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Casey v. BH Management Services Inc.

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

August 1, 2019

MICHAEL CASEY, ET AL.
v.
BH MANAGEMENT SERVICES INC., ET AL.

          HAYES, MAGISTRATE JUDGE.

          MEMORANDUM ORDER

          ELIZABETH E. FOOTE UNITED STATES DISTRICT JUDGE.

         Now before the Court is a Motion to Dismiss for Failure to State a Claim Upon Which Relief can be Granted, pursuant to Federal Rule of Civil Procedure 12(b)(6), filed by Gemini Insurance Company ("Gemini"). [Record Document 21]. Gemini seeks to dismiss a third-party complaint filed against it by BH Management Services, L.L.C. ("BHM")[1] and Great American E&S Insurance Company ("Great American"). [Record Document 19]. This motion is opposed. [Record Document 27]. The parties are ordered to submit additional briefing to the Court on the issues discussed below by Tuesday, September 3, 2019. The Court will rule on Gemini's motion after the parties' briefs have been submitted.

         I. FACTUAL BACKGROUND

         This case arises out of claims by Michael and Velma Casey ("the Caseys") that they suffered personal injuries after being exposed to carbon monoxide while they were living in an apartment complex owned by BHM. Record Document 1, ¶ 1. The Caseys allege that BHM failed to properly repair a broken water heater in the laundry room of their apartment complex, which caused them to suffer "extreme carbon monoxide poisoning" on August 8, 2017. Record Document 30, ¶s 8-11. The Caseys filed suit in the 26th Judicial District Court for the Parish of Bossier, Louisiana, against BHM and its liability insurer, Great American, on June 12, 2018. Record Document 1, ¶ 1. BHM removed the case to this Court on July 18, 2018. See Record Document 1.

         On November 2, 2018, BHM and Great American (together, "third-party Plaintiffs") filed a third-party complaint against Affiliated Associates, Inc. d/b/a Affiliated Roofing Commercial, Inc. ("Affiliated") and Gemini. Record Document 19. The third-party Plaintiffs claim that BHM and Affiliated executed a Vendor Service Agreement in August of 2016 in which Affiliated agreed to replace the roof of the Caseys' apartment complex and to replace the roof vents as needed. Id. at ¶s 4-6. During this repair work, Affiliated allegedly dislodged a vent pipe that was attached to the hot water heater in the boiler room and disrupted the normal venting of carbon monoxide, which caused the Caseys' injuries. Id. at ¶s 7-9. The third-party Plaintiffs assert that the Vendor Service Agreement contained a clause in which Affiliated agreed to "indemnify, hold harmless, and defend" BHM for all claims arising out of bodily injuries caused by a negligent act or omission on the part of Affiliated. Id. at ¶ 10. Finally, the third-party Plaintiffs allege that Gemini was Affiliated's liability insurer when the Caseys' injuries occurred. Id. at ¶ 11. Based on these facts, the third-party Plaintiffs claim that Affiliated should be liable to them for any damages awarded to the Caseys. Id. at 3. Gemini filed the instant motion to dismiss pursuant to Rule 12(b)(6) in response to the third-party complaint. See Record Document 21.

         II. LAW AND ANALYSIS

         A. 12(b)(6) Standard

         In order to survive a motion to dismiss brought under Rule 12(b)(6), a plaintiff must "state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). "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." Id. "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id. The court must accept as true all of the factual allegations in the complaint in determining whether a plaintiff has stated a plausible claim. See Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007); In re Katrina Canal Breaches Litig., 495 F.3d 191, 205 (5th Cir. 2007). However, a court is "not bound to accept as true a legal conclusion couched as a factual allegation." Papasan v. Attain, 478 U.S. 265, 286 (1986). If a complaint cannot meet this standard, it may be dismissed for failure to state a claim upon which relief can be granted. Iqbal, 556 U.S. at 678-79. A court does not evaluate a plaintiffs likelihood for success, but instead determines whether plaintiff has pleaded a legally cognizable claim. U.S. ex rel. Riley v. St. Luke's Episcopal Hosp., 355 F.3d 370, 376 (5th Cir. 2004). A dismissal under 12(b)(6) ends the case "at the point of minimum expenditure of time and money by the parties and the court." Twombly, 550 U.S. at 558.

         B. Applicable Law

         Third-party complaints, such as the one filed in this case, are governed by Federal Rule of Civil Procedure 14. Rule 14 enables a defendant in a federal civil action to "serve a summons and complaint on a nonparty who is or may be liable for all or part of the claim against it." Fed.R.Civ.P. 14(a)(1). "The secondary or derivative liability notion is central and thus impleader has been successfully utilized when the basis of the third-party claim is indemnity, subrogation, contribution, express or implied warranty, or some other theory." Martco Ltd. P 'ship v. Bruks Inc., 430 Fed.Appx. 332, 334 (5th Cir. 2011) (citing 6 Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice & Procedure § 1446, at 415-21 (3d ed. 2010)). An impleader claim can only be brought when a right to relief exists under the applicable substantive law. Id. at 335. Finally, an impleader claim is only available where the liability of the third-party defendant is contingent upon the outcome of the main claim. Mitchell v. Hood, 614 Fed.Appx. 137, 140 (5th Cir. 2015).

         C. Arguments of the Parties

         Gemini claims that the complaint fails to state a cause of action against it and does not establish that Great American is entitled to relief. Record Document 21-1, pp. 3-4. Gemini asserts that the third-party Plaintiffs fail to allege facts showing that they have a right of action against it either in contract or under the Louisiana Direct Action Statute, Louisiana Revised Statutes § 22:1269. Id. at 5.

         The third-party Plaintiffs argue that their complaint against Gemini is properly brought under Federal Rule of Civil Procedure 14. Record Document 27, p. 3. They allege that Gemini will be solidarily liable with Affiliated for any part of the Caseys' damages attributable to Affiliated, up to the limits of Affiliated's policy. Id. They assert that Gemini's claim that the complaint should be dismissed because it does not establish a right of action in contract or under the Direct Action Statute is based on a misconception of their arguments. Id. at 3-4. The third-party Plaintiffs also state ...


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