Nat'l Cas. Co. v. Franklin County

Decision Date29 April 2010
Docket NumberCivil Action No. 3:09CV526TSL-FKB.
Citation718 F.Supp.2d 785
PartiesNATIONAL CASUALTY COMPANY, Plaintiff v. FRANKLIN COUNTY, MISSISSIPPI; Franklin County Board of Supervisors, et al., Defendant.
CourtU.S. District Court — Southern District of Mississippi

OPINION TEXT STARTS HERE

James W. Shelson, Justin L. Matheny, Phelps Dunbar, Jackson, MS, for Plaintiff.

John Alexander Purvis, Mason Ernest Lowe, Bradley Arant Boult Cummings LLP, Jackson, MS, James A. Torrey, Jr., Lane B. Reed, Mary Kathryn Kirkpatrick, McGehee, McGehee & Torrey, Meadville, MS, for Franklin County, Mississippi Franklin County Board of Supervisors.

Robert B. McDuff, Sibyl C. Byrd, Law Office of Robert McDuff, Robert B. McDuff, Attorney, Jackson, MS, David L. Kelston, Adkins, Kelston & Zavez, PC, Boston, MA, for Thomas Moore, Thelma Collins.

MEMORANDUM OPINION AND ORDER

TOM S. LEE, District Judge.

Plaintiff National Casualty Company brought the present action seeking a declaratory judgment that it has no duty to defend or indemnify Franklin County, Mississippi for a lawsuit filed against the County in 2008, while a law enforcement liability insurance policy issued by National Casualty to the County was in effect. This cause is presently before the court on the motion of defendants Franklin County, Mississippi and Franklin County Board of Supervisors (Franklin County) to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. National Casualty has responded to the motion. Having considered the memoranda of authorities submitted by the parties, the court is of the opinion that National Casualty's complaint does not state a viable claim for a declaratory judgment that it has no duty to defend, and accordingly, that part of its complaint will be dismissed.

The purpose of a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) is “to test the formal sufficiency of the statement of the claim for relief; the motion is not a procedure for resolving a contest between the parties about the facts or the substantive merits of the plaintiff's case.” 5B Wright & Miller, Federal Practice and Procedure: Civil 3d § 1356 (2004). With the limited exception of those cases described in Rule 9, a complaint need only satisfy the “simplified pleading standard” of Rule 8(a), which requires a “short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). See Swierkiewicz v. Sorema N.A., 534 U.S. 506, 508, 122 S.Ct. 992, 152 L.Ed.2d 1 (2002). The Supreme Court has recently made clear that while Rule 8 is not exacting, it does “require[ ] a ‘showing,’ rather than a blanket assertion, of entitlement to relief,” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 n. 3, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), so that to survive a motion to dismiss under Rule 12(b)(6), “a complaint must contain enough factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face,’ Ashcroft v. Iqbal, --- U.S. ----, ----, 129 S.Ct. 1937, 1950, 173 L.Ed.2d 868 (2009) (quoting Twombly, 550 U.S. at 561-62, 127 S.Ct. 1955). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. A complaint “requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 559, 127 S.Ct. 1955.

In determining whether the complaint is sufficient to state a claim, courts must “consider the complaint in its entirety, as well as other sources ... in particular, documents incorporated into the complaint by reference.” Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322, 127 S.Ct. 2499, 2509, 168 L.Ed.2d 179 (2007). The court must accept all well-pleaded allegations in the complaint as true, and must construe all factual allegations in the light most favorable to the plaintiff. Albright v. Oliver, 510 U.S. 266, 268, 114 S.Ct. 807, 810, 127 L.Ed.2d 114 (1994). Thus, in addressing a motion to dismiss, a court should first review a complaint to determine what allegations are entitled to the assumption of truth. See Iqbal, 129 S.Ct. at 1949-50. “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. at 1949. Indeed, “the Federal Rules do not require courts to credit a complaint's conclusory statements without reference to its factual context.” Id. at 1954. See Barnes v. Montgomery County, Md., Civil Action No. AW-09-2507, 2010 WL 1529277, *1 (D.Md. Apr. 15, 2010) (a court “need not, however, accept unsupported legal allegations, legal conclusions couched as factual allegations, or conclusory factual allegations devoid of any reference to actual events”) (citations omitted). “When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.” Iqbal, 129 S.Ct. at 1954.

In its motion to dismiss, Franklin County maintains that upon comparing the complaint in the underlying lawsuit and the terms of the National Casualty policy, as required by Mississippi's duty to defend law, it is apparent that National Casualty's “no duty to defend” claims fail on their face, and that these claims should be dismissed with prejudice. It further contends that National Casualty's “no duty to indemnify” claims are not ripe at this point, and should be dismissed without prejudice, or alternatively, stayed pending resolution of the underlying litigation.

The Underlying Litigation

In May 1964, in Franklin County, Mississippi, two African-American teenagers, Charles Moore and Henry Dee, were kidnapped, beaten and murdered by members of the White Knights of the Ku Klux Klan (the Klan). Although two Klan members, James Ford Seale and Charles Marcus Edwards, were arrested in November 1964 and charged with the crimes, two months later, the district attorney moved for dismissal of the charges against Seale and Edwards, citing a lack of evidence. More than forty years later, the case was reopened, and in January 2007, Seale was indicted by a federal grand jury on three counts of conspiracy to kidnap Moore and Dee and of conspiracy to commit kidnapping which resulted in the deaths of Moore and Dee. In return for immunity, Charles Edwards testified before the grand jury that indicted Seale. On June 14, 2007, Seale was convicted on all counts and in August 2007, he was sentenced to life in prison.

A year later, in August 2008, Thomas Moore and Thelma Collins, for themselves and on behalf of all of Moore's and Dee's wrongful death beneficiaries (collectively, the Moore plaintiffs), filed a civil rights lawsuit against Franklin County in this court, alleging claims under 42 U.S.C. §§ 1981, 1983 and 1985, 1 based on allegations that Wayne Hutto and Kirby Shell, the Franklin County sheriff and deputy sheriff, respectively, at the time of the kidnappings and murders of Moore and Dee, conspired with the Klan and acted jointly and in concert with members of the Klan to deprive Moore and Dee of their constitutionally protected rights. 2 In broad summary, the Moore plaintiffs alleged that at the time of the kidnappings and murders of their decedents, Franklin County had a policy to protect the Klan from investigation and prosecution and to provide the Klan with impunity for crimes of racial violence. They alleged that Sheriff Hutto and Deputy Shell carried out and acted in accordance with this policy in the Moore/Dee matter in that on the day of the young men's disappearances, Hutto and Shell became aware of facts from which they knew that Moore and Dee were exposed to an unusually grave risk of harm and yet they intentionally failed to take reasonable steps to prevent or repress the Klan kidnappings and murders of Moore and Dee.

Upon learning of the Moore complaint, Franklin County notified National Casualty of the suit. National Casualty agreed to defend Franklin County, subject to a reservation of rights, and then brought the present action, seeking a declaratory judgment that it is not obligated to defend or indemnify Franklin County under its law enforcement liability policy.

The National Casualty Policy and Its Complaint

In 2003, Franklin County secured insurance coverage from National Casualty under a policy of liability insurance. The policy was renewed annually, and was in effect in 2008 when the Moore lawsuit was filed. The policy, a claims made policy, provides coverage for ‘loss' resulting from ‘law enforcement wrongful act(s) which arise out of and are committed during the course and scope of ‘law enforcement activities' ... but only with respect to ‘claims' first made against the insured during the ‘policy period’ or Extended Reporting Period.” The policy defines loss as

any monetary amount which the insured(s) are legally obligated to pay as a result of “law enforcement wrongful act(s) covered by this Coverage Form and will include but not be limited to judgments and settlements, but “loss” will not include fines imposed by law or matters which may be deemed uninsurable under the law pursuant to which this Coverage Form will be construed.

A “law enforcement wrongful act” is defined as “any actual or alleged act, error or omission, neglect or breach of duty by the insured while conducting ‘law enforcement activities' which results in (a) ‘personal injury’; (b) ‘bodily injury’ (including mental anguish and emotional distress); or (c) ‘property damage’ ... caused by an ‘occurrence.’ “Personal injury” is defined to include, among other things, [a]ssault and battery; [d]iscrimination ...; ... [h]umiliation or mental distress; ... and [v]iolation of civil rights protected under 42 USC 1981 et sequential or State law.” Under the policy, the term “law enforcement activities” is defined to mean [t]hose activities conducted by [the Franklin County...

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