United States District Court, W.D. Louisiana, Monroe Division
LIFE CHURCH OF OAK GROVE, INC.
GUIDEONE MUTUAL INSURANCE CO.
ELIZABETH ERNY FOOTE JUDGE.
before the Court is a Motion to Dismiss for Improper
Claim-Splitting, or in the Alternative, a Motion for
Abstention or Stay of Proceeding pursuant to Federal Rule of
Civil Procedure 12(b)(6) [Record Document 5] filed by
Defendant GuideOne Mutual Insurance Company
("GuideOne"). Plaintiff Life Church of Oak Grove,
Inc. ("Life Church") has filed an opposition.
[Record Document 12]. For the reasons discussed below,
GuideOne's motion is DENIED.
case arises of an insurer's agreement to settle a claim
with its additional insured, to the exclusion of its named
insured. Life Church renewed its insurance policy, bearing
the number 1417-101 ("the Policy"), with its
insurer GuideOne on March 28, 2016. Record Document 1, p. 3.
Prior to the events that gave rise to this case, Life Church
entered into a lease agreement with the West Carroll Parish
School Board ("the School Board") to lease property
in Oak Grove, Louisiana ("the Property").
Id. at 2. The Properly included an approximately 25,
000 square foot building that the School Board had agreed to
let Life Church convert from an abandoned school into a
church. Id. The Policy listed Life Church as the
named insured and listed the School Board as an additional
insured. Id. at 3.
March 31, 2016, the Property was completely destroyed by a
fire. Id. Life Church claims that the fire was a
covered loss under the Policy and that it properly submitted
claims for payment under the Policy to GuideOne. Id.
On July 19, 2016, after GuideOne conducted a loss appraisal,
it issued a check for the Policy limit of $2, 611, 800 to
"Life Church Oak Grove Inc. and West Carroll Parish
School and Law Offices of Myrt T. Hales, Jr."
Id. at 5. GuideOne issued checks for the same amount
on two more dates, November 10, 2016, and May 31, 2017.
Id. In its state court petition, Life Church
explains that it could not deposit those checks because
"[p]ayment received was joint with another party who now
has no interest in the funds and who cannot provide an
endorsement." Record Document 12-1, p. 1. According to
Life Church, on March 22, 2018, GuideOne "reversed
course" and entered into a settlement agreement with the
School Board and the School Board's insurer, Affiliated
FM Insurance Company ("Affiliated") for $1, 305,
900. Record Document 1, pp. 5-6.
Church states that it was not made aware of this settlement
until July 6, 2018, when information about the settlement was
included in GuideOne's discovery responses in the ongoing
state lawsuit. Id. at 5. Life Church alleges that
GuideOne excluded it from the settlement agreement
intentionally in order to avoid paying the funds due to Life
Church under the Policy. Id. at 5-6. Life Church
alleges that GuideOne is liable for bad faith insurance
practices pursuant to Louisiana Revised Statute §
22:1973. Id. at 6. Specifically, Life Church alleges
that GuideOne misrepresented pertinent facts, failed to
timely pay a settlement agreement, and failed to timely pay a
claim amount due, in violation of its duty of good faith and
fair dealing to its insured as set forth in § 22:1973,
when it entered into a settlement agreement with the School
Board and Affiliated, to the exclusion of Life Church. Record
Document 1, pp. 6-11. Life Church also alleges that GuideOne
is liable for breach of contract for failing to pay Life
Church's loss claims under the Policy. Id. at
11-12. Life Church claims that GuideOne's conduct caused
it to suffer lost earnings, lost profits, loss of goodwill,
increased operating costs, declining membership, declining
attendance, and financial stress. Id. at 12. Life
Church seeks damages for bad faith insurance practices
pursuant to § 22:1973, pre- and post-judgment interest,
attorney's fees, damages for lost earnings, lost profits,
lost goodwill and increased operating costs, court costs, and
any other relief the Court deems appropriate. Id. at
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. Allain, 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 a 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
motion to dismiss, GuideOne argues that this case should be
dismissed due to improper claim-splitting or, in the
alternative, that the Court should dismiss or stay this case
pursuant to the Colorado River Abstention Doctrine.
Record Document 5-1, pp. 3 & 5.
well established that a plaintiff is generally required to
"bring all claims arising out of a common set of facts
in a single lawsuit, and federal district courts have
discretion to enforce that requirement as necessary 'to
avoid duplicative litigation."' Elgin v. Dept.
of Treasury,567 U.S. 1, 34 (2012) (quoting Colorado
River Water Conservation Dist v. United States, 424 U.S.
800, 817 (1976)) (citing Stone v. Dept of Aviation,453 F.3d 1271, 1278 (10th Cir. 2006)). "Claim-splitting
occurs when a single 'cause of action9 is split by
advancing one part in an initial suit and another part in a
later suit. Such 'splitting' may subject the second
claim to preclusion." F.D.LC v. Nelson, 19 F.3d
15 at *2 n.5 (5th Cir. 1994) (internal citations omitted). To
determine what constitutes a single cause of action, the
Fifth Circuit uses the transactional test, which turns upon
whether the two actions are based on the same nucleus of
operative facts. Eubanks v. F.D.LC,977 F.2d 166,
171 (5th Cir. 1992). ...