United States District Court, W.D. Louisiana, Shreveport Division
ELIZABETH FRY FRANKLIN, ET AL.
REGIONS BANK ELEANOR BAUGNIES DE ST. MARCEAUX
A. DOUGHTY JUDGE
SUPPLEMENTAL REPORT AND RECOMMENDATION
L. HAYES UNITED STATES MAGISTRATE JUDGE
the undersigned magistrate judge, on second reference from
the District Court, is a motion to dismiss for failure to
state a claim upon which relief can be granted [doc. # 75]
filed by defendant Regions Bank (“Regions”). The
motion is opposed. For reasons assigned below, it is
recommended that the motion be DENIED, as originally filed,
but GRANTED, on the grounds advanced by movant in its
objection to the undersigned's initial report and
February 12, 2019, Regions filed the instant motion to
dismiss for failure to state a claim upon which relief can be
granted. In its original motion, Regions argued that
plaintiffs' claims had prescribed and were subject to
dismissal because the agency agreements at issue in this
consolidated case were subject to the Louisiana Credit
Agreement Statute, which imposed a one year prescriptive
period for any claim for breach of fiduciary duty stemming
not only from credit agreements, but from all types of
relationships that a financial institution (such as Regions)
is a party to. See La. R.S. § 6:1124. Regions further
argued that because plaintiff, St. Marceaux, did not allege
that she had a written agency agreement with Regions, then
the bank did not owe her a fiduciary obligation or
responsibility. See La. R.S. § 6:1124.
their opposition to the motion to dismiss, plaintiffs
clarified that they were prosecuting a claim for breach of
contract, not a claim for breach of fiduciary duty. (Pl. Opp.
Memo. [doc. # 77]). Nonetheless, in its reply brief, Regions
re-urged dismissal on the same grounds asserted in its
original motion, i.e., that plaintiffs' “true
claim” was one for breach of fiduciary duty. [doc. #
30, 2019, the undersigned readily concluded that plaintiffs
were not asserting a claim for breach of fiduciary duty, and
therefore, their cause of action was not subject to §
6:1124's one year prescriptive period. (May 30, 2019,
R&R [doc. # 82]). Accordingly, the undersigned
recommended that Regions' motion to dismiss be denied.
Id. The court added, however, that the closer
question was whether plaintiffs' claims really were
ex contractu or, instead, did they sound ex
delicto. Id. At least at the pleading stage,
in the absence of any argument to the contrary, the
undersigned was inclined to credit plaintiffs'
allegations that Regions had breached specific contractual
13, 2019, Regions filed an objection to the R&R, in which
it stood by the bases for its original motion to dismiss, but
then asserted that the undersigned had
“fundamental[ly]” and unmistakabl[y]” erred
by failing to recognize that 1) plaintiff, St. Marceaux's
contract of mandate with Regions had to be in writing because
it purportedly authorized the lease of mineral rights which
had to be perfected by written act, La. Civ. Code Art. 2993;
and 2) plaintiffs' remaining claims were delictual, and
therefore, time-barred under Louisiana Civil Code Article
3492. (Regions Objection [doc. # 83]).
that same day, the District Court noted that Regions, in its
objection, had for the first time argued that plaintiffs'
claims were prescribed as a delictual action under Louisiana
Civil Code Article 3492. [doc. # 84]. Therefore, the District
Court referred Regions' motion back to the undersigned
for consideration of this new argument, via supplemental
report and recommendation. Id. A few hours later,
Regions filed a motion for summary judgment seeking dismissal
of plaintiffs' claims on the basis that their claims
sounded in tort and were prescribed. [doc. # 85]. The motion
for summary judgment is pending before the District Court.
[doc. # 86].
3, 2019, plaintiffs filed a supplemental opposition in
response to Regions' modified prescription argument.
[doc. # 91]. The matter is ripe.
court hereby adopts and incorporates the background, standard
of review, and governing law sections of the May 30, 2019,
R&R. The instant report supersedes only those portions of
the prior R&R that are inconsistent herewith.
Nonetheless, for ease of reading, the court will recite some
provisions of the prior report.
Peironnet plaintiffs allege that they collectively own a
majority interest in 1805.34 acres of property in various
sections located within Caddo Parish, Louisiana (the
“Property”) and that they contracted with Regions
in writing “[t]o manage and supervise all said oil gas
royalty and mineral interests, to do therewith what is usual
and customary to do with property of the same kind and in the
same locality . . . ” and “[t]o execute
acknowledge and deliver oil, gas and mineral leases
containing such terms and provisions as the bank shall deem
proper . . .” (Peironnet Compl., ¶ 5 and the
“Agency Agreement” attached thereto).
second consolidated action, St. Marceaux alleged that she
owned a minority interest in the Property and that she too
had an agreement with Regions. (St. Marceaux Compl. ¶
7). She further alleged that she was injured in the same
manner and for the same reasons as the Peironnet Plaintiffs.
(St. Marceaux Compl., ¶¶ 6-29 [doc. # 1]).
complaint specified a theory of liability. Plaintiffs,
however, allege that Regions injured them by failing to draft
an appropriate lease extension with an oil and gas
exploration company. In support of their claims, the Peironnet
plaintiffs and St. Marceaux rely on the outcome of a lawsuit
between themselves and the exploration company over the lease
extension. Peironnet v. Matador Res. Co., 144 So.3d
791 (La. 2013). In its June 28, 2013, decision, the Louisiana
Supreme Court determined that the lease extension was valid
and that “the plaintiffs' failure to question the
extension, to seek clarification of the acreage covered, or
to even discuss the Deep Rights demonstrate[d] an inexcusable
lack of ‘elementary prudence' or simple diligence .