark Monroe, II, Eric R. Price, DunbarMonroe, P.A., Ridgeland, MS, for Plaintiff–Appellee.

Wayne E. Ferrell, Jr., Esq., Law Offices of Wayne E. Ferrell, Jr., Paul Anderson Koerber, Jackson, MS, for Defendant–Appellant.

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

Before KING, DAVIS, and ELROD, Circuit Judges.

PER CURIAM:

This case arises out of the payment of benefits pursuant to an American Family Life Assurance Company of Columbus (“Aflac”) accident insurance policy. The district court granted Aflac's summary judgment motion and awarded Aflac the relief it sought below: an order compelling Defendants–Appellants to submit their state-law claims against Aflac and its agents to arbitration. We AFFIRM.

I.

In late 2006, David Biles (“the decedent”) allegedly completed an application for an Aflac accident insurance policy. The application included a form that required applicants to acknowledge receipt of a statement outlining the details of the accident policy's binding arbitration clause (the “arbitration acknowledgment form”). The application and the arbitration acknowledgment form both contain a signature Aflac purports to be that of the decedent. Aflac issued a policy to the decedent effective January 1, 2007 (the “Policy”). Tragically, Aflac's obligation to pay death benefits pursuant to the terms of the Policy arose less than one year later when the decedent suddenly passed away. Aflac paid death benefits to the two named beneficiaries: Glenda Biles (“Ms. Biles”), the decedent's mother, and Ken Ashley (“Ashley”), the decedent's roommate and life partner.

In September 2010, Ms. Biles, and the decedent's siblings Beverly Garrett, Patricia Finnan, and Michael Lockwood (collectively “Appellants”), filed suit in the Circuit Court of the First Judicial District of Hinds County, Mississippi, alleging that Aflac should not have paid any portion of the death benefit from the Policy to Ashley. Appellants named Aflac, Ashley, Brendan Hammond (“Hammond”), the Aflac sales associate who sold the policy to the decedent, and the bar and its owners where the decedent was drinking on the night of his death, as defendants. The Appellants' relevant state claims are premised on allegations that Ashley conspired with Hammond to fraudulently obtain the Policy with the intent to end the decedent's life and collect the Policy's death benefits. Appellants further allege that Ashley's actions on the night of the decedent's death caused or contributed to the death of the decedent and, therefore, Aflac should have known that Ashley was prohibited from collecting death benefits on the Policy.

In early November 2010, Aflac sent a letter to Appellants demanding that they submit their claims against Aflac and its agents to arbitration pursuant to the terms of the Policy. On November 17, 2010, after the Appellants refused to comply with Aflac's demand, Aflac filed a Petition to Compel Arbitration in the district court, pursuant to Section 4 of the Federal Arbitration Act, 9 U.S.C. § 4, seeking an order that Appellants' claims against Aflac and its agents must be arbitrated.¹

Aflac moved for summary judgment. Appellants responded in opposition to Aflac'ssummary judgment motion, contending that Aflac's federal action should be dismissed based on Colorado River Water Conservation District v. United States, 424 U.S. 800, 96 S.Ct. 1236, 47 L.Ed.2d 483 (1976), and that the arbitration acknowledgment form was invalid because the signature, purported to be that of the decedent, was a forgery.² The only evidence offered in support of Appellants' response was the affidavit of a handwriting expert—Robert Foley (“Foley”)—who explained that it was probable that the signature was a forgery. In the response, Appellants also requested discovery pursuant to Rule 56(d) of the Federal Rules of Civil Procedure, explaining that Aflac had failed to make Hammond available for a deposition and that Hammond's deposition was necessary to “fully and completely respond” to Aflac's summary judgment motion. Aflac replied to the Appellants' response by filing supplemental evidence in support of its summary judgment motion and moving to strike Foley's affidavit. Appellants filed a response to Aflac's motion to strike Foley's affidavit, and also renewed their motion for Rule 56(d) discovery.

On September 8, 2011, the district court entered its memorandum opinion and order (the “September 8th Order”) that, in relevant part: (1) denied Appellants' motion to dismiss based on Colorado River; (2) denied Appellants' Rule 56(d) discovery request; and (3) reserved ruling on Aflac's summary judgment motion and motion to strike Foley's affidavit pending a Daubert hearing. Shortly thereafter, Appellants filed a motion for reconsideration of the district court's denial of Appellants' Rule 56(d) discovery request. Appellants also filed a motion to strike the affidavit of Aflac's signature expert, William Flynn (“Flynn”). The district court held a Daubert hearing focusing on each parties' challenge to the expert affidavits offered by the opposing party relating to whether the signature on the arbitration acknowledgment form was the decedent's or, instead, was a forgery.

On November 3, 2011, the district court entered its memorandum opinion and order (the “November 3rd Order”) that: (1) denied Appellants' motion for reconsideration; (2) denied Appellants' motion to strike Flynn's affidavit; (3) granted Aflac's motion to strike Foley's affidavit; and (4) granted Aflac's summary judgment motion. On the same day, the district court also entered an order administratively closing the federal action pending notification by the parties that the arbitration proceedings had been completed. On March 13, 2012, the district court, pursuant to Appellants' motion for certification pursuant to Rule 54(b) of the Federal Rules of Civil Procedure, entered a final judgment compelling arbitration. Appellants timely filed a notice of appeal.

II.

Appellants first contend that the district court should have abstained under Colorado River in deference to the state court proceedings ongoing in Mississippi relating to Aflac's payment of benefits to Ashley. “We apply a two-tiered standard of review in abstention cases. Although we review a district court's abstention ruling for abuse of discretion, we review de novo whether the requirements of a particular abstention doctrine are satisfied.” Brown v. Pac. Life Ins. Co., 462 F.3d 384, 394 (5th Cir.2006) (quotation omitted).

Colorado River abstention is appropriate only when the federal and state “suits are parallel, having the same parties and the same issues.” Stewart v. W. Heritage Ins. Co., 438 F.3d 488, 491 (5th Cir.2006) (citation omitted). The federal and state lawsuits in this case are far from parallel. The state action undisputedly involves additional defendants and issues not involved in the federal action, which is limited to the narrow issue of whether arbitration applies to the dispute between Appellants and Aflac and its agents. Although we have noted that it might not be necessary that the parties and issues are absolutely identical in every instance for Colorado River abstention to be appropriate, see Brown, 462 F.3d at 395 n. 7, this case is not an example of the exception to the general rule.

Even if the state and federal cases were sufficiently parallel, Colorado River abstention would be inappropriate because exceptional circumstances are not present here. Colorado River abstention allows a court to abstain from a case only in “exceptional circumstances.” Brown, 462 F.3d at 394. Courts consider six factors to determine whether “exceptional circumstances” exist:

(1) assumption by either state or federal court over a res; (2) relative inconvenience of the fora; (3) avoidance of piecemeal litigation; (4) order in which jurisdiction was obtained by the concurrent fora; (5) extent federal law provides the rules of decision on the merits; and (6) adequacy of the state proceedings in protecting the rights of the party invoking federal jurisdiction.

Id. at 395 (citations omitted). Determining whether it is appropriate to dismiss a case under this doctrine “does not rest on a mechanical checklist, but on a careful balancing of the important factors as they apply in a given case, with the balance heavily weighted in favor of the exercise of jurisdiction.” Moses H. Cone Mem. Hosp. v. Mercury Constr. Co., 460 U.S. 1, 16, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983).

In this case, none of the six factors weigh in favor of abstention. First, neither the state nor federal court assumed jurisdiction over any res; therefore, the first factor weighs in favor of exercising federal jurisdiction. See Stewart, 438 F.3d at 492 & n. 4. Second, because the state and federal courthouses hearing these cases are in the same city, the inconvenience factor weighs in favor of exercising federal jurisdiction. Id. at 492 (“When courts are in the same geographic location, the inconvenience factor weighs against abstention.” (citation omitted)). Third, any concern of piecemeal litigation here is outweighed by the strong federal policy supporting arbitration. See, e.g., Brown, 462 F.3d at 396 (“Allowing a federal court to order arbitration, even where a state court may construe an arbitration clause differently, is fully consistent with ... established congressional intent.”).

The fourth...