LIBERTY MUTUAL FIRE INSURANCE COMPANY, as subrogee of Chickasaw County School District, Plaintiff - Appellee
FOWLKES PLUMBING, L.L.C.; SULLIVAN ENTERPRISES, INCORPORATED; QUALITY HEAT; AIR, INCORPORATED, Defendants - Appellants
from the United States District Court for the Northern
District of Mississippi
HIGGINBOTHAM, JONES, and COSTA, Circuit Judges.
allowed this interlocutory appeal that asks how the Supreme
Court of Mississippi would interpret the subrogation waiver
in a common form contracting agreement. The question has
split courts nationwide. Because of the closeness and
importance of this question, we certify again, this time to
the state supreme court so that it can answer the difficult
question for itself.
insurance dispute resulted from a fire that destroyed a
small-town school. Chickasaw County School District needed to
restore the windows at one of its schools over the summer
break, so its school board entered into a contract with
Sullivan Enterprises. The agreement was memorialized in the
board's minutes as follows:
Motion to accept the bid from Sullivan Enterprises, Inc. for
the 1935 Window Restoration Project based on Mr. Hood
reviewing the bid documents, reviewing the contracts, and
checking the credentials of the company was made by Mr.
Collums and seconded by Ms. Butler. Four approved, and one
abstained. . . . The motion passed.
the work on the windows, a fire broke out that destroyed the
entire school. The school district had previously obtained a
Liberty Mutual insurance policy that covered fire damage.
Liberty Mutual paid $4.3 million after the fire.
Mutual then brought a subrogation claim against Sullivan and
two subcontractors claiming that they negligently caused the
fire. The district court bifurcated the case, so that it
could first determine whether there was a waiver of
subrogation in the contract between the school district and
Sullivan, and only then (if still relevant) determine who was
at fault for the fire. This stage of the case is only about
the subrogation waiver.
subrogation controversy centers around the meaning of
American Institute of Architects Document A201-2007, a
widely-used form contract that was part of the district's
contracting agreement with Sullivan. The key provision is section
11.3.7; the district court correctly noted that a deep
division exists about how to interpret this provision's
subrogation waiver. It opted for the minority view and then
certified an interlocutory appeal, which we accepted.
we can interpret the waiver language-or ask the state supreme
court to do so-we must determine whether a valid contract
even existed between the school board and Sullivan. If not,
interpreting A201-2007 would be a moot point. Though the two
sides signed an agreement, there is some question regarding
its validity. Mississippi strictly enforces a rule that
public boards can only speak through their minutes. KPMG,
LLP v. Singing River Health Sys., ___So. 3d___, 2018 WL
5291088, *5 (Miss. 2018); Wellness, Inc. v. Pearl River Cty.
Hosp., 178 So.3d 1287, 1290-91 (Miss. 2015);
Thompson v. Jones Cty. Cmty. Hosp., 352 So.2d 795,
796 (Miss. 1977). The minutes must contain enough of the
contract for the court to evaluate its terms.
Wellness, 178 So.3d at 1291. The onerous duty falls
on the contracting party-not the school board-to make sure
the contract is in the minutes. Id. at 1293.
school board minutes may fall far short of this requirement.
They cite no contractual provisions, only reciting that a bid
was accepted. But we do not have to decide the minutes
question as Liberty Mutual forfeited this claim by not
advancing it in the district court. See Shell Offshore,
Inc. v. Tesla Offshore, L.L.C., 905 F.3d 915, 920 n.3
(5th Cir. 2018). The closest Liberty Mutual came to arguing
contractual invalidity was in its opposition to summary
judgment, when it discussed the school board's
requirement to approve the project and then questioned
whether A201-2007 was part of the contract that the school
board approved. But that discussion never mentions the
minutes rule or ...