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Theriot v. State Farm Mutual Automobile Insurance Co.

United States District Court, W.D. Louisiana, Lafayette Division

April 4, 2018

Theriot
v.
State Farm Mutual Automobile Insurance Company et al

          REPORT AND RECOMMENDATION

          CAROL B. WHITEHURST UNITED STATES MAGISTRATE JUDGE.

         Before the Court is a Rule 12(b) Motion To Dismiss filed by State Farm Mutual Automobile Insurance Company, State Farm Life Insurance Company, State Farm Fire and Casualty Company and State Farm General Insurance Company (“State Farm”) [Rec. Doc. 8], Plaintiff Kathryn[1] H. Theriot's Memorandum in Opposition [Rec. Doc. 15] and State Farm's Reply [Rec. Doc. 20]. For the following reasons, the undersigned recommends that the Motion to Dismiss [Rec. Doc. 8] be denied.

         I. Factual and Procedural Background

         Plaintiff, Katheryn Theriot (“Theriot”), is the surviving spouse of John Patrick Theriot (“Pat Theriot”), who prior to his death was a State Farm insurance agent in St. Martinville, Louisiana for many years. R. 1-1, ¶ 2. Pat Theriot entered into an Agent's Agreement with State Farm in 1994 (“Agent's Agreement”). Section IV of the Agent's Agreement provided for sixty (60) monthly termination payments to start when it was terminated (“initial termination payments”). Under Section V, extended termination payments would begin on the 61st month after termination of the Agent's Agreement and would continue until the month of the decedent's death. A joint and survivor option could replace the applicable terms for entitlement to these extended termination payments by amendment prior to the agent's death. R. 1-1, ¶¶ 2, 3; Succession of Theriot, 221 So.3d 862, 864 (La.App. 3 Cir., 2017). The actual amount of the termination payments owed by State Farm cannot be determined until the Agent's Agreement is terminated and the final figures become available to State Farm. R. 15, Exh. 1.

         On August 28, 2013, Pat Theriot and representatives of State Farm met and entered into several contracts which amended the Agent's Agreement, including the following: (1) Termination Payment Amendment; (2) Extended Termination Payment Amendment; (3) Irrevocable Assignment of Extended Termination Payments; and (4) Election to Receive Extended Termination Payments Under the Joint and 66-2/3% to Survivor Option. R. 1-1, ¶ 4, R. 15, Exh. 2. The contracts specifically named Theriot as Pat Theriot's assignee and beneficiary for the termination payments. R. 1-1, ¶ 4.

         Pat Theriot died on September 6, 2013. At that time, the Agent's Agreement terminated and State Farm became obligated to pay termination payments to Theriot pursuant to the Election To Receive Extended Termination Payments Under the Joint And 66-2/3% To Survivor Option. Id. at ¶ 5, R. 15-1, Exh.2. On November 19, 2013, State Farm sent correspondence to Theriot confirming that it owed termination payments directly to her as Pat Theriot's beneficiary under the direct assignment contracts executed by Pat Theriot and State Farm prior to Pat Theriot's death. The correspondence stated:

This letter is to confirm that you are set to receive Termination Payments for 5 years in the estimated amount of $13, 935. You are also set to receive Extended Termination Payments starting the 6th year and paid to you until your death in the estimated amount of $5, 969.
These payments are paid from Pat Theriot's agent's agreement with State Farm.

R. 1-1, ¶ 6, R. 15-1, Exh. 3. In November of 2013, State Farm made one termination payment to Theriot. Id. at ¶ 12. Thereafter, State Farm refused to pay additional termination payments to Theriot. R. 1-1, ¶ 6.

         Pat Theriot's succession proceeding to probate his Last Will and Testament was opened in the 16th Judicial District for the Parish of St. Martin, State of Louisiana (hereafter “state district court”). R. 1-1, ¶¶ 5, 9. Within the succession proceeding, the Theriot Trust, composed of Pat Theriot's five children, asserted that it was entitled to receive the termination payments under the Will; the Executor and Theriot disputed the Theriot Trust's claim. 1-1, ¶ 8. State Farm then filed a Petition in Intervention for concursus within the succession proceeding. State Farm made the following admission in its Petition In Concursus:

10. State Farm acknowledges that termination payments are due to be paid for sixty months following Pat Theriot's death pursuant to an Agent's Agreement signed by Pat Theriot prior to his death
11. Pursuant to a promise of indemnification, State Farm made one termination payment to Kathy Theriot on or about the first of November 2013 in the amount of $15, 078.67.

         Theriot submits in her opposition and the record confirms that State Farm took no steps to have the concursus decided-it did not deposit any termination payments into the registry of the court and did not seek an adjudication of competing claims. The concursus was abandoned by State Farm after the trial court in the succession proceeding rendered its judgment. R. 15, pp. 9-10. In its opinion, the Third Circuit found that the concursus was “moot.” Succession of Theriot, 221 So.3d 221 So.3d 862, 875 (La.App. 3 Cir. 5/17/2017).

         Theriot filed an Intervention into the succession proceedings seeking a judgment rejecting all competing claims to the termination payments and an award of those payments to her. R. 15-5. The trial court held that the initial termination payments were owed to the Theriot Trust under Pat Theriot's Will. The trial court also held that extended termination payments were not owed to anyone. Theriot, the Executor and State Farm all filed appeals from the judgment.

         On May 17, 2017, the Louisiana Third Circuit resolved the dispute in the succession proceeding by reversing the state district court's judgment in favor of the Theriot Trust and rendering judgment in favor of Theriot. R. 1-1, ¶¶ 8, 9, 10; Succession of Theriot, 221 So.3d at 865. The court stated,

We render judgment declaring that the proper recipient of those initial payments is Kathryn Hempel Theriot... We render judgment holding that those extended termination payments are owed to Kathryn Hempel Theriot.

         Also, the Third Circuit held that the concursus was moot and that State Farm was not entitled to any of the benefits of a properly conducted concursus procedure. Id. at 875. Theriot's petition acknowledges that on October 10, 2017, and on October 31, 2017, more than four (4) years after the Termination Payments became due and payable, State Farm made respective payments of $650, 000.00 and $24, 846.11 to her. R. 1-1, ¶¶ 18, 19. Theriot made amicable demand upon State Farm for an accounting of the actual amount of the Termination Payments which State Farm owed to her, using the accounting data which in the possession of State Farm. State Farm refused such an accounting and further refused to provide any data from which the actual amount of the presently owed Termination Payments could be calculated. Id. at ¶ 20.

         In her Complaint, Theriot prays for Judgment including: (1) Full accounting of all Termination Payment owed under the Agent's Agreement from September 6, 2013 through the present date and into the future; (2) Full disclosure of all underlying data used in the calculation of Termination Payments owed to Theriot; (3) All damages incurred by Theriot due to State Farm's bad faith breach of its obligations under the Agent's Agreement, including damages for delay, legal interest on all amounts due, all attorney fees and expenses incurred in the probate proceedings, mental anguish and inconvenience, and loss of necessary funds owed; (4) All additional Termination Payments owed as determined by a complete accounting; (5) A full accounting and disclosure of all unjust enrichment and investment income realized by State Farm due to the bad faith retention and investment of the Termination Payments; (6) An award to Theriot disgorging all unjust enrichment realized by State Farm by its retention of the Termination Payments; (7) Damages caused by State Farm's fraud by concealment and refusal to disclose the amount of Termination Payments due or owed and how they are calculated as well as all attorney fees, expenses and costs incurred in the present lawsuit; (8) For all costs of these proceedings and legal interest on all amounts owed; and (9) For all general and equitable relief, etc. R. 1-1.

         II. The Succession Proceedings

         State Farm submits that the Court should take judicial notice of the following information from the prior succession proceeding, Succession of Theriot, Docket No. 15421, 16th Judicial District Court, St. Martin Parish, Louisiana and the subsequent appeal in that case. State Farm asserts these documents are salient to the instant motion. “A judicially noticed fact must be one not subject to reasonable dispute in that it is either (1) generally known within the territorial jurisdiction of the trial court or (2) capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned.” Fed.R.Evid. 201(b). When reviewing a motion to dismiss, a district court “must consider the complaint in its entirety, as well as other sources courts ordinarily examine when ruling on Rule 12(b)(6) motions to dismiss, in particular, documents incorporated into the complaint by reference, and matters of which a court may take judicial notice.” Funk v. Stryker Corp., 631 F.3d 777, 783 (5th Cir. 2011) (quoting Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322, (2007)). The Court will take judicial notice of the following documents which are located in the record and are not subject to dispute:

1. On September 12, 2013, letters testamentary were issued in relation to the appointment of Allan Durand as Executor of the Succession of John Patrick Theriot, R. 8, Exh. A;
2. On November 22, 2013, the Executor filed a petition for possession to place Theriot in possession of the Termination Payments, Succession of Theriot, 221 So.3d at 865, Exh. B;
3. Pat Theriot's “other heir” that made a claim to the Termination Payments was a testamentary trust (“Theriot Trust”), established in favor of Pat Theriot's children; the Theriot Trust responded to the Executor's petition for possession with a dispute as to ...

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