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Mann v. Alston Contractors, Inc.

United States District Court, E.D. Louisiana

February 28, 2019


         SECTION: "S" (3)



         IT IS HEREBY ORDERED that the Motion for Partial Dismissal for Failure to State a Claim (Rec. Doc. 13), filed by defendants Alston Contractors, Inc., Kenneth D. Ross, and Robert Ingram Prichard, IV, and in which defendant Companion Specialty Insurance Company joins (Rec. Doc. 14), is GRANTED IN PART and DENIED IN PART, and plaintiffs' claims for rescission and breach of contract are dismissed, for the reasons more fully set forth below.


         Plaintiffs are New Orleans homeowners who received federal funds to elevate their homes in the wake of Katrina under a Hazard Mitigation Grant Program funded by the Federal Emergency Management Agency ("FEMA"). Defendant Alston Contractors, Inc. ("Alston") entered into a joint venture with a Louisiana contractor, Tim Clark Construction, LLC ("TCC"), to perform elevation work in the New Orleans area. Defendant Kenneth D. Ross is the president of Alston and Robert Ingram Prichard, IV is the treasurer of Alston. Both are alleged to be the alter egos of Alston. The defendants were unlicensed in Louisiana, and thus ineligible to perform elevation work here. The joint venture was formed for the purpose of enabling them to submit joint bids for post-Katrina elevation work in the greater New Orleans area.

         On October 19, 2010 and February 5, 2011, plaintiffs Mann[1] and Bell respectively, entered into contracts with TCC for elevation of their homes, in the belief that the contractor was a licensed, local expert. Plaintiffs allege various damages stemming from the fact that defendants herein were an undisclosed principal on the contracts, and were actually unlicensed and unqualified to perform the elevation work on their homes, which they allege was substandard. They also allege fraud in connection with promissory notes that they signed to guarantee payment for the work.

         The defendants had been operating jointly with TCC under a memorandum of understanding beginning on March 28, 2010, and formalized the joint venture agreement on November 8, 2010. Among other things, the joint venture agreement provided:

Construction Contracts shall be entered into in the names of TCC and ACI as "Joint Venturers", and the Joint Venture shall be known as the "TCC/ACI Joint Venture". Certain construction contracts may be obtained or awarded under the name of TCC solely, but any such construction contracts that pertain to elevation work in the [New Orleans]Area as defined in this Agreement shall be deemed as contracts in the names of TCC and ACI as Joint Venturers. The term of the Joint Venture shall be the time it takes to complete the Construction Contract plus any warranty period required.

         Joint Venture Agreement, Rec. Doc. 103, p. 1, line 24 et seq.

         Plaintiffs' contracts reflect only TCC as the contracting party, and plaintiffs were not aware of the relationship between TCC and the defendants, and defendants' potential liability, until they received a copy of the defendants' memorandum of understanding on March 20, 2018, in connection with state court litigation. On October 15, 2018, plaintiffs filed the instant suit.

         Defendants now move for partial dismissal under Federal Rule 12(b)(6), seeking (1) dismissal of plaintiffs' LUTPA claims on the basis that they are perempted, and (2) dismissal of plaintiffs' rescission and breach of contract claims, arguing that they have failed to join an indispensable party, TCC. Each is considered in turn.


         I. Motion to Dismiss LUTPA Claims Under Rule 12(b)(6). A. Rule 12(b)(6)

         Legal Standard

          Rule 12(b)(6) of the Federal Rules of Civil Procedure permits a motion to dismiss a complaint for failure to state a claim upon which relief can be granted. To survive a Rule 12(b)(6) motion to dismiss, enough facts to state a claim for relief that is plausible on its face must be pleaded. In re Katrina Canal Breaches Litig., 495 F.3d 191, 205 (5th Cir. 2007) (quoting Bell Atl. v. Twombly, 127 S.Ct. 1955, 1964-65 & 1973 n. 14 (2007)). A claim is plausible on its face when the plaintiff pleads facts from which the court can “draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009). “Factual allegations must be enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact).” Twombly, 127 S.Ct. at 1965. The court “must accept all well-pleaded facts as true and view them in the light most favorable to the non-moving party.” In re S. Scrap Material Co., LLC, 541 F.3d 584, 587 (5th Cir. 2008). However, the court need not accept legal conclusions couched as factual allegations as true. Iqbal, 129 S.Ct. at 1949-50.

         In considering a motion to dismiss for failure to state a claim, a district court may consider only the contents of the pleading and the attachments thereto. Collins v. Morgan Stanley Dean Witter, 224 F.3d 496, 498 (5th Cir. 2000) (citing Fed.R.Civ.P. 12(b)(6)). However, the district court "may also consider documents attached to either a motion to dismiss or an opposition to that motion when the documents are referred to in the pleadings and are central to a plaintiff's claims." Brand Coupon Network, L.L.C. v. Catalina Mktg. Corp., 748 F.3d 631, 635 (5th Cir. 2014).

         B. Louisiana Unfair Trade Practices Act, Prescription, ...

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