Boston v. Titan Indem. Co.

• Decision Date: 15 January 1999
• Docket Number: No. 2:98CV154-B-B.,2:98CV154-B-B.
• Citation: 34 F.Supp.2d 419
• Parties: Jerline Petties BOSTON, Individually and as Personal Representative of the Wrongful Death Beneficiaries of J.C. Petties, Deceased, Plaintiff, v. TITAN INDEMNITY COMPANY and Coahoma County, Mississippi, Defendants.
• Court: U.S. District Court — Northern District of Mississippi

34 F.Supp.2d 419

Jerline Petties BOSTON, Individually and as Personal Representative of the Wrongful Death Beneficiaries of J.C. Petties, Deceased, Plaintiff, v. TITAN INDEMNITY COMPANY and Coahoma County, Mississippi, Defendants.

No. 2:98CV154-B-B.

United States District Court, N.D. Mississippi, Delta Division.

January 15, 1999.

Ralph E. Chapman, Chapman, Lewis & Swan, Tom T. Ross, Jr., Ross, Hunt, Spell & Ross, Clarksdale, MS, for Jerline Petties Boston, plaintiff.

Benjamin E. Griffith, Griffith & Griffith, Cleveland, MS, for Titan Indem. Co., defendant.

David A. Burns, Holcomb Dunbar, Clarksdale, Ms, Tom T. Ross, Jr., Ross, Hunt, Spell & Ross, Clarksdale, MS, for Coahoma County Road Department, Coahoma County Board of Supervisors, Coahoma County, MS, Coleman M. Allen, Jr., Jim Humber, III, Taylor Flowers, Eddie C. Smith and Katherine Young Furr, defendants.

Memorandum Opinion

BIGGERS, Chief Judge.

This cause comes before the court on the plaintiff's motion to remand.¹ The court has duly considered the parties' memoranda and exhibits, including Titan Indemnity Company's supplemental response, and is ready to rule.

A writ of garnishment issued in a state court wrongful death action, Cause No. 14-CI-94-0017, is the subject of the notice of removal filed by Titan Indemnity Company [Titan]. The wrongful death action was brought against Coahoma County [the county] for negligent maintenance of a roadway² pursuant to Miss.Code Ann. § 11-7-13. The notice of removal alleges diversity of citizenship jurisdiction on the grounds that the county³ should be realigned⁴ as a party plaintiff and that diversity exists between the Mississippi wrongful death beneficiaries and defendant Titan, a corporation organized under the laws of the State of Texas and having its principal place of business in Texas. Since it is undisputed that the decedent was a Mississippi citizen, the plaintiff contends that plaintiff Boston, a Missouri citizen, should be deemed a citizen of Mississippi for diversity purposes⁵ and that, unless realigned with Boston, the county defeats complete diversity. The complaint in the wrongful death action states that the action was brought by Boston as the personal representative of the wrongful death beneficiaries of the decedent. However, if Boston is in fact the decedent's personal representative,⁶ then 28 U.S.C. § 1332(c)(2) applies.⁷ Webb v. Banquer, 19 F.Supp.2d 649, 652-53 (S.D.Miss.1998). In any event, without the county's realignment, 28 U.S.C. § 1441(b) precludes removal of this cause.⁸

Realignment of the parties is an exception to the general rule that diversity of citizenship is determined at the commencement of a civil action. Zurn Industries, Inc. v. Acton Const. Co., 847 F.2d 234, 236 (5th Cir.1988). Realignment depends on "the primary or original purpose for filing suit." Id. at 237. The plaintiff contends that the county was properly named a defendant since the wrongful death action was brought to establish liability on the part of the county. The plaintiff and the county reached an agreement providing, inter alia, that the county would pay the plaintiff $42,500 and assign all rights against Titan, the county's liability insurer, to the plaintiff. A judgment was entered against the county in the sum of $557,500 and, under the terms of the agreement, any judgment proceeds collected from Titan up to the amount of $42,500, plus attorney's fees and expenses, would be refunded to the county.

The notice of removal alleges that the writ of garnishment "is a civil action and constitutes a separate cause of action independent of the original and primary action that gave rise to and established the judgment debt." If the garnishment proceeding is a separate civil action, the determinative purpose of this cause is enforcement of the wrongful death judgment against Titan which, in light of the above-referenced agreement, would warrant realignment of the county as a party plaintiff. The plaintiff relies on the Mississippi Supreme Court's characterization as follows:

Garnishment is not a pure, independent action but instead is more in the nature of "an ancillary or auxiliary proceeding, growing out of, and dependent on, another original or primary action or proceeding,. ..."

First Miss. Nat'l Bank v. KLH Industries, Inc., 457 So.2d 1333, 1337 (Miss.1984) (citation omitted).⁹ However, the Fifth Circuit applies the general rule that "garnishment actions against third parties are construed as independent actions from the primary action which established the judgment debt." Berry v. McLemore, 795 F.2d 452, 455 (5th Cir.1986) (footnote omitted) (citing Butler v. Polk, 592 F.2d 1293, 1295 (5th Cir.1979)).¹⁰ The court in Butler concluded that garnishment writs "are in effect suits involving a new party litigating the existence of a new liability" and that "[r]emoval is a matter of federal right." 592 F.2d at 1296. See Moore v. Sentry Ins. Co., 399 F.Supp. 929, 930, 931 (S.D.Miss.1975) ("Even if the Court were required to look to State law to determine whether a garnishment action is [a civil action¹¹ and, thus] removable, Mississippi garnishment proceedings meet the criteria that the suit be one in which an issue of fact might be joined and which is an adversary proceeding calling for judgment independent of the main cause.").

The court finds that the suggestion for garnishment, although assigned the same cause number as the underlying wrongful death action in state court, is a separate civil action within the purview of the removal statutes. See Lewis v. Blackmon, 864 F.Supp. 1, 4 (S.D.Miss.1994) (Fifth Circuit jurisprudence governs the procedural issue of removal of a garnishment action against the insurer of a judgment debtor).¹² Since garnishment of insurance proceeds would be in the county's interest, the court further finds that the county should be realigned as a party plaintiff for purposes of determining diversity of citizenship.¹³ See Moore v. Sentry Ins. Co., 399 F.Supp. at 931 ("`Even if [the nondiverse insured] were to be considered a party to the present [garnishment] proceeding, he should be aligned for jurisdictional purposes with the plaintiff, as it would be to [the insured's] interest to have the judgment against him satisfied by his insurer.'") (quoting Randolph v. Employers Mut. Liability Ins. Co., 260 F.2d 461, 464 (8th Cir.1958), cert. denied, 359 U.S. 909, 79 S.Ct. 585, 3 L.Ed.2d 573 (1959)).

Boston contends that the one-year limitions period under 28 U.S.C. § 1446(b)¹⁴ precludes removal of this cause on the grounds that the notice of removal was filed more than one year after the commencement of the wrongful death action in state court.¹⁵ The garnishment action, as a separate and independent action, was commenced upon the filing of the suggestion for garnishment¹⁶ and thus was timely removed within the applicable thirty-day limitations period under 28 U.S.C. § 1446(b). See New York Life Ins. Co. v. Deshotel, 142 F.3d 873, 887 (5th Cir. 1998) (first paragraph of § 1446(b) applies to actions initially removable).

Boston contends, in the alternative, that the garnishment action falls within the purview of a direct action against an insurer under 28 U.S.C. § 1332(c)(1).¹⁷ The Fifth Circuit¹⁸ has stated that the direct action provision was intended to eliminate diversity jurisdiction over actions brought directly against a foreign liability insurer for injuries or damage caused by a nondiverse insured. Williams v. Liberty Mut. Ins. Co., 468 F.2d 1207, 1209 (5th Cir.1972).¹⁹ See Hernandez v. Travelers Ins. Co., 489 F.2d 721, 723 (5th Cir.) ("The 1964 amendment was a response to `direct action' statutes adopted in Louisiana and Wisconsin, allowing direct actions against liability insurers by persons injured in motor vehicle accidents."), cert. denied, 419 U.S. 844, 95 S.Ct. 78, 42 L.Ed.2d 73 (1974). The court in Hernandez held that an injured employee's action against his employer's workmen's compensation carrier constitutes a direct action under section 1332(c)(1). Id. at 724 (Texas workmen's compensation statute requires a direct action against the workmen's compensation carrier<sup>20</sup> and thus "goes further than a `direct action' statute, which simply permits a suit against the insurer, without joining the insured") (emphasis added). The court concluded:

Whatever may have been the specific evil prompting congressional action in 1964, Congress chose to remove all direct actions from the diversity jurisdiction.

Id. at 723-24 ("when the language of a congressional act is plain and specific, courts have no more license to shorten the reach of the act than to lengthen it") (emphasis in original).

Resolving any doubt in favor of remand,²¹ the court finds that the Mississippi garnishment statute providing for the issuance of a writ of garnishment on a suggestion for garnishment filed by a judgment creditor, Miss.Code Ann. § 11-35-1,²² is the equivalent of a direct action statute "which simply permits a suit against the insurer, without joining the insured." See Moore v. Sentry Ins. Co., 399 F.Supp. at 931 ("The Mississippi garnishment statutes, particularly Miss.Code Ann. § 11-35-47 (1972),²³ clearly are permissive in nature and do not make the resident insured an indispensable party."). The court finds the analysis of a similar state statutory scheme persuasive. Prendergast v. Alliance General Ins. Co., 921 F.Supp. 653 (E.D.Mo. 1996). The court in Prendergast construed the Missouri garnishment statute²⁴ as a direct action statute even though its clear language "seems to require" joinder of the insured judgment debtor. Id. at 655. The court concluded:

Missouri's equitable garnishment statute essentially does in two steps what the Louisiana statute that lead to the change in § 1332(c)(1) did in one step, and provides to the suing plaintiff the same remedy that a direct action against the insurance company would have provided, were that allowed under Missouri law.

Id.²⁵ Similarly,

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