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Thomas v. Chambers

United States District Court, E.D. Louisiana

October 24, 2018


         SECTION “R” (4)



         Before the Court are plaintiffs' motion to dismiss defendants' counterclaim and plaintiffs' motion for sanctions under Federal Rule of Civil Procedure 11.[1] Because defendants' counterclaim fails to state a claim for fraud under Louisiana law and the Federal Rules of Civil Procedure, the Court grants plaintiffs' motion to dismiss. The Court denies plaintiffs' motion for Rule 11 sanctions because plaintiffs have failed to comply with the rule's procedural requirements.

         I. BACKGROUND

         This case arises out of a motor vehicle accident in Orleans Parish.[2] On April 24, 2017, plaintiff Kierra Thomas was driving an automobile westbound on Interstate 10 in the right-hand lane with plaintiffs Antoine Clark and Shirley Harris as passengers.[3] Defendant Randall Chambers was allegedly driving a tractor-trailer next to plaintiffs in the middle lane.[4]Chambers was allegedly driving the tractor-trailer in the course of his employment with defendant God's Way Trucking, LLC.[5] Plaintiffs allege that Thomas was driving “straight in a cautious fashion” when Chambers negligently attempted to move into the right-hand lane without “keep[ing] a proper lookout.”[6] Chambers' vehicle allegedly struck plaintiffs' vehicle, causing all three plaintiffs to be “violently jolted.”[7] All three plaintiffs allege that the accident caused serious injuries to their necks and backs, and that their injuries require continuing medical care and treatment.[8]

         On April 6, 2018, plaintiffs filed suit against Chambers, God's Way Trucking, and defendant Canal Insurance Company.[9] Canal Insurance allegedly insured the vehicle Chambers drove on the day of the collision.[10]Plaintiffs allege that Chambers' negligence caused their injuries, and that God's Way Trucking is liable for their damages as Chambers' employer under the doctrine of respondent superior.[11] Plaintiffs also allege causes of action for negligent entrustment and negligent hiring against God's Way Trucking.[12] Defendants removed the action to federal court on April 27, 2018, asserting diversity jurisdiction pursuant to 28 U.S.C. § 1332.[13]

         On July 3, 2018, defendants filed a counterclaim against plaintiffs.[14] In the counterclaim defendants allege that plaintiffs intentionally caused the collision and that plaintiffs suffered no injuries as a result of the accident.[15]Defendants assert that plaintiffs' petition for damages constitutes a fraudulent misrepresentation under Louisiana law.[16] Defendants further assert that as a result of plaintiffs' alleged misrepresentations, they have suffered damages to be shown at trial, including attorneys' fees and litigation expenses.[17] On July 11, 2018, plaintiffs filed a motion to dismiss defendants' counterclaim and a motion for sanctions under Federal Rule of Civil Procedure 11.[18] Plaintiffs allege that Rule 11 sanctions are warranted because defendants' counterclaim is frivolous.[19] Defendants oppose both motions.[20]


         Plaintiffs' motion to dismiss defendants' counterclaim is brought under Federal Rule of Civil Procedure 12(b)(6). To survive a Rule 12(b)(6) motion, a party must plead “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) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is facially plausible when the party pleads facts that allow the court to “draw the reasonable inference that the [opposing party] is liable for the misconduct alleged.” Id. at 678. A court must accept all well-pleaded facts as true and must draw all reasonable inferences in favor of the nonmoving party. See Lormand v. U.S. Unwired, Inc., 565 F.3d 228, 232 (5th Cir. 2009).

         A legally sufficient complaint or counterclaim must establish more than a “sheer possibility” that the party's claim is true. Iqbal, 556 U.S. at 678. It need not contain detailed factual allegations, but it must go beyond labels, legal conclusions, or formulaic recitations of the elements of a cause of action. Id. In other words, the face of the complaint or counterclaim must contain enough factual matter to raise a reasonable expectation that discovery will reveal relevant evidence of each element of the party's claim. Lormand, 565 F.3d at 257. The claim must be dismissed if there are insufficient factual allegations to raise a right to relief above the speculative level, Twombly, 550 U.S. at 555, or if it is apparent from the face of the complaint or counterclaim that there is an insuperable bar to relief, Jones v. Bock, 549 U.S. 199, 215 (2007).


         A. Motion to Dismiss

         Defendants' counterclaim asserts a claim for fraud, which Louisiana law defines as “a misrepresentation or a suppression of the truth made with the intention either to obtain an unjust advantage for one party or to cause a loss or inconvenience to the other.” La. Civ. Code art. 1953. The elements of a Louisiana fraud and intentional misrepresentation claim are: 1) a misrepresentation of a material fact; 2) made with intent to deceive; and 3) causing justifiable reliance with resultant injury. Kadlec Med. Ctr. v. Lakeview Anesthesia Assoc., 527 F.3d 412, 418 (5th Cir. 2008).

         Defendants' fraud claim is subject to the heightened pleading requirement in Federal Rule of Civil Procedure 9(b). Dorsey v. Portfolio Equities, Inc., 540 F.3d 333, 339 (5th Cir. 2008). Under Rule 9(b), a party “must state with particularity the circumstances constituting fraud or mistake.” Fed.R.Civ.P. 9(b). The Fifth Circuit “interprets Rule 9(b) strictly, requiring the [complaining party] to specify the statements contended to be fraudulent, identify the speaker, state when and where the statements were made, and explain why the statements were fraudulent.” Flaherty & Crumrine Preferred Income Fund, Inc. v. TXU Corp., 565 F.3d 200, 207 (5th Cir. 2009). In other words, “Rule 9(b) requires ‘the who, what, when, where, and how' to be laid out.” Benchmark Elecs., Inc. v. J.M. Huber Corp., 343 F.3d 719, 723 (5th Cir. 2003) (quoting Tel-Phonic Servs., Inc. v. TBS Int'l, Inc., 975 F.2d 1134, 1139 (5th Cir. 1992)). Finally, “although scienter may be ‘averred generally,' . . . pleading scienter requires more than a simple allegation that a [party] had fraudulent intent. To plead scienter adequately, a [complaining party] must set forth specific facts that support an inference of fraud.” Tuchman v. DSC Commc'ns Corp., 14 F.3d 1061, 1068 (5th Cir. 1994) (quoting Fed.R.Civ.P. 9(b)).

         Here, defendants have failed to satisfy even the less stringent Rule 12(b)(6) pleading standard because they do not allege that they justifiably relied on plaintiffs' alleged misrepresentations. See Iqbal, 556 U.S. at 678. Defendants do not allege any facts in their counterclaim addressing this element. Defendants contend in their opposition that plaintiffs' alleged misrepresentations were “used to deceive” them into “defend[ing] a meritless claim . . . in justifiable reliance.”[21] But the Court cannot consider this allegation in defendants' opposition when adjudicating plaintiffs' motion to dismiss. See Estes v. JP Morgan Chase Bank, Nat'l Ass'n, 613 Fed.Appx. 277, 280 (5th Cir. 2015) (district court did not err when refusing to consider new factual allegations in party's opposition, because “when deciding a Rule 12(b)(6) motion, a district court generally must limit itself to the contents of ...

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