Jarrett v. Dillard

• Decision Date: 02 July 2015
• Docket Number: No. 2013–CT–00035–SCT.,2013–CT–00035–SCT.
• Citation: 167 So.3d 1147
• Parties: Larry JARRETT and Dixie Products Company v. Robert Houston DILLARD, Executor of the Estate of Roy F. Dillard, Deceased.
• Court: Mississippi Supreme Court

167 So.3d 1147

Larry JARRETT and Dixie Products Company

v.Robert Houston DILLARD, Executor of the Estate of Roy F. Dillard, Deceased.

No. 2013–CT–00035–SCT.

Supreme Court of Mississippi.

July 2, 2015.

J. Max Edwards, Jr., attorney for appellants.

T.K. Moffett, W. Brent McBride, attorneys for appellee.

EN BANC.

ON WRIT OF CERTIORARI

WALLER, Chief Justice, for the Court:

¶ 1. This proceeding involves efforts by an employee, Ray Dillard, to collect workers' compensation benefits from the president and majority shareholder, Larry Jarrett, of a company, Dixie Products Inc., that failed to provide benefits awarded by the Mississippi Workers' Compensation Commission. Finding the Court of Appeals improperly applied res judicata and the statute of limitations against the employee, we reverse the holding of the Court of Appeals and reinstate and affirm the circuit court judgment in favor of the employee against the president and company, jointly and severally.

FACTS AND PROCEDURAL HISTORY

¶ 2. This section has been taken from the Court of Appeals opinion.

During June 1997, the [Workers' Compensation] Commission held that Dillard suffered a compensable injury and awarded him approximately $200 per week in temporary total disability benefits until further order. The Commission also ordered Dixie Products to pay for Dillard's medical bills, to the extent that they resulted from his injury. [The Court of Appeals] affirmed the Commission's judgment in Dixie Products Co. v. Dillard, 770 So.2d 965, 967 (Miss.Ct.App.2000). The mandate issued on November 27, 2000.

Three days after the mandate issued, one of Dillard's attorneys filed a lis pendens notice regarding several parcels of real property that Jarrett owned. Dixie Products did not own any of the property listed in the lis pendens notice. However, Dillard's attorney released the lis pendens notice during February 2001. Dillard's attorney sent Jarrett a letter notifying him of the release. Within that letter, Dillard's attorney told Jarrett that “[w]e have also requested [that] the Commission ... enter a judgment against you personally since you failed to maintain [w]orker[s'] [c]ompensation insurance.”

In June 2001, Dillard's other attorney sent a letter to the administrative judge (AJ). The letter stated that there were a number of unresolved issues remaining in Dillard's workers' compensation claim. According to Dillard's attorney, one of the remaining issues was: Whether [Dillard's] award should be against [Dixie Products] solely or should be against [Jarrett] since [he] failed to maintain worker[s'] compensation insurance and since, upon information and belief, [the assets of Dixie Products are] grossly insufficient to satisfy any claim, [Dixie Products] has been depleted of all assets, and [it] is no longer in operation.

Dillard died on June 10, 2005. At that time, the AJ had not conducted a hearing on the unresolved issues in Dillard's workers' compensation case. Approximately two months after Dillard died, his son, Robert Dillard (Robert), opened the Estate. Robert was subsequently appointed as the executor of Dillard's will.

Later, the AJ heard the remaining issues in Dillard's workers' compensation claim. The AJ entered an opinion on April 11, 2007. The AJ stated that “benefits have continued to be paid,” but the AJ did not specify how much Dillard had been paid. The AJ further stated that Dillard “is entitled to receive and has been receiving permanent total disability benefits.” Finally, the AJ held that Dillard was entitled to expenses associated with reasonable and necessary medical treatments for his work-related injury, and penalties and interest for any past-due payments.

Ten months later, the AJ entered an amended order. It is unclear what prompted the AJ's amended order. In any event, the AJ held that Dillard was entitled to approximately $125,000 in permanent total disability benefits, ten percent interest in past-due installments, and total benefits of approximately $136,400. No one appealed the AJ's judgment.

On June 18, 2009, the Estate filed a complaint on behalf of the estate against Jarrett and Dixie Products in the circuit court. The Estate claimed that Dixie Products “was required to carry worker[s'] compensation insurance at all times and [it] failed to do so. Therefore, [Jarrett] is personally liable for the judgment rendered in the worker[s'] compensation claim.” Jarrett filed an answer. Among other things, Jarrett argued that the Estate's claim was barred by the statute of limitations and the doctrine of res judicata.

Later, the Estate filed a motion for a judgment on the pleadings or, alternatively, for summary judgment. The Estate argued that it was entitled to summary judgment against Jarrett in his individual capacity because he had been the president and secretary of Dixie Products, and it did not have workers' compensation insurance at the time of Dillard's injury. The Estate also argued that the “individual claim against ... Jarrett is wholly unrelated to” Dillard's previous claim for workers' compensation benefits.

In September 2010, the circuit court granted the Estate's motion for summary judgment in part. Specifically, the circuit court held that summary judgment was appropriate against Dixie Products, and the judgment against it should be enrolled. However, the circuit court denied Robert's motion for summary judgment as it pertained to Jarrett's individual liability.

During August 2012, the Estate filed a renewed motion for summary judgment. Essentially, the Estate reiterated its argument that it was entitled to summary judgment against Jarrett in his individual capacity. The circuit court heard the Estate's renewed motion for summary judgment on October 23, 2012. The Estate again claimed that there were no genuine issues of material fact regarding Jarrett's individual liability. Jarrett argued that the Estate's claim was barred by the statute of limitations and the doctrine of res judicata. Jarrett's reasoning was based on the fact that, during 2001, Dillard had informed the AJ that Jarrett's individual liability was an issue, but Dillard failed to obtain a ruling on it. Ultimately, the circuit court granted the Estate's renewed motion for summary judgment, and entered a judgment of approximately $223,000 against Jarrett and Dixie Products “jointly and individually.” Jarrett appeal[ed].

Jarrett v. Dillard, 167 So.3d 1207, 1209–11, 2014 WL 3409146, at *1–2 (Miss.Ct.App.2014), reh'g denied (Dec. 9, 2014), cert. granted, 160 So.3d 704 (Miss.2015).

¶ 3. This Court assigned the appeal to the Court of Appeals, which held that Dillard's claim against Jarrett was barred by res judicata and the statute of limitations. Dillard subsequently filed a petition for writ of certiorari, which this Court granted. Dillard raises three issues, which we rephrase as follows:

I. Whether Dillard's subsequent suit was barred by the doctrine of res judicata.

II. Whether the statute of limitations had run on Dillard's claim against Jarrett.

STANDARD OF REVIEW

¶ 4. The standard of review for summary judgment is de novo. Quinn v. Estate of Jones, 818 So.2d 1148, 1150 (Miss.2002). “A motion for summary judgment should be granted only when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law.” Id. (citing Miss. R. Civ. P. 56(c) ).

DISCUSSION

I. Whether Dillard's subsequent suit was barred by the doctrine of res judicata.

¶ 5. Under the umbrella of res judicata are two distinct categories, claim preclusion and issue preclusion. “Claim preclusion generally refers to the effect of a prior judgment in foreclosing successive litigation of the very same claim, whether or not relitigation of the claim raises the same issues as the earlier suit.” New Hampshire v. Maine, 532 U.S. 742, 748–49, 121 S.Ct. 1808, 1814, 149 L.Ed.2d 968 (2001). Claim preclusion also refers to “the preclusive effect of a judgment in foreclosing litigation of matters that should have been raised in an earlier suit.” Marrese v. Am. Acad. of Orthopaedic Surgeons, 470 U.S. 373, 376, 105 S.Ct. 1327, 1330, 84 L.Ed.2d 274 (1985).

¶ 6. The doctrine of claim preclusion, is based, in part, on the theory of merger. C.I.T. Corp. v. Turner, 248 Miss. 517, 543, 157 So.2d 648, 660 (1963). Once a plaintiff secures a final valid judgment, his original claims, including all claims litigated or that could have been litigated, are merged into his then-existing claim to enforce that judgment. Id. ; Restatement (Second) of Judgments § 18 (1982).

¶ 7. Generally, that judgment may be enforced only against the named defendants in the prior suit. Zenith Radio Corp. v. Hazeltine Research, Inc., 395 U.S. 100, 110, 89 S.Ct. 1562, 1569, 23 L.Ed.2d 129 (1969). The question currently before this Court is whether a judgment obtained against a corporation in a workers' compensation action may be enforced against the corporation's president and majority shareholder where that officer was not a named party in the original suit, or whether that claim is blocked by claim preclusion. This is a question of first impression in Mississippi. But other jurisdictions that have addressed substantially the same issue have held that the judgment may be enforced against such an officer and shareholder where that shareholder was the alter ego of the corporation or controlled the prior litigation. Dudley v. Smith, 504 F.2d 979, 983 (5th Cir.1974) ; Alman v. Danin, 801 F.2d 1, 4 (1st Cir.1986) ; Matthews Constr. Co. v. Rosen, 796 S.W.2d 692 (Tex.1990) ; New Orleans Jazz & Heritage Found., Inc. v. Kirksey, 104 So.3d 714, 718 (La.Ct.App.2012) ; Oceanics Sch., Inc. v. Barbour, 112 S.W.3d 135, 137 (Tenn.Ct.App.2003) ; see also Taylor v. Sturgell, 553 U.S. 880, 893–95, 128 S.Ct. 2161, 2171, 171 L.Ed.2d 155 (2008) (noting “a nonparty is bound by a judgment if [ ]he ‘assumed control’ over the litigation in which that judgment was rendered.”).

¶ 8. In certain circumstances, a plaintiff may seek to pierce the corporate...