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Richard v. USAA Casualty Insurance Co.

United States District Court, M.D. Louisiana

January 22, 2018




         Before the Court is the Motion to Dismiss (Doc. 4) filed by Defendant Garrison Property and Casualty Insurance Company (“Garrison:”) on behalf of “incorrectly named USAA Casualty Insurance Company.” Oral argument is not necessary. For the reasons that follow, the motion to dismiss is GRANTED IN PART and DENIED IN PART.

         I. BACKGROUND

         On May 16, 2012, Plaintiff Brian Ross Richard was riding as a passenger in a car driven by Plaintiff Lance Boudreaux. (Doc. 1-2 at ¶ 2). As Boudreaux attempted to execute a left-hand turn in his car, another vehicle struck Richard and Boudreaux's vehicle. (Id. at ¶ 2). Richard suffered severe injuries. (Id. at ¶ 2).

         The present cause of action relates to an earlier state court lawsuit over the automobile accident. (See Id. at ¶¶ 3-5). In that action, Richard filed suit against Boudreaux and his insurer. (Id. at ¶ 3). Boudreaux's insurance limit was $100, 000, and Plaintiffs allege that Richard offered to settle those claims against the insurer and Boudreaux within the policy limit but that the insurer refused. (Id.). Richard received a judgment of over $500, 000, well in excess of Boudreaux's policy limit. (Id. at ¶¶ 3, 5). The insurer appealed the verdict against itself but not against Boudreaux, the insured. (Id. at 4).

         After that judgment, Richard and Boudreaux entered into a settlement whereby Boudreaux would assign Richard any potential actions against the insurer, in exchange for Richard not pursuing Boudreaux for any amount in excess of his $100, 000 policy with the insurer. (Doc. 4 at ¶ 5). In the settlement, Boudreaux also waived any right of appeal he had in connection with the $500, 000 judgment against him. (Id.).

         The present action was filed in Louisiana State Court by Richard and Boudreaux, claiming that the insurer violated Boudreaux's rights as a policyholder by (1) not settling the claim to protect Boudreaux from an excess judgment and (2) not appealing the judgment with respect to Boudreaux. (Doc. 1-2 at ¶¶ 3-5). The insurer named in the suit was USAA Casualty Insurance Company (“USAA CIC”). (Id. at ¶ 1). Garrison Property and Casualty Insurance Company (“Garrison”) filed a timely notice of removal claiming that it was Boudreaux's actual insurer. (Doc. 1 at p. 1). In Garrison's Corporate Disclosure Statement (Doc. 7), it clarified that it is a Texas corporation that is a wholly owned subsidiary of USAA CIC, also a Texas corporation (id. at p. 1).[1]

         Plaintiffs bring claims for violation of La. Rev. Stat. §§ 22:1973 and 22:1892 and for breach of contract for failure to appeal. (Doc. 1-2 at ¶ 5). They argue that under Louisiana Law, Boudreaux's insurer was obligated to protect him from excess judgment and under his insurance contract, was obligated to defend him on appeal. (Id. at ¶¶ 4-5).


         A. Standing

         Under Federal Rule of Civil Procedure 12(b)(1), a claim is “‘properly dismissed for lack of subject-matter jurisdiction when the court lacks the statutory or constitutional power to adjudicate' the claim.” In re FEMA Trailer Formaldehyde Prods. Liab. Litig., 668 F.3d 281, 286 (5th Cir. 2012) (quoting Home Builders Ass'n v. City of Madison, 143 F.3d 1006, 1010 (5th Cir. 1998)). In order to “prevent[] a court without jurisdiction from prematurely dismissing a case with prejudice, ” a court should consider a Rule 12(b)(1) motion for lack of subject-matter jurisdiction before addressing any motions that concern the merits of a case. Id. at 286-87 (citing Ramming v. United States, 281 F.3d 158, 161 (5th Cir. 2001)). A motion to dismiss under Rule 12(b)(1) is analyzed under the same standard as a motion to dismiss under Rule 12(b)(6). Benton v. United States, 960 F.2d 19, 21 (5th Cir. 1992).

         “If a defendant makes a ‘factual attack' upon the court's subject matter jurisdiction over the lawsuit, the defendant submits affidavits, testimony, or other evidentiary materials.” Paterson v. Weinberger, 644 F.2d 521, 523 (5th Cir. 1981). The plaintiff must then prove that subject-matter jurisdiction exists by a preponderance of the evidence by “submitting facts through some evidentiary method.” Irwin v. Veterans Admin., 874 F.2d 1092, 1096 (5th Cir. 1989), aff'd sub nom. Irwin v. Dep't of Veterans Affairs, 498 U.S. 89 (1990) (quoting Paterson, 644 F.2d at 531).

         B. Failure to State a Claim

         When reviewing a motion to dismiss, the Court must “accept[] all well-pleaded facts as true and view[] those facts in the light most favorable to the plaintiff.” Hines v. Alldredge, 783 F.3d 197, 200-01 (5th Cir. 2015) (quoting True v. Robles, 571 F.3d 412, 417 (5th Cir. 2009)). Even so, a complaint must be “plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). “Determining 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.” Id. at 679. Although the complaint need not set out “detailed factual allegations, ” it must set forth something “more than labels and conclusions, and a formulaic recitation of the elements of a cause of action.” Twombly, 550 U.S. at 555. On a Rule 12(b)(6) motion, the Court may consider the pleadings, ...

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