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Winbourne v. Wilshire Insurance Co.

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

November 2, 2018





         Before the undersigned Magistrate Judge, on reference from the District Court, is a motion to dismiss pursuant to Rule 12(b)(6), filed by Defendant M.J. Kelly of Arkansas, Inc. (“MJ Kelly”). [doc. # 9]. The motion is unopposed. For reasons set forth below, it is recommended that the motion be GRANTED.


         On July 18, 2018, Plaintiffs Terence Winbourne and David Carroll, d/b/a the Daiquiri Shack[1] (“Plaintiffs”) filed a “Petition for Amount Due Under Contract of Insurance, Penalties, and Attorney's Fees” in the 6th Judicial District Court, Parish of Tensas, State of Louisiana, against Defendants Wilshire Insurance Company (“Wilshire”) and MJ Kelly. (Petition, [doc. # 1-2]). Plaintiffs claim that, pursuant to La. R.S. 22:658 and La. R.S. 22:1220, [2] they are entitled to a sum due under their insurance policy to cover the costs related to the destruction of their commercial building, which defendants have refused to pay. (Id.)

         Specifically, Plaintiffs claim that the defendants issued to them a policy of insurance, no. CP00200045, which purports to cover losses of commercial buildings and contents. Plaintiffs claim this policy was in full force on July 19, 2017, at which time a fire completely destroyed Plaintiffs' commercial building and contents therein. Plaintiffs claim they have performed all acts that defendants have required, and defendants are now indebted to Plaintiffs in the full amount of the policy, $600, 000. (Id. ¶¶ 2-4).

         On September 7, 2018, the defendants removed this case to federal court on the basis of diversity jurisdiction, 28 U.S.C. § 1332. (See Notice of Removal, [doc. # 1]). On September 14, 2018, MJ Kelly filed the instant motion pursuant to Fed.R.Civ.P. 12(b)(6) to dismiss Plaintiff's claims against MJ Kelly. [doc. # 9]. Plaintiffs did not file a response. This matter is now ripe.

         Standard of Review

         Federal Rule of Civil 12(b)(6) sanctions dismissal when plaintiff fails “to state a claim upon which relief can be granted.” A pleading states a claim for relief when, inter alia, it contains “a short and plain statement . . . showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). “To survive a motion to dismiss, 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) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is facially plausible when it contains sufficient “factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. Plausibility requires more than just the “sheer possibility” that a defendant acted unlawfully, id.; it calls for enough facts “to raise a reasonable expectation that discovery will reveal evidence” to support the elements of the claim. Twombly, 550 U.S. at 556. Mere “labels and conclusions” or “a formulaic recitation of the elements of a cause of action” do not suffice. Id. at 555.

         In evaluating the sufficiency of a complaint, a court must accept as true all factual allegations in the complaint, although the same presumption does not extend to legal conclusions. See Iqbal, 556 U.S. at 678. A court may permit a well-pleaded complaint to proceed even when “actual proof of those facts is improbable” or recovery is unlikely. Twombly, 550 U.S. at 556. But a court will dismiss a complaint “where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct.” Iqbal, 556 U.S. at 679.


         MJ Kelly argues that Plaintiffs' claims “fail as a matter of law because MJ Kelly is not the insurer of the subject policy, ” and the “statutes under which Plaintiffs seek to recover contemplate recovery only as against an insurer, not an insurance producer such as MJ Kelly.” (Memorandum in Support at 2, [doc. # 9-1]). MJ Kelly claims that Plaintiffs do not allege any “specific conduct engaged in by MJ Kelly” or “assert that MJ Kelly was a party to the subject Policy or had a duty to pay claims under the Policy, ” and Plaintiffs “have not, and cannot, plead any basis for liability independent of the insurance contract.” (Id. at 3, 5). MJ Kelly also notes that throughout its Petition, Plaintiffs refer to Wilshire and MJ Kelly collectively as “defendant” without differentiating between the two entities, even though MJ Kelly acted as the wholesale insurance producer[3] in connection with the placement of the insurance policy, while Wilshire is the insurer under the policy. (Id. at 2). In support of its motion, MJ Kelly submits Plaintiffs' commercial insurance policy, issued by Wilshire. (Ex. A, [doc. # 9-2]).

         Under Louisiana law, an “insurance policy is a contract and establishes the law between the parties.” Williams v. Synergy Care, Inc., No. CIV.A. 07-0137, 2008 WL 2945918, at *3 (W.D. La. July 29, 2008); see Pareti v. Sentry Indem. Co., 536 So.2d 417, 420 (La. 1988). If the language of the policy is clear and expresses the intent of the parties, then the policy should be enforced as written. Williams, 2008 WL 2945918, at *3. An ambiguity in the policy is interpreted against the insurer and in favor of the insured. Id. “Courts lack the authority to vary the terms of a policy under the guise of contractual interpretation when the policy provisions are framed in clear and unambiguous language.” Id.

         The policy at issue unambiguously states that “TERENCE WINBORNE & DAVID STEVE CARROLL[, ] DBA: THE DAIQUIRI SHACK” is the insured, “M J Kelly of Arkansas” is the agency, and Wilshire issued the policy. Plaintiffs' only claims against the defendants are for breach of the insurance contract. MJ Kelly is not named as an insurer under the policy, and Plaintiffs have not alleged that MJ Kelly, as the agent, is a party to the contract or that Plaintiffs have any contractual rights that ...

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