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Republic Fire and Casualty Insurance Co. v. Charles

United States District Court, E.D. Louisiana

October 22, 2019

REPUBLIC FIRE AND CASUALTY INSURANCE COMPANY
v.
MARDECHRIA CHARLES, ET AL.

         SECTION: "A" (1)

          ORDER AND REASONS

          JAY C. ZAINEY UNITED STATES DISTRICT JUDGE.

         The following motion is before the Court: Motion to Reopen Case (Rec. Doc 56) pursuant to Federal Rules of Civil Procedure (“FRCP”) 60(b)(3) and (6). This motion was filed by the Plaintiff Republic Fire and Casualty Insurance Company (“Republic”). The Defendants, Mardechria Charles and Derrick McDonald, oppose the motion. (Rec. Doc 58, Defendants' Opposition). The motion, submitted for consideration on September 18, 2019, is before the Court on the briefs without oral argument.

         I. BACKGROUND

         A. PRE-DISMISSAL EVENTS

         This matter arises out of a house fire that occurred in Vacherie, Louisiana at a home owned by Mardechria Charles.[1] (Rec. Doc 56-1, p. 2, Republic's Memorandum in Support). The fire occurred on July 10, 2016, and Charles soon thereafter made a claim for damages with Republic. Id. at 3. Because of the fire's suspicious nature, Republic hired a cause and origin expert to investigate the property. Id. The expert's findings concluded that: (1) the fire had two separate and distinct areas of origin, (2) both of these areas of origin were intentionally set, and (3) the fire was started by an ignition of gasoline vapors. (Rec. Doc 1, p. 5, ¶ 26, Republic's Complaint).

         Republic then provided this information to the Louisiana State Fire Marshal who determined that McDonald likely intentionally set the property on fire. (Rec. Doc 1, p. 5, ¶ 30, Republic's Complaint). Subsequently, a warrant was issued for his arrest under the charge of simple arson of an inhabited dwelling. Id. However, these charges were ultimately dropped by the St. John the Baptist Parish District Attorney on September 14, 2017. (Rec. Doc. 28-2, Defendants' Opposition to Republic's Motion to Dismiss Counterclaim).

         This series of events then led Republic to move for a summary judgment declaring that no coverage existed under the policy for this fire (under various coverages and exclusions). (Rec. Doc 56-1, p. 4, Republic's Memorandum in Support). During settlement negotiations, the Defendants' counsel informed Republic that Charles and McDonald were planning on divorcing and that Charles was preparing to file for bankruptcy. Id. This caused Republic to agree to dismiss all of its claims against the Defendants in exchange for a $2, 000 payment from Charles. Id. at 5. The parties then informed the Court of their agreement and an Order of Dismissal was entered on July 23, 2019. (Rec. Doc 54, Order of Dismissal). However, the parties never signed a written “receipt, release, indemnification agreement” nor any other form of written agreement containing their settlement's terms and conditions. (Rec. Doc. 58-1, p. 4, Defendants' Opposition).

         B. POST-DISMISSAL EVENTS

         After this case was dismissed, Charles attempted to pay the $2, 000 settlement amount by using a credit card, but Republic refused to accept this form of payment. (Rec. Doc 56-1, p. 5, Republic's Memorandum in Support). When Charles never tried to make another payment using an alternative payment method, Republic decided to investigate Charles and McDonald's financial situation. Id. Republic's investigation uncovered that, collectively, Charles and McDonald had obtained title of seven different vehicles after the date of the case's dismissal. Id. at 6. Further, Republic alleges that Charles and McDonald never divorced nor did Charles ever file for bankruptcy. Id.

         However, the Defendants in their Opposition dispute these contentions by saying, “[w]hile Mr. McDonald did move out of their home and the parties have been separated since that time, Ms. Charles has not yet filed a Petition for Divorce with the Court due to her limited financial means and her inability to pay an attorney.” (Rec. Doc. 58-1, p. 4, Defendants' Opposition). Further, “[o]n May 10, 2019, Ms. Charles filed a Petition for Bankruptcy in United States Bankruptcy Court for the Eastern District of Michigan.” Id. Lastly, the Defendants also assert that they no longer have possession of five of the seven cars to which Republic claimed they had title. Id. at 8-9.

         Thus, believing that the Defendants had made false representations to them to induce them into making a settlement, Republic filed a motion to reopen this case and set aside the Order of Dismissal. (Rec. Doc 56-1, p. 1, Republic's Memorandum in Support). This motion was filed on July 23, 2019, exactly one year from the original order of dismissal. Id.

         II. LEGAL STANDARD

         Rule 60(b) governs relief from a final judgment when the relief requested is not based upon a clerical mistake, oversight, or omission of the court. Under Rule 60(b), a court may relieve a party or its legal representative ...


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