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Butler v. American Security Insurance Company

United States District Court, M.D. Louisiana

April 17, 2019

CHERYL BUTLER
v.
AMERICAN SECURITY INSURANCE COMPANY

          RULING AND ORDER

          JUDGE BRIAN A. JACKSON UNITED STATES DISTRICT COURT

         Before the Court is American Security Insurance Company's Motion to Dismiss (Doc. 3) Cheryl Butler's breach-of-contract claim. For the reasons that follow, the Motion (Doc. 3) is GRANTED.

         I. BACKGROUND

         A homeowner sued an insurer for failing to pay a property-damage claim under a lender-placed policy.[1] (Doc. 1-1). At issue is whether the homeowner has standing to sue under the policy as a third-party beneficiary[2] (Docs. 3, 4). The Court holds that she does not.

         Plaintiff Cheryl Butler owns property in St. Gabriel, Louisiana. (Doc. 1-1 at ¶ 2). Wells Fargo holds a mortgage on the property. (Id. at ¶ 3). When Plaintiff failed to provide proof of insurance, Wells Fargo obtained an American Security policy insuring the property. (Doc. 3-2).

         Pointing to that policy, Plaintiff demanded that American Security pay the cost of repairing water damage to her home. (Doc. 1-1 at ¶ 14). She sued American Security for breaching the policy after she received no response. (Id.).

         American Security moves to dismiss Plaintiffs complaint for failure to state a breach-of-contract claim. (Doc. 3). American Security argues that Plaintiff lacks standing to sue under the policy because Plaintiff is not a named insured, an additional named insured, or a third-party beneficiary. (Doc. 3-1). Plaintiff rejoins that she has standing as a third-party beneficiary. (Doc. 4).

         II. LEGAL STANDARD

         To overcome American Security's motion, Plaintiff must plead a plausible claim for relief See Romero v. City of Grapevine, Tex., 888 F.3d 170, 176 (5th Cir. 2018) (citing Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). A claim is plausible if it is pleaded with factual content that allows the Court to reasonably infer that American Security is liable for the misconduct alleged. See Edionwe v. Bailey, 860 F.3d 287, 291 (5th Cir. 2017) (citing Iqbal, 556 U.S. at 678).

         The Court accepts as true the well-pleaded facts of Plaintiffs complaint and views those facts in the light most favorable to Plaintiff. See Midwest Feeders, Inc. v. Bank of Franklin, 886 F.3d 507, 513 (5th Cir. 2018). Because Plaintiff references the American Security policy in her complaint, the Court considers the policy in its ruling. See Wolcott v. Sebelius, 635 F.3d 757, 763 (5th Cir. 2011).

         III. DISCUSSION

         A plaintiff may sue under an insurance policy if she is a named insured, an additional named insured, or a third-party beneficiary. See Joseph v. Hosp. Serv. Dist. No. 2 of Parish of St. Mary, 2005-2364, pp. 8-9 (La. 10/15/06); 939 So.2d 1206, 1212.

         Plaintiff does not allege that she is a named insured, an additional named insured, or a third-party beneficiary. (Doc. 1). So she fails to plead facts showing that she has standing to sue under the American Security policy. See Joseph, 939 So.2d at 1212. Because she fails to plead facts sufficient to show standing, she fails to plead a plausible claim against American Security. See Romero, 888 F.3d at 176. And because her claim is not plausibly pleaded, the Court must dismiss it; the question is whether that dismissal should be with or without prejudice. That question, in turn, depends on whether Plaintiff can qualify as a third-party beneficiary under American Security's policy.

         In her opposition, Plaintiff concedes that she is neither a named insured nor a named additional insured. (Doc. 4). She insists, however, that ...


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