United States District Court, E.D. Louisiana
MARC G. BARBE
OCWEN LOAN SERVICING, LLC and AMERICAN MODERN HOME INSURANCE COMPANY
ORDER AND REASONS
L. C. FELDMAN UNITED STATES DISTRICT JUDGE.
the Court are the defendants' Rule 12(b)(6) motions to
dismiss the plaintiff's first amended complaint. For the
reasons that follow, the motions are GRANTED.
lawsuit concerns allegations that a mortgage servicing
company and a homeowners' insurance carrier conspired to
issue a force-placed insurance policy with inflated premiums
and then failed to pursue and arbitrarily withheld policy
Barbe and his wife, Renada, are the mortgagors of a home
located in Metairie, Louisiana. Ocwen Loan Servicing, LLC
services their mortgage. The mortgage agreement requires the
Barbes to insure their property against any hazards
“for which Lender requires insurance;” it further
provides that, if they fail to maintain appropriate coverage,
“Lender may obtain insurance coverage, at Lender's
option and Borrower's expense.”
letter dated December 31, 2015, Ocwen advised Mr. Barbe that
it had not received proof of coverage, as required by the
terms of the mortgage, and therefore had renewed a
lender-placed policy at his expense. Ocwen explained that the
policy's annual premium of $3, 927 would be billed to Mr.
Barbe's escrow account and that he could cancel the
coverage at any time, and earn a corresponding refund of any
unearned premium, by providing Ocwen with evidence of other
acceptable coverage. Ocwen also strongly recommended that
Barbe obtain his own policy and warned that the cost of the
lender-placed coverage “may be much higher than the
amount [he] would normally pay.” Finally, Ocwen
attached to that letter a copy of the policy it had obtained
from American Modern Home Insurance Company, which named
Ocwen as the “insured” and listed the Barbes as
“borrowers.” On August 5, 2016, high velocity
winds damaged the Barbes' roof and exterior elevations,
which allowed water to infiltrate the interior of the home
and damage the ceilings, walls, floors, and fixtures. The
Barbes promptly notified American Modern and filed a claim
under the policy. According to the Barbes, American
Modern's adjusters provided grossly inadequate estimates
and failed to fully and properly pay the property damage
August 3, 2018, Marc Barbe and Renada Barbe sued American
Modern Home Insurance Company and Ocwen Loan Servicing, LLC
in Louisiana state court, alleging that American Modern
breached the insurance contract and engaged in bad faith
claims adjusting practices under Louisiana law, that Ocwen
breached the mortgage agreement by overcharging plaintiffs
for the insurance policy and failing to assist them in
pursuing insurance proceeds, and that the defendants
negligently coordinated their efforts to overcharge
plaintiffs for the policy. After timely removing the lawsuit
to this Court, the defendants moved to dismiss the
plaintiffs' petition for failure to state a claim. The
plaintiffs then filed an amended complaint on February 19,
2019, after which Renanda Barbe voluntarily dismissed her
claims with prejudice.
first amended complaint, Mr. Barbe asserts that he is an
“insured” under the American Modern policy, or at
the very least, a third-party beneficiary of the policy. He
then alleges that American Modern breached the insurance
contract by failing to properly investigate and pay his claim
and is also liable for bad faith statutory penalties under
Louisiana law. With respect to Ocwen, Mr. Barbe alleges that
his mortgage servicer breached the mortgage agreement by
overcharging for the insurance policy and by failing to
assist him in obtaining sufficient insurance proceeds to
repair his property. Barbe also alleges that American Modern
and Ocwen participated in a conspiracy, in which Ocwen would
pass along an inflated premium to the Barbes and receive
“commissions and/or kickbacks” from American
Modern; he asserts a claim of unjust enrichment against each
defendant for the alleged unearned benefits they received at
defendants now move to dismiss the plaintiff's first
amended complaint for failure to state a claim upon which
relief may be granted.
12(b)(6) of the Federal Rules of Civil Procedure allows a
party to move for dismissal of a complaint for failure to
state a claim upon which relief can be granted. Such a motion
is rarely granted because it is viewed with disfavor. See
Lowrey v. Tex. A & M Univ. Sys., 117 F.3d 242, 247
(5th Cir. 1997) (quoting Kaiser Aluminum & Chem.
Sales, Inc. v. Avondale Shipyards, Inc., 677 F.2d 1045,
1050 (5th Cir. 1982)).
Rule 8(a)(2) of the Federal Rules of Civil Procedure, a
pleading must contain a “short and plain statement of
the claim showing that the pleader is entitled to
relief.” Ashcroft v. Iqbal, 556 U.S. 662,
678-79 (2009) (citing Fed.R.Civ.P. 8). “[T]he pleading
standard Rule 8 announces does not require ‘detailed
factual allegations,' but it demands more than an
accusation.” Id. at 678 (citing Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 555 (2007)). Stated
differently, Rule 8 “does not unlock the doors of
discovery for a plaintiff armed with nothing more than
conclusions.” Id. at 678-79.
considering a Rule 12(b)(6) motion, the Court
“accept[s] all well-pleaded facts as true and view[s]
all facts in the light most favorable to the
plaintiff.” See Thompson v. City of Waco,
Texas, 764 F.3d 500, 502 (5th Cir. 2014) (citing Doe
ex rel. Magee v. Covington Cnty. Sch. Dist. ex rel.
Keys, 675 F.3d 849, 854 (5th Cir. 2012) (en banc)). But,
in deciding whether dismissal is warranted, the Court will
not accept conclusory allegations in the complaint as true.
Id. at 502-03; see also Iqbal, 556 U.S. at
678 (“[W]e are not bound to accept as true a legal
conclusion couched as a factual allegation.”) (internal
survive dismissal, “‘a complaint must contain
sufficient factual matter, accepted as true, to state a claim
to relief that is plausible on its face.'”
Gonzalez v. Kay, 577 F.3d 600, 603 (5th Cir. 2009)
(quoting Iqbal, 556 U.S. at 678) (internal quotation
marks omitted). “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, 550 U.S.
at 555 (citations and footnote omitted). “A claim has
facial plausibility when the plaintiff pleads factual content
that allows the court to draw the reasonable inference that
the defendant is liable for the misconduct alleged.”
Iqbal, 556 U.S. at 678 (“The plausibility
standard is not akin to a ‘probability
requirement,' but it asks for more than a sheer
possibility that a defendant has acted unlawfully.”).
This is a “context-specific task that requires the
reviewing court to draw on its judicial experience and common
sense.” Id. at 679. “Where a complaint
pleads facts that are merely consistent with a
defendant's liability, it stops short of the line between
possibility and plausibility of entitlement to relief.”
Id. at 678 (internal quotations omitted) (citing
Twombly, 550 U.S. at 557). “[A]
plaintiff's obligation to provide the ‘grounds'
of his ‘entitle[ment] to relief'”, thus,
“requires more than labels and conclusions, and a
formulaic recitation of the elements of a cause of action
will not do.” Twombly, 550 U.S. at 555
(alteration in original) (citation omitted).
when reviewing a motion to dismiss, the Court may consider
documents that are essentially “part of the
pleadings” -- that is, any documents attached to or
incorporated into the plaintiff's complaint by reference
that are central to the plaintiff's claim for relief.
Causey v. Sewell Cadillac-Chevrolet, Inc., 394 F.3d
285, 288 (5th Cir. 2004) (citing Collins v. Morgan
Stanley Dean Witter, 224 F.3d 496, 498-99 (5th Cir.
2000)). The Court is also permitted to consider matters of
public record and other matters subject to judicial notice
without converting the motion into one for summary judgment.
See United States ex rel. Willard v. Humana
Health Plan of Texas Inc., 336 F.3d 375, 379 (5th Cir.
the Barbes' mortgage agreement, the American Modern
force-placed insurance policy, and Ocwen's December 31,
2015 letter notifying the Barbes that the force-placed policy
would be renewed are all attached to the plaintiff's
first amended complaint and are central to his claims for
relief. Therefore, the Court may consider the content of
these documents in deciding the defendants' motions to
Court first considers whether the plaintiff has stated a
breach of contract claim against American Modern.
Specifically, Barbe alleges that American Modern breached the
force-placed insurance policy by failing to adequately
investigate, adjust, and pay his claim.
state a claim under an insurance policy, the plaintiff must
be a named insured, an additional named insured, or an
intended third-party beneficiary of the policy.”
Guthrie Brown v. Am. Modern Home Ins. Co., No.
16-16289, 2017 U.S. Dist. LEXIS 80057, at *10-11 (E.D. La.
May 25, 2017) (Lemmon, J.) (citing Williams v. Certain
Underwriters of Lloyd's of London, 398 Fed.Appx. 44,
47 (5th Cir. 2010)). Although the plaintiff asserts that he
is either an insured, or at the very least a third-party
beneficiary of the policy, he fails to allege facts to
support either status.
plaintiff first alleges that he is an insured under the
policy “according to the express language provided
therein, ” but he points to no language within the
policy that identifies him as an insured or an additional
named insured. To the extent he relies on the “Evidence
of Insurance” certificate to support his purported
insured status, another Section of this Court has expressly
rejected that argument. See Riley v. Southwest Business
Corp., No. 06-4884, 2008 WL 4286631, at *6-7 (E.D. La.
Sept. 17, 2008). In Riley, Judge Vance held that an
insurance certificate identical to the one at issue here did
not constitute a binding contract between an insurance
carrier and a borrower because it “clearly note[d] that
[lender] is the ‘insured' and that [plaintiff] is
merely the ‘borrower[, ]'” and it
“expressly refer[ed] the reader to the terms of the
policy and disclaim[ed] any legal effect.”
Id. Accordingly, the insurance certificate
does not make Barbe a party to the American Modern insurance
plaintiff's attempt to claim third-party beneficiary
status fares no better. Under Louisiana law, a contract for
the benefit of a third party is referred to as a stipulation
pour autrui. See Joseph v. Hosp. Serv. Dist. No.
2 of the Parish of St. Mary, 939 So.2d 1206, 1211 (La.
2006). The Louisiana Supreme Court has articulated three
criteria for determining whether a contract stipulates a
benefit for a third party: “1) the stipulation for a
third party is manifestly clear; 2) there is certainty as to
the benefit provided the third party; and 3) the benefit is
not a mere incident of the contract between the promisor and
the promisee.” Id. at 1212. The state ...