MS Life Ins. Co. v. Baker, 2003-IA-01149-SCT.

• Decision Date: 13 January 2005
• Docket Number: No. 2003-IA-01149-SCT.,2003-IA-01149-SCT.
• Parties: MS LIFE INSURANCE COMPANY and Ms Casualty Insurance Company v. James BAKER, Jr., et al.
• Court: Mississippi Supreme Court

905 So.2d 1179

MS LIFE INSURANCE COMPANY and Ms Casualty Insurance Company v. James BAKER, Jr., et al.

No. 2003-IA-01149-SCT.

Supreme Court of Mississippi.

January 13, 2005.

Walter D. Willson, Roy H. Liddell, Charles E. Griffin, Jackson, attorneys for appellants.

Christopher Wayne Cofer, Harry Merritt McCumber, attorneys for appellees.

Before WALLER, P.J., GRAVES and RANDOLPH, JJ.

WALLER, Presiding Justice, for the Court.

¶ 1. James A. Baker, Jr., joined forty-four other plaintiffs in filing suit in Humphreys County Circuit Court against Mississippi Life Insurance Company, Mississippi Casualty Company, and fifty John Does (hereinafter referred to as Mississippi Life). Generally, the plaintiffs claim that Mississippi Life illegally required credit insurance as part of an offered loan package and fraudulently inflated the cost of insurance premiums. Mississippi Life moved to sever plaintiffs' claims. The trial court denied the motion as well as Mississippi Life's subsequent Motion for Interlocutory Appeal. We then granted the Motion for Interlocutory Appeal. See M.R.A.P. 5.

FACTS

¶ 2. Over a nine-year period, the forty-five plaintiffs in this action obtained loans from the Belzoni office of Peoples Financial Services of the Delta. The plaintiffs signed both the loan agreement and an agreement to purchase credit life, credit disability, and/or credit property insurance from Mississippi Life Insurance Company or Mississippi Casualty Insurance Company. With the exception of eight plaintiff-couples, each of the plaintiffs signed the documents in question separately and independently of their co-plaintiffs.

¶ 3. The relationship between Mississippi Life and Peoples Financial Services developed after Mississippi Life executed an agency agreement for Peoples Financial Services to sell credit insurance when offering loans to customers. In return, Peoples Financial Services received a commission for each sale of insurance. The record contains the deposition of James J. Jernigan, a General Agent for Mississippi Life who originally worked for Central Insurance Services.¹ He testified that Mississippi Life provided no formal training for Peoples Financial Services' employees. He stated that John Mitchell, President of Peoples Financial Services, provided training for its employees.

¶ 4. In the six plaintiffs' depositions available, very little specific information is provided about the transactions with Mississippi Life.² However, four out of the six were consistent in their testimonies to the extent that they alleged nothing was explained to them about the transactions. One of the other two plaintiffs was not even aware she was suing Mississippi Life and could provide almost no details about her experience. The other plaintiff testified that he was not aware that he had credit disability insurance; and although he was pleased when, by chance, he discovered he had such insurance, he felt aggrieved that his credit history had been damaged in the meantime.

¶ 5. Mississippi Life moved to sever the joined plaintiffs, citing the differences in the property secured for each loan, the eleven-year period during which the loans were given, the various combinations of insurance purchased, and the different employees who processed the loans. In response to Mississippi Life's Motion to Sever, the plaintiffs alleged that: (1) Proof of a conspiracy between Mississippi Life and Mississippi Casualty was evidenced by the deposition of James Jernigan of Central Insurance Services who testified that Mississippi Life paid an override commission of 10% to Central Insurance Services, "which [Central Insurance Services] has admitted, through its corporate deposition, that it does not perform any of the services, nor does it assume any of the responsibilities required under" Mississippi law; and (2) Proof of a profit sharing scheme between Mississippi Life and Peoples was evidenced by Jernigan's testimony "that the forms and disclosures were provided by [Mississippi] Life and [Mississippi] Casualty with no input by Peoples [Financial Services]."³ The trial court denied Mississippi Life's Motion to Sever, simply stating that upon considering the motion it found joinder to be "proper under MS Rules [sic] Civil Procedure 20 and [t]he Mississippi Supreme Court decision of American Bankers Insurance Company of Florida v. Alexander, [818 So.2d 1073 (Miss.2001)].

ANALYSIS

¶ 6. Mississippi Life raises two issues in its appeal. First, whether severance was proper under Mississippi Rule of Civil Procedure Rule 20(a). And second, whether allowing joinder in this action will result in a waste of judicial resources and a violation of Mississippi Life's due process rights. Finding the first issue dispositive, we decline to address the second.

A. Rule 20(a)

¶ 7. Mississippi Rule of Civil Procedure 20 gives trial courts broad discretion in determining when and how to try claims. First Investors Corp. v. Rayner, 738 So.2d 228, 238 (Miss.1999). Therefore, we review trial court decisions regarding venue and joinder for abuse of discretion. Janssen Pharmaceutica Group, Inc. v. Bailey, 878 So.2d 31, 45 (Miss.2004); Janssen Pharmaceutica Group, Inc. v. Armond, 866 So.2d 1092, 1095 (Miss.2004). We also note that "a trial court . . . abuses its discretion by joining parties in cases failing to satisfy the two requirements of Rule 20." Armond, 866 So.2d at 1097. Like federal courts, we review cases involving a question of the propriety of Rule 20(a) joinder on a case-by-case basis. See Mosley v. General Motors Corp., 497 F.2d 1330, 1333 (8th Cir.1974).

¶ 8. Under Mississippi Rule of Civil Procedure 20(a), joinder is only proper if both (1) the different plaintiffs' causes of action arise out of the same transaction, occurrence, or series of transactions or occurrences; and (2) some question of law or fact common to all the plaintiffs will arise in the action. Bailey, 878 So.2d at 46 (citing Miss. R. Civ. P. 20(a) (2004)). The purpose of Rule 20(a) is to establish a "procedure under which several parties' demands arising out of the same litigable event may be tried together, thereby avoiding the unnecessary loss of time and money to the court and the parties that the duplicate presentation of the evidence relating to facts common to more than one demand for relief would entail." Miss. R. Civ. P. 20(a) cmt. (2004).

¶ 9. We recently amended the comment to Rule 20(a) significantly, clarifying that before an alleged "transaction or occurrence" will pass muster under Rule 20(a), the court must find a "distinct litigable event linking the parties." Bailey, 878 So.2d at 46 (citing Miss. R. Civ. P. 20(a) cmt. (as amended 2004)). The amendment to the rule resulted in the deletion of some of the language of the comment, including the statement that the "general philosophy of the joinder provisions of these rules is to allow virtually unlimited joinder at the pleading stage[.]" Miss. R. Civ. P. 20(a) cmt. (prior to 2004 amendment). Our language requiring that joined plaintiffs demonstrate the existence of a "distinct litigable event" semantically distinguishes Mississippi Rule of Civil Procedure 20(a) from the requirement under Federal Rule 20(a) that the claims between the different plaintiffs be "logically related." See Mosley, 497 F.2d at 1333

; Jamison v. Purdue Pharma Co., 251 F.Supp.2d 1315, 1322 (S.D.Miss.2003); Hanley v. First Investors Corp., 151 F.R.D. 76, 78-79 (E.D.Tex.1993); see also 6 Charles Alan Wright & Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 1410 (2d ed.1990).

B. Recent Cases Interpreting Pre-amendment Rule 20(a)

¶ 10. In American Bankers Insurance Co. v. Alexander, 818 So.2d 1073, 1075 (Miss.2001), overruled on other grounds, Capital City Insurance Co. v. G.B. "Boots" Smith Corp., 889 So.2d 505, 517 (Miss. 2004),

we dealt with a case of approximately 1371 borrower-plaintiffs who sued a lender, arguing that the lender had used an intricate kickback scheme to force-place the plaintiffs into a collateral protection insurance policy without their permission and without regard for their individual need of insurance. Citing, for the first time in a Mississippi case, the now-stricken language of Rule 20(a) indicating that we "allow virtually unlimited joinder at the pleading stage," the majority held that allowing joinder for the 1371 plaintiffs was not an abuse of discretion. Id. at 1075-79. The Court reasoned that joinder was appropriate since all of the plaintiffs' claims arose "out of the same pattern of conduct, the same type of insurance, and involv[ed] interpretation of the same master policy." Id.

¶ 11. We only decided two cases after American Bankers in which we substantively addressed the application of Rule 20(a) prior to the amendment to the rule. First, in Prestage Farms, Inc. v. Norman, 813 So.2d 732, 734-35 (Miss.2002), we dealt with a case in which all of the joined plaintiffs sued a corporation after its contract with local pig farmers allegedly resulted in a nuisance to those living nearby. Finding the issues presented in Norman to be analogous to American Bankers, we held joinder of the plaintiffs to be proper. Id. at 736. Next, in Illinois Central R.R. v. Travis, 808 So.2d 928, 935-36 (Miss. 2002),overruled on other grounds, Capital City Insurance Co. v. G.B. "Boots" Smith Corp., 889 So.2d 505, 517 (Miss.2004),

we dealt with a case in which the plaintiffs' claims stemmed from a company policy of not warning or protecting its workers from the hazards of asbestos exposure and from the company's alleged breach of its duty to provide a reasonably safe place to work. Finding that the causes of action arose out of the same transaction or occurrence and that they also involved common questions of law or fact, we held joinder to be proper. Id. at 935-36.⁴

¶ 12. However, our jurisprudence took on a decidedly more temperate approach to the issue of joinder when we handed down Janssen Pharmaceutica, Inc. v....