Wilson v. Kemper Corp. Servs.

• Decision Date: 13 October 2022
• Docket Number: CIVIL 5:22-cv-62-DCB-LGI
• Parties: MARIA WILSON PLAINTIFF v. KEMPER CORPORATE SERVICES, INC., UNION NATIONAL FIRE INSURANCE COMPANY, ROBIN WILSON, ANGELA WASHINGTON, JOHN DOE ENTITIES 1-5 AND JOHN DOES PERSONS 1-5. DEFENDANTS
• Court: U.S. District Court — Southern District of Mississippi

MARIA WILSON PLAINTIFF v. KEMPER CORPORATE SERVICES, INC., UNION NATIONAL FIRE INSURANCE COMPANY, ROBIN WILSON, ANGELA WASHINGTON, JOHN DOE ENTITIES 1-5 AND JOHN DOES PERSONS 1-5. DEFENDANTS

CIVIL No. 5:22-cv-62-DCB-LGI

United States District Court, S.D. Mississippi, Western Division

October 13, 2022

ORDER

DAVID C. BRAMLETTE III UNITED STATES DISTRICT JUDGE

THIS MATTER is before the Court on Kemper Corporate Services, Inc (“Kemper”), Union National Fire Insurance Company (“UNFIC”), and Angela Washington's (“Washington”) Motion to Compel Arbitration [ECF No. 3]^[1], Defendant Robin Wilson's Motion to Set Aside Entry of Default [ECF No. 7], and Maria Wilson's (“Plaintiff”) Motion to Remand [ECF No. 16]. The Court having examined the Motions, the parties' submissions, the record, the applicable legal authority, and being fully informed in the premises, finds as follows:

I. Procedural & Factual Background This matter stems from a dispute regarding an insurance claim filed by Plaintiff. On August 27, 2018, UNFIC issued Plaintiff an insurance policy covering personal property located at 2170A Tillman Chapel Road, Pattison, Mississippi 39144. [ECF No. 1-1] at 5.

Although Plaintiff can sign her name, she is unable to read or write. [ECF No. 14-4] at 2. Accordingly, Defendant Wilson filled out the insurance application for Plaintiff, who then signed the agreement. Id.

Sometime after signing the application, Plaintiff received the UNFIC insurance policy. Id. That policy contained an arbitration agreement, which covers any matter arising out of or related to the policy, the claimant's relationship with UNFIC, its agent, or affiliate company. [ECF No. 4] at 1. Plaintiff began paying the premiums on this policy. [ECF No. 14-1] at 4.

On April 1, 2019, a fire destroyed that residence and Plaintiff's personal property therein. [ECF No. 1-1] at 5-6. Plaintiff filed an insurance claim with UNFIC on April 17, 2019. Id. at 6. Following an investigation UNFIC uncovered that Plaintiff did not live at the insured address, as required for coverage by the insurance agreement.^[2] [ECF No. 1] at 1-2; [ECF No. 1-5] at 8. Therefore, UNFIC denied Plaintiff's claim. [ECF No. 1] at 2.

On April 4, 2022, Plaintiff filed suit in the Circuit Court of Claiborne County, Mississippi, claiming damages on claims of breach of contract, tortious breach of contract, breach of good faith and fair dealing, negligence of Defendant Wilson, negligence of Defendant Washington, negligence and gross negligence of UNFIC and Kemper, fraud, and bad faith. [ECF No. 1-1].

Plaintiff served Defendant Wilson with process on June 14, 2022. [ECF No. 8] at 2. An answer was due on July 14, 2022. Id. Plaintiff then served Kemper and UNFIC on June 24, 2022, and Washington on July 1, 2022. [ECF No. 16] at 1.

On July 18, 2022, more than 30 days after service on Defendant Wilson, Plaintiff filed for an Entry of Default, which was entered the next day for failure to answer. [ECF No. 11] at 1. On that same day, Plaintiff filed a Motion for Default Judgment against Defendant Wilson. Id.

On July 25, 2022, Defendant UNFIC filed a notice of removal to this Court [ECF No. 1], followed by a Motion to Compel Arbitration on July 27 [ECF No. 3]. On August 1, 2022, Defendant Wilson filed an answer [ECF No. 5] and on August 5 filed a Motion to Set Aside Entry of Default [ECF No. 7]. On August 24, 2022, Plaintiff filed a Motion to Remand. [ECF No. 16].

Plaintiff is a citizen of Mississippi, as are Defendants Wilson and Washington. [ECF No. 1-1] at 2-3. Kemper is a citizen of Illinois and UNFIC is a citizen of Louisiana. Id. Defendant Wilson was the insurance agent who handled Plaintiff's insurance policy application; Washington was Wilson's supervisor but had no contact with the Plaintiff. [ECF No. 1] at 6. Defendant Wilson denies that she ever represented to Plaintiff that her personal property would be covered by the policy even if she did not live at the address covered by the policy. [ECF No. 1-2] at 3.

II. Defendants' Motion to Compel Arbitration

Defendants, in this Motion to Compel Arbitration, request:

(1) an Order pursuant to 9 U.S.C. § 4 compelling arbitration of Plaintiff's claims against the Defendants; (2) an Order pursuant to 9 U.S.C. § 3 and other law enjoining Plaintiff from proceeding with or attempting to judicially prosecute any claims against Defendants until this Court has ruled upon the enforceability of the arbitration provisions at issue and an arbitration has been conducted, concluded, and finally confirmed in accordance with the terms of the applicable arbitration provisions; staying this case as to Defendants pending arbitration with the decision of the arbitrator to be entered as the judgment of the Court;

(3) an expedited ruling on this matter pursuant to 9 U.S.C. § 4;

(4) an Order staying discovery as to all parties until such time as the Court rules on Defendants' Motion to Compel Arbitration and to Stay Proceedings Pending Arbitration; and

(5) such further, different, or additional relief as may be appropriate under the premises.

[ECF No. 3] at 2-3.

Magistrate Judge Isaac entered an Order Staying Discovery in this case on August 10, 2022, in accordance with Rule 16(b)(3)(B) of the Local Uniform Civil Rules for the Northern and Southern Districts of Mississippi, which requires staying proceedings when a party has filed a motion to compel arbitration. [ECF No. 10]. That request is now moot.

a. Legal Standard

When adjudicating a motion to compel arbitration, courts first must determine whether the parties agreed to arbitrate the dispute in question. Fleetwood Enters., Inc. v. Gaskamp, 280 F.3d 1069, 1073 (5th Cir.2002).

In order to make this determination, courts must decide: “(1) whether there is a valid agreement to arbitrate between the parties; and (2) whether the dispute in question falls within the scope of that arbitration agreement.” Personal Sec. & Safety Sys., Inc. v. Motorola, Inc., 297 F.3d 388, 392 (5th Cir.2002) (citing OPE Int'l LP v. Chet Morrison Contractors, Inc., 258 F.3d 443, 445 (5th Cir.2001) (citations and internal quotation marks omitted)).

If a court decides that the parties have agreed to arbitrate the dispute in question, it then must determine “whether legal constraints external to the parties' agreement foreclosed the arbitration of those claims.” Webb, 89 F.3d at 258. Furthermore, arbitration “should not be denied unless it can be said with positive assurance that [the] arbitration clause is not susceptible of any interpretation which would cover the dispute at issue.” Municipal Energy Agency of Miss. V. Big Rivers Elec. Corp., 804 F.2d 338, 342 (5th Cir. 1986).

b. Analysis

This Court will first address the validity of the agreement before considering whether Plaintiff's claims fall within the scope of that agreement. i. Validity of the Arbitration Agreement

The Arbitration Agreement attached to Plaintiff's insurance policy provided in relevant part that:

This Arbitration Agreement and waiver of right to trial by Jury (“Arbitration Agreement”) requires that any dispute involving this policy between the company, and the insured, owner, beneficiary, or any other party who has an interest as a claimant (“claimant”), must be resolved through binding arbitration.

[ECF No. 3-1] at 15.

Plaintiff argues that the Arbitration Agreement is invalid, alleging that she never signed it, there was no meeting of the minds, and that the Agreement is procedurally and substantively unconscionable. [ECF No. 14] at 2.

The Court will first discuss Plaintiff's signature argument. Id.

Plaintiff argues that the policy that she agreed to was merely what was listed on her signed application for insurance, not on the later-delivered insurance policy that included the Arbitration Agreement. [ECF No. 15] at 2; [ECF No. 3-1].

“[A]rbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit.” Hill v. G E Power Systems, Inc., 282 F.3d 343, 347 (5th Cir. 2002).

Still, such an application is merely an offer to contract. Mutual Omaha Insurance Company v. Driskell, 293 So.3d 261, 263 (Miss. 2020); Provident Life & Accident Inc. Co. v. Goel, 274 F.3d 984, 992 (5th Cir. 2001). Even though an insurance application states different terms from the ultimate policy, making payments on the insurance premium confirms acceptance of those final terms. Driskell, 293 So.3d at 264.

Because Plaintiff paid the premiums on the insurance policy that contained the Arbitration Agreement, the lack of a signature on that term is immaterial, as it was accepted by performance. [ECF No. 14-1] at 4.

The Court will now discuss Plaintiff's argument that there existed no meeting of the minds. [ECF No. 14] at 2.

Plaintiff argues that the Arbitration Agreement is invalid for lack of a meeting of the minds, because it was not included in the initial application that she signed and that it was only later delivered to her, which she alleges obviates consent to the policy. [ECF No. 15] at 4. Plaintiff's contention hinges on the argument that, because she cannot read or write, Defendant Wilson's failure to read the entire policy to her or disclose that the application was not the final policy precluded a meeting of the minds.

Contracts require a meeting of the minds to be valid. Am. Heritage Life Ins. Co. v. Lang, 321 F.3d 533, 538 (5^th Cir. 2003). Nevertheless, that requirement can be met and a party can be contractually bound by signing the agreement even if that party, literate or not, does not read the agreement. Id. (quoting Samson Plastic Conduit & Pipe Corp. v. Battenfeld Extrusionstechnik GMBH, 718 F.Supp. 886, 890 (M.D.Ala.1989); St. Petersburg Bank & Trust Co. v....