Lachney v. Lumbermens Mutual ( 1997 )

UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
_______________________
No. 97-30113
Summary Calendar
_______________________
BARBARA LACHNEY,
Plaintiff-Appellant,
versus
LUMBERMENS MUTUAL CASUALTY COMPANY,
Defendant-Appellee.
_________________________________________________________________
Appeal from the United States District Court
for the Western District of Louisiana
Alexandria Division
(96-CV-901)
_________________________________________________________________
October 13, 1997
Before JONES, DeMOSS and PARKER, Circuit Judges.
PER CURIAM:1
Barbara Lachney appeals the district court’s denial of
her motion to remand as well as the district court’s grant of
summary judgment in favor of Lumbermens Mutual Insurance Company
(“Lumbermens”). Finding no error in either ruling, we affirm.
Lachney was injured in an automobile accident in April
1995. Lachney worked for Johnson & Johnson and, at the time of
1
Pursuant to Local Rule 47.5, the court has determined that this opinion
should not be published and is not precedent except under the limited
circumstances set forth in Local Rule 47.5.4.
the accident, she was driving a car furnished to her by Johnson &
Johnson. Lorraine Giddings was the other driver involved in the
accident. Giddings was a permissive user of a vehicle owned by
Donald Smith, the named insured in a $10,000 liability policy
issued by Financial Indemnity Company (“Financial”).
Lachney sued Lumbermens in Louisiana state court,
alleging that she should receive payment under the uninsured or
underinsured motorist (“UM”) coverage provided by Lumbermens to
Johnson & Johnson on company-owned and leased vehicles.
Lachney’s damages claim exceeds the limits of the Financial
policy covering Donald Smith.
Lumbermens removed the case to federal court based on
diversity. After removal, Lachney moved for leave to file an
amended complaint against Giddings and Financial. The district
court granted leave to amend. Since both Lachney and Giddings
were Louisiana citizens, Lachney moved to remand.
Lumbermens responded by filing a motion to recall the
order permitting the amended complaint against Giddings and
Financial on the grounds that the joinder was merely to defeat
diversity. The district court granted this motion and denied the
motion to remand. The court found the first factor outlined in
Hensgsens v. Deere & Co., 833 F.2d 1179, 1182 (5th Cir. 1987),
the purpose of the post-removal amendment, to be dispositive:
2
Plaintiff has been aware of Giddings’
identity and role in the underlying tort from
day one. At the time plaintiff filed suit in
state court against Lumbermens on her UM
coverage claim, she could have easily named
Giddings and Financial as defendants on the
related underlying tort claim. The
possibility of reaching a settlement with
these defendants did not excuse plaintiff
from failing to name them as party defendants
to this action at the outset. In short, we
find that the principal purpose of
defendant’s post-removal addition of Giddings
and Financial is to defeat this court’s
subject matter jurisdiction.
The district court also reasoned that Lachney would not be
prejudiced by the denial of joinder because it could still pursue
Giddings and Financial in state court, Financial had the
resources to cover any liability on the part of Giddings, and
Financial had made a settlement offer indicating that a state
trial might not even be necessary.
On appeal, Lachney argues that the district court’s
decision is not justified on the basis of a fraudulent joinder
rationale because she can obviously state a cause of action
against Giddings and Financial. Lachney also complains that she
does not have a settlement with Financial and has been put
through the burden of pursuing this case in two forums.
We can not say that the district court abused its
discretion in denying Lachney’s attempts to join Giddings and
Financial post-removal. Under 28 U.S.C. §1447(e), the district
court has discretion to deny post-removal attempts to join non-
3
diverse defendants, and the Hensgsens factors are still
appropriately employed by the court in exercising that
discretion. See Tillman v. CSX Transportation, Inc., 929 F.2d
1023, 1029 (5th Cir.), cert. denied, 502 U.S. 859 (1991). The
authorities cited by Lachney deal with the broad ability of the
plaintiff to add parties pre-removal, rather than any limits on
the district court’s discretion in allowing the addition of non-
diverse parties post-removal.
After the denial of remand, Lumbermens filed a motion for
summary judgment on the grounds that Johnson & Johnson had
executed a valid waiver of UM coverage in its policy. Louisiana
law dictates that UM coverage is automatically provided in a
liability policy, and requires that any rejection of such
coverage be unambiguous to be effective. See Tugwell v. State
Farm Ins. Co., 609 So. 2d 195 (La. 1992). See also La.R.S.
22:1406. An insured has three options: 1) UM coverage equal to
the bodily injury limits on the liability policy, 2) UM coverage
lower than the bodily injury limits on the liability policy, but
not less than $20,000, or 3) no UM coverage. Id. at 197.
The district court found that Johnson & Johnson, through
its manager of risk management, effectively rejected UM coverage
in the Lumbermens policy by signing a rejection form that had an
“x” placed in boxes next to the statements “I reject Uninsured
Motorists Coverage Bodily Injury for owned automobiles” and “I
4
reject Uninsured Motorists Coverage Bodily Injury for hired and
non-owned automobiles ... .” The district court found that the
rejection form properly informed the insured of the three options
available under Louisiana law. The district court also noted the
affidavit of Wayne Klokis stating that he was adequately informed
of his three options and affirmatively chose to reject UM
coverage.
On appeal, Lachney contends that the district court
overlooked ambiguities in the rejection form and improperly
relied on the Klokis affidavit as evidence of the insured’s
intent. Specifically, Lachney notes that the rejection form does
not include $20,000, the statutory minimum, in the list of
“available limits” under the policy. Similarly, Lachney faults
the form for not listing $5,000,000, or the limit on the
liability policy, as one of the “available limits.”
However, the policy does state that “[a]s required by
Louisiana law your policy has been issued with Uninsured
Motorists Coverage at limits equal to your bodily injury
liability limits. You may choose to select lower or higher
limits, but not less than the Financial Responsibility Limit of
$20,000.00 per ‘accident.’” This is a correct statement of
Louisiana law, and the rejection form included a blank for the
insured to write in the amount of UM coverage desired. Thus, we
agree with the district court that the form “permitted the
5
insured to make a meaningful selection from among the insurance
options required by Louisiana law, even if the ‘available limits’
listed did not include every dollar amount between $20,000 and
$5,000,000.” We also agree that the form “presented a clear,
unambiguous, and unmistakable rejection of UM coverage under
Louisiana law.” The district court’s interpretation finds ample
support in the recent decision in Daigle v. Authement, 691 So. 2d
1213 (La. 1997).2
For the foregoing reasons, the judgment of the district
court is AFFIRMED.
AFFIRMED.
2
In addition, although it is unclear to what extent the district court
relied on the Klokis affidavit, Louisiana courts are not as hostile to the use
of such documents to show intent as Lachney claims. See Moyles v. Cruz, 682 So. 2d
326, 328-331 (La. Ct. App. 1996).
6