New York Life Ins Co v. Gillispie ( 2000 )

Revised March 8, 2000
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
________________________
No. 98-60654
________________________
NEW YORK LIFE INSURANCE COMPANY,
Plaintiff-Appellant,
versus
SHEREE GILLISPIE,
Defendant-Appellee.
_______________________________________________
Appeal from the United States District Court
for the Northern District of Mississippi
_______________________________________________
February 22, 2000
Before GARWOOD, WIENER, and DeMOSS, Circuit Judges.
WIENER, Circuit Judge:
In this insurance coverage dispute, Plaintiff-Appellant New
York Life Insurance Company (“New York Life”) asks us to reverse
the district court’s dismissal of its motion for a preliminary
injunction enjoining on grounds of res judicata and collateral
estoppel a lawsuit brought against it in state court by Defendant-
Appellee Sheree Gillispie. The district court ruled that the
issuance of such an injunction is prohibited by the Anti-Injunction
Act, 28 U.S.C. § 2283, which generally denies the federal courts
the power to enjoin state court proceedings. New York Life
contends that the district court erred in so ruling, arguing that
the instant case falls within the relitigation exception to the
Anti-Injunction Act. Agreeing with New York Life, we reverse and
remand with instructions to the district court to enter the
injunction.
I
Facts and Proceedings
Ronald Gillispie died in 1993. His wife, Sheree Gillispie, is
the named beneficiary of a life insurance policy issued to Mr.
Gillispie by New York Life Insurance Company. Shortly after Mr.
Gillispie’s death, Mrs. Gillispie submitted a claim to New York
Life alleging entitlement to the proceeds of the policy. New York
Life denied the claim, contending that Mr. Gillispie’s death was
the result of a suicide. Suicide is unambiguously excluded from
coverage under the policy.
In 1995, Mrs. Gillispie filed a complaint against New York
Life in the United States District Court for the Northern District
of Mississippi, alleging breach of contract and bad faith denial of
benefits. New York Life moved for summary judgment. Mrs.
Gillispie’s attorney did not respond to the motion. In early 1996,
the court granted New York Life’s motion for summary judgment,
explicitly finding that “[a]ll evidence points to the decedent’s
death as a suicide.”
Mrs. Gillispie subsequently hired new counsel to represent
her. Her new attorney succeeded in convincing the Chancery Court
of Tippah County, Mississippi to order the issuance of an amended
death certificate declaring the cause of Mr. Gillispie’s death to
be accidental. In 1997, Mrs. Gillispie filed another complaint
against New York Life, this time in the Circuit Court of Tippah
County, Mississippi. The complaint stated the same basic causes of
action as had the 1995 federal suit, alleging breach of contract
and bad faith denial of benefits.
New York Life removed the suit to federal court, but it was
subsequently remanded for lack of diversity jurisdiction. New York
Life then brought the instant action in federal district court,
seeking to enjoin the state court proceedings on grounds of res
judicada and collateral estoppel. The district court dismissed New
York Life’s action with prejudice, finding that (1) it was barred
by the Anti-Injunction Act and (2) the relitigation exception to
the Anti-Injunction Act was inapplicable. This appeal followed.
II
Analysis
A. Standard of Review
We review the denial of a preliminary injunction for abuse of
discretion.1 Conclusions of law made with respect to the denial of
a preliminary injunction, however, are reviewed de novo.2 The only
issue before the Court is the proper scope and application of the
relitigation exception to the Anti-Injunction Act. Our review is
therefore de novo.
B. The Relitigation Exception to the Anti-Injunction Act
1
Hoover v. Morales, 146 F.3d 304, 307 (5th Cir. 1998).
2
Peaches Entertainment Corp. v. Entertainment Repertoire
Assocs., Inc., 62 F.3d 690, 693 (5th Cir. 1995).
Although the Anti-Injunction Act generally denies federal
courts the power to “grant an injunction to stay proceedings in a
State court,”3 it provides that a federal court may enjoin state
court proceedings “to protect or effectuate its judgments.”4 This
exception “was designed to permit a federal court to prevent state
litigation of an issue that previously was presented to and decided
by the federal court. It is founded in the well-recognized
concepts of res judicata and collateral estoppel.”5 We apply a
four-part test to determine whether the exception is applicable:
First, the parties in a later action must be
identical to (or at least in privity with) the
parties in a prior action. Second, the
judgment in the prior action must have been
rendered by a court of competent jurisdiction.
Third, the prior action must have concluded
with a final judgment on the merits. Fourth,
the same claim or cause of action must be
involved in both suits.6
The only issue before us today is whether Mrs. Gillispie’s 1997
state suit presents “the same claim or cause of action” as did her
1995 federal suit.7
The parties have manifestly different views concerning the
issues presented by Mrs. Gillispie’s two lawsuits. New York Life
contends that the two suits present the same issue: Whether Ronald
3
28 U.S.C. § 2283
4
Id.
5
Chick Kam Choo v. Exxon Corp., 486 U.S. 140, 147 (1988).
6
United States v. Shanbaum, 10 F.3d 305, 310 (5th Cir.
1994).
7
Id.
Gillespie died as the result of a suicide or as the result of an
accident. Mrs. Gillispie, on the other hand, contends that the
first lawsuit merely determined whether New York Life had a
contractual duty to pay based on then-available evidence, whereas
the purpose of the second lawsuit is to have the courts determine
whether New York Life has a contractual duty to pay based on now-
available evidence, central to which is the amended death
certificate.
The district court erred in adopting Mrs. Gillispie’s view of
the case. We use a transactional test to determine whether two
claims involve the same cause of action, under which the critical
question is “not the relief requested or the theory asserted but
whether the plaintiff bases the two actions on the same nucleus of
operative facts.”8 In evaluating the res judicata effect of a
prior claim on a subsequent one, the transactional test does not
inquire whether the same evidence has been presented in support of
the two claims, but rather asks whether the same key facts are at
issue in both of them. In both of Mrs. Gillispie’s claims, there
is only one key fact that is relevant: Whether Ronald Gillispie
died as the result of a suicide or as the result of an accident.
The 1995 federal suit resulted in a summary judgment determination
that “[a]ll evidence points to the decedent’s death as a suicide.”
Mrs. Gillispie can only win her 1997 state suit by convincing the
state court that the 1995 federal judgment was in error. This is
8
Agrilectric Power Partners v. General Elec. Co., 20 F.3d
663, 665 (5th Cir. 1994).
precisely the type of claim that is barred by the doctrine of res
judicata, and that in turn is precisely the type of situation that
the relitigation exception to the Anti-Injunction Act is intended
to cover.
It is true, as Mrs. Gillispie points out, that the federal
court did not determine in 1995 whether New York Life breached its
contract by refusing to pay once the court-amended death
certificate showing death to be accidental was submitted. Indeed,
the court could not have made such a determination because the
amended death certificate did not exist in 1995. But Mrs.
Gillispie is wrong in her contention that the federal judgment in
1995 merely determined that New York Life did not owe an obligation
to Mrs. Gillispie on the basis of then-existing evidence, leaving
open to question whether New York Life might in the future come to
owe an obligation to Mrs. Gillispie should new evidence emerge.
New York Life’s contractual obligation to Mrs. Gillispie is not a
transient thing, dependent on kaleidoscopic evidence and subject to
relitigation each time a new or revised fact emerges. Rather, New
York Life’s contractual obligation is a fixed and determinate
thing, and is dependent only on the actual events surrounding
Ronald Gillispie’s death.
The 1995 federal judgment determined that Ronald Gillispie’s
death was the result of a suicide. If the federal court’s decision
were based on faulty evidence, Mrs. Gillispie’s proper courseof
action was to invoke Rule 60 of the Federal Rules of Civil
Procedure, which allows for the setting aside of a judgment on the
basis of newly discovered evidence. Merely filing a new claim in
a different forum offends the doctrine of res judicata.
As this case clearly falls within the boundaries of the
relitigation exception to the Anti-Injunction Act, we reverse the
judgment of the district court and remand the case to the district
court (1) for issuance of an injunction enjoining Mrs. Gillispie
from further prosecuting her state court action against New York
Life and (2) for any further proceedings that are necessary,
consistent with this opinion.
REVERSED; REMANDED with instructions.