United States District Court, E.D. Louisiana
USAA GENERAL INDEMNITY COMPANY INDIVIDUALLY AND AS SUBROGEE OF TERRENCE R. SCOTT
LIGHTHOUSE PROPERTY INSURANCE CORPORATION
ORDER AND REASONS
D. ENGELHARDT UNITED STATES DISTRICT JUDGE.
before the Court is a Motion to Dismiss pursuant to the
Federal Rules of Civil Procedure 12(b)(6) and 12(b)(7), and,
in the alternative, Motion for Summary Judgment filed by
defendant, Lighthouse Property Insurance Corporation
(“Lighthouse”). (Rec. Doc. 10). The Motion is
opposed by the plaintiff, USAA General Indemnity Company,
individually and as subrogee of Terrence Scott
(“USAA”). (Rec. Doc. 13). Lighthouse filed a
reply to USAA's opposition to the Motion to Dismiss.
(Rec. Doc. 18).
carefully considered the parties' submissions and the
applicable law, IT IS ORDERED that
Lighthouse's Motion to Dismiss and Motion for Summary
Judgment (Rec. Doc. 10) are DENIED for the
reasons stated herein.
IS FURTHER ORDERED that any party opposed to this
Court entering a stay in the captioned matter, pending the
resolution of Scott v. Lighthouse Prop. Ins. Corp.,
Civil Action No. 17-1376, filed in the Civil District Court
for the Parish of Orleans, must Show Cause in
writing on or before September 27, 2017, why
this Court should not stay the instant proceedings.
about February 20, 2015, Terrence R. Scott's
(“Scott”) property at 1809 Stall Drive, Harvey,
Louisiana sustained damage as the result of a fire. (Rec.
Doc. 1 at p. 3). At the time of the fire, the damaged
property was allegedly covered by two homeowner's
insurance policies: one issued by USAA (Policy No.
29656996) and another issued by
Lighthouse. (See Rec. Doc. 1 at p. 2-3). Both
policies contained “equivalent Other Insurance
clauses.” (Rec. Doc. 1 at p. 3). The USAA policy
provided: “If a loss covered by this policy…is
also covered by other insurance, we will pay only the
proportion of the loss that the amount of insurance that
applies under this policy bears to the total amount of
insurance covering the loss.” (Id.) Similarly,
the Lighthouse policy allegedly reads: “If a loss
covered by this policy is also covered by: Other insurance,
we will pay only the proportion of the loss that the limit of
liability that applies under this policy bears to the total
amount of insurance.” (Id.).
dispute arose between Scott and USAA regarding Scott's
first-party insurance claim with USAA. (Id. at p.
4). Subsequently, USAA filed a Declaratory Action to resolve
coverage issues.(Id.). Both USAA and Scott filed
Third-Party Demands against Lighthouse. (Id.). This
Court dismissed with prejudice USAA's Third Party Demand
against Lighthouse, reasoning that USAA was precluded from
bringing third-party claims against Lighthouse for breach of
contract and bad faith because there was no contractual
relationship between the two insurers. (Id.).
Thereafter, Scott dismissed his claims against Lighthouse.
(Id.). USAA and Scott reached a settlement agreement
wherein USAA tendered Scott a check on or about March 13,
2017 in the amount of $500, 000 as “full and final
settlement of all claims, causes of action and losses,
including dwelling, personal property and loss of use
damages, arising from the fire.” (Id.). Scott
filed suits against USAA and Lighthouse in the Civil District
Court for the Parish of Orleans on February 10, 2017.
(See Rec. Doc. 10-1 at p. 2-3). Scott then appealed
this Court's Order enforcing the aforementioned
settlement, which was dismissed for want of prosecution on
May 10, 2017. (Rec. Doc. 13 at p. 3).
USAA filed a Complaint against Lighthouse on April 24, 2017
claiming that it is conventionally and legally subrogated to
the rights of its insured by virtue of its indemnity payment
to Scott. (Rec. Doc. 1 at p. 4). In its Complaint, USAA seeks
reimbursement, contribution, and/or indemnity from Lighthouse
for its pro-rated share of the total loss based on two
claims.(See Id. at p. 5-6). First, USAA
alleges that by virtue of its indemnity payment, it is now
conventionally subrogated to the rights and causes of action
of its insured, namely a breach of contract claim.
(Id. at p. 4-5). USAA claims that Lighthouse
materially breached its contract with USAA's subrogor,
Scott, when it did not perform its obligations to pay its
pro-rated share of the adjusted loss to Scott's property
as provided for in the Lighthouse policy. (Id. at p.
5). USAA's second claim-labeled “Equitable
Subrogation/Contribution”-demands that Lighthouse pay a
pro-rated share of the loss [500, 000 paid to Scott] based on
Lighthouse Policy's “Other Insurance” clause
and USAA being legally subrogated to the rights of its
insured having satisfied the entire debt owed by Lighthouse
and USAA to their insured. (Id. at p. 6).
Lighthouse moves to dismiss USAA's Complaint pursuant to
Fed.R.Civ.P. 12(b)(6) and 12(b)(7), or in the alternative,
seeks summary judgment pursuant to Fed.R.Civ.P. 56, on the
grounds that the Complaint fails to allege sufficient facts
to show that USAA is entitled to recovery by way of
conventional or legal subrogation or otherwise and for
failure to join a necessary party, namely Scott, the
basis of its Motion to Dismiss, Lighthouse presents the
following arguments. (Rec. Doc. 10). First, Lighthouse
contends that this Court has already determined that USAA has
no standing or right of action to recover from Lighthouse.
(Rec. Doc. 10-1 at p. 6). Thus, Lighthouse argues that claims
against it relative to the loss are precluded by res judicata
because they have already been determined by this Court.
(Id.). Second, Lighthouse alleges that USAA failed
to plead facts sufficient to support a breach of contract
cause of action because it failed to identify the requisite
express agreement required for conventional subrogation.
(Id. at p. 7). Third, Lighthouse alleges that the
common-law doctrine of equitable subrogation does not exist
in Louisiana and that USAA did not plead sufficient facts to
sustain a cause of action under legal subrogation.
(Id. at p. 8). Fourth, Lighthouse argues that USAA
has no rights against Lighthouse through subrogation unless
and until it has actually made payment on the debt at issue.
(Id. at p. 10). Alternatively, Lighthouse moves for
summary judgment in the absence of evidence that Scott has
received payment from USAA. (Id.). Finally,
Lighthouse moves for dismissal for failure to join Scott, a
required and indispensable party. (See Id. at p.
LAW AND ANALYSIS
Motion to Dismiss Under Rule 12(b)(6)
of the Federal Rules of Civil Procedure requires that a
complaint provide a “short and plain statement of the
claim showing that the pleader is entitled to relief.”
Fed.R.Civ.P. 8(a)(2). To survive a motion to dismiss pursuant
to Rule 12(b)(6), “a complaint must contain sufficient
factual matter, accepted as true, to ‘state a claim to
relief that is plausible on its face.'”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)
(internal citation omitted). Facial plausibility exists
“when the plaintiff pleads factual content that allows
the court to draw the reasonable inference that the defendant
is liable for the misconduct alleged.” Id.
“The plausibility standard is not akin to a
‘probability requirement, ' but it asks for more
than a sheer possibility that a defendant has acted
unlawfully.” Id. Factual allegations that are
"merely consistent with a defendant's liability,
stop short of the line between possibility and plausibility
of entitlement to relief, " and thus are inadequate.
Id. (internal quotations omitted). Rather, a
complaint's allegations “must make relief
plausible, not merely conceivable, when taken as true.”
United States ex rel. Grubbs v. Kanneganti, 565 F.3d
180, 186 (5th Cir. 2009).
whether a complaint states a plausible claim for
relief…[is] a context-specific task that requires the
reviewing court to draw on its judicial experience and common
sense.” Iqbal, 556 U.S. at 679 (internal
citations omitted); see also Robbins v. Oklahoma,
519 F.3d 1242, 1248 (10th Cir. 2008) (degree of required
specificity depends on context, i.e., the type of claim at
issue). In evaluating a Rule 12(b)(6) motion, the Court is
bound to “accept all well-pleaded facts as true, and .
. . view them in the light most favorable to the
plaintiff.” Campbell v. Wells Fargo Bank,
N.A., 781 F.2d 440, 442 (5th Cir. 1986). Further,
“[a]ll questions of fact and any ambiguities in the
controlling substantive law must be resolved in the
plaintiff's favor.” Lewis v. Fresne, ...