Latisha Bolden v. Nautilus Insurance Company

[DO NOT PUBLISH]
In the
United States Court of Appeals
For the Eleventh Circuit
____________________
No. 22-12748
Non-Argument Calendar
____________________
LATISHA BOLDEN,
Plaintiff-Appellant,
versus
NAUTILUS INSURANCE COMPANY,
Defendant-Appellee.
____________________
Appeal from the United States District Court
for the Middle District of Alabama
D.C. Docket No. 3:20-cv-00390-ECM-JTA
____________________
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2 Opinion of the Court 22-12748
Before NEWSOM , L AGOA , and B RASHER , Circuit Judges.
PER CURIAM:
This is an insurance garnishment suit. Latisha Bolden sued
Arnetta Moore,1 who was insured by Nautilus Insurance Company
through a policy held by the Alabama Education Association. Bol-
den won a default judgment against Moore in state court for $2
million, then amended the complaint to add Nautilus and the AEA.
Nautilus removed the case to federal court. It also filed a
counterclaim seeking a declaratory judgment that it did not owe
coverage to Moore for the judgment against her because either
Moore failed to cooperate in the litigation, as required by the insur-
ance policy, or the event wasn’t covered by the policy. Nautilus
then moved to dismiss the garnishment claim against the AEA and
moved for summary judgment on its counterclaim for declaratory
judgment. Bolden, in turn, moved to remand to the Circuit Court
of Macon County because the AEA defeated diversity.
The district court dismissed the AEA from the case as fraud-
ulently joined and granted Nautilus’s motion for summary judg-
ment on its counterclaim for declaratory judgment. Bolden ap-
peals, arguing that the AEA was improperly dismissed and that the
district court erred in granting summary judgement because there
1 Bolden also sued Dawn Smith-Tucker. The district court severed and re-
manded Bolden’s claims against Smith-Tucker for lack of jurisdiction. We do
not consider the claims against Smith-Tucker here.
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22-12748 Opinion of the Court 3
was a genuine dispute of material fact about whether Moore coop-
erated in the litigation. We disagree and affirm.
I
First, we address jurisdiction—specifically, whether the dis-
trict court erred in dismissing the AEA from the case as fraudu-
lently joined. Bolden is a citizen of Alabama; Nautilus is a citizen
of Arizona; and Moore is a citizen of Michigan. Because the AEA
is also a citizen of Alabama, the district court had jurisdiction only
if the AEA was properly dismissed from the case.
We review the denial of a motion to remand de novo. City
of Vestavia Hills v. Gen. Fid. Ins. Co., 676 F.3d 1310, 1313 (11th Cir.
2012). “When a plaintiff names a non-diverse defendant solely in
order to defeat federal diversity jurisdiction, the district court must
ignore the presence of the non-diverse defendant and deny any mo-
tion to remand the matter back to state court.” Henderson v. Wash.
Nat’l Ins. Co., 454 F.3d 1278, 1281 (11th Cir. 2006). In such circum-
stances, “[t]he plaintiff is said to have effectuated a ‘fraudulent join-
der,’ and a federal court may appropriately assert its removal diver-
sity jurisdiction over the case.” Id. (citation omitted).
A defendant can succeed on its claim that a co-defendant was
fraudulently joined by showing by clear and convincing evidence
that there is no possibility the plaintiff can state a cause of action
against the non-diverse defendant. Id. The fraudulent joinder de-
termination “must be based upon the plaintiff’s pleadings at the
time of removal, supplemented by any affidavits and deposition tran-
scripts submitted by the parties.” Le v. Wyeth, 428 F.3d 1317, 1322
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4 Opinion of the Court 22-12748
(11th Cir. 2005) (emphasis and citation omitted). “The proceeding
appropriate ‘for resolving a claim of fraudulent joinder is similar
to that used for ruling on a motion for summary judgment under
[Federal Rule of Civil Procedure] 56(b).’” Id. at 1322–23 (citation
omitted). Thus, “the district court must ‘resolve all questions of
fact . . . in favor of the plaintiff.’ But there must be some question
of fact before the district court can resolve that fact in the plaintiff’s
favor.” Id. at 1323 (omission in original) (citation omitted).
The AEA was not a proper party to the insurance-proceeds
garnishment action. Alabama Code § 27-23-2 provides that, after
obtaining a final judgment for loss caused by bodily injury, as here,
a “judgment creditor” like Bolden “may proceed against the de-
fendant”—here, Moore—“and the insurer”—Nautilus—“to reach
and apply the insurance money to the satisfaction of the judg-
ment.” Neither the statute nor case law supports a suit against a
third-party entity that is neither the insurer nor the insured.
The AEA was neither the defendant in the initial action nor
an insurer subject to an action under § 27-23-2. Nautilus submitted
a declaration explaining that the AEA is the “insured unit,” not an
insurer. The Certificate of Insurance lists Nautilus as the insurer
and the AEA as the “Participating Unit,” while it lists “All Unified
Members and All Student Members” as the “Insured.” Addition-
ally, the Certificate of Insurance defines “insured” to mean “[a] nat-
ural person who, at the time of . . . the alleged incidents, acts, or
events which give rise to a claim . . . was a member of the unit
named in the declarations page.”
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22-12748 Opinion of the Court 5
Based on the pleadings and affidavits, there is no reason to
believe that the AEA is an insurer under Alabama Code § 27-23-2.
Accordingly, Bolden does not have any plausible cause of action
against the AEA and the district court properly dismissed the AEA.
II
On, then, to the summary judgment decision. “We review
a district court’s grant of summary judgment de novo, viewing the
evidence and drawing all reasonable inferences in the light most
favorable to the nonmoving party.” Salinero v. Johnson & Johnson,
995 F.3d 959, 964 (11th Cir. 2021) (citation omitted).
“The law is clear that a judgment creditor’s right under § 27-
23-2 to proceed against the insurance company to satisfy a judg-
ment obtained against the defendant/insured is dependent upon
the rights of the insured against its insurer under the policy.” St.
Paul Fire & Marine Ins. Co. v. Nowlin, 542 So. 2d 1190, 1194 (Ala.
1988); see also Barton v. Nationwide Mut. Fire Ins. Co., 524 F. Supp. 3d
1219, 1228 (N.D. Ala. 2021) (“[R]ecovery under Section 27-23-2 is
circumscribed by the coverage limitations of the insured’s insur-
ance policy.”). Thus, in a § 27-23-2 action, the injured party “effec-
tively stands in the shoes of the insured tortfeasor[] . . . in making
h[er] claim, and [s]he is entitled to recover from [the insurer] only
to the extent of [the insured tortfeasor’s] coverage for the claims
asserted against them.” Admiral Ins. Co. v. Price-Williams, 129 So. 3d
991, 997 (Ala. 2013).
Under the terms of her insurance contract with Nautilus,
Moore was required to “cooperate with [Nautilus],” including by
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6 Opinion of the Court 22-12748
“attend[ing] hearings and trials” and “assist[ing] in effecting settle-
ments and obtaining the attendance of witnesses.”
There is no genuine dispute of material fact about Moore’s
lack of cooperation in the litigation against her. Moore failed to
appear for her scheduled deposition repeatedly and for a prolonged
period—despite four court orders and Nautilus’ offer to pay her
travel expenses. That Moore or her counsel participated in certain
aspects of the state court litigation is insufficient to create a genuine
dispute of material fact as to whether Moore failed to cooperate
with respect to her deposition—a key component of the litigation
which led to the entry of the default judgment. The state court
explained that Moore “ha[d] repeatedly failed and refused to appear
for deposition testimony in direct contempt of multiple Orders of
this Court, leaving the Court with no recourse other than to enter
a default judgment against her.”
Accordingly, Moore did not satisfy the terms of the insur-
ance policy and Nautilus does not owe coverage to Moore for the
judgment obtained by Bolden.
AFFIRMED.
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