Hanover Insurance Company v. Plaquemines Parish Government

Filing 412

ORDER AND REASONS denying 306 Motion to Dismiss Crossclaim for Failure to State a Claim. Signed by Judge Jane Triche Milazzo. (ecm)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA

HANOVER INSURANCE COMPANY

CIVIL ACTION

VERSUS

NO. 12–1680

PLAQUEMINES PARISH GOVERNMENT

SECTION "H"(5)

ORDER AND REASONS
Before the Court is a Motion to Dismiss Crossclaim (Doc. 306). For the
following reasons, the Motion is DENIED.
BACKGROUND
In 2008, Defendant Plaquemines Parish ("the Parish") hired Catco
General Contractors to construct a community center in Boothville, LA. Plaintiff
Hanover Insurance Company issued a performance bond for the project. Due to
several disputes regarding the quality of the completed work, the Parish refused
to tender the final payment on the construction contract to Catco. Catco in turn
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refused to pay certain subcontractors on the project. Those subcontractors filed
claims with Hanover seeking amounts due on the subcontracts. Hanover then
instituted the instant litigation claiming that the Parish wrongfully withheld the
final payment from Catco, resulting in several hundred thousand dollars in
various claims against Hanover.
On May 29, 2013, in response to Hanover's Complaint, the Parish asserted
a counterclaim against Hanover and a third-party demand against Catco and
several other entities who were allegedly involved in the design of the
community center. The Parish's counterclaim and third-party demand allege
that Catco failed to complete the construction according to specifications. On
June 21, 2013, in response to the Parish's counterclaim, Hanover filed a thirdparty demand against several of the subcontractors involved in the construction
of the community center.
Amerisure Mutual Insurance Company ("Amerisure") is Catco's general
liability insurer. Amerisure is named as a third-party defendant on several of
the above-mentioned third-party demands. In response to the claims made
against it and Catco, Amerisure filed a crossclaim against five of Catco's
subcontractors. One subcontractor, Thrasher Construction, filed the instant
Motion to Dismiss.
In the crossclaim, Amerisure alleges that, to the extent that Catco
ultimately may become liable to Plaquemines and/or Hanover, the five named
subcontractors are liable to Catco (and, by extension, Amerisure).

While

Amerisure and Catco deny that Catco is liable to Plaquemines and/or Hanover,
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they claim that any eventual liability will only be imposed because the named
subcontractors failed to properly complete the challenged work.
Amerisure's crossclaim relies on two alternative legal theories. First,
Amerisure claims that it is subrogated to Catco's rights against the
subcontractors. Second, Amerisure claims that it is a third-party beneficiary of
the contracts between Catco and the subcontractors. None of the subcontractors
have moved to dismiss the subrogation claim, and only Thrasher has moved to
dismiss the third-party beneficiary claim.
LEGAL STANDARD
To survive a Rule 12(b)(6) motion to dismiss, a plaintiff must plead enough
facts "to state a claim to relief that is plausible on its face."1 A claim is "plausible
on its face" when the pleaded facts allow the court to "draw the reasonable
inference that the defendant is liable for the misconduct alleged."2 A court must
accept the complaint’s factual allegations as true and must "draw all reasonable
inferences in the plaintiff’s favor."3 The court need not, however, accept as true
legal conclusions couched as factual allegations.4 To be legally sufficient, a
complaint must establish more than a "sheer possibility" that the plaintiff’s
claims are true.5 The complaint must contain enough factual allegations to raise
1

Ashcroft v. Iqbal, 556 U.S. 662 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S.
544, 547 (2007)).
2

Id.

3

Lormand v. U.S. Unwired, Inc., 565 F.3d 228, 232 (5th Cir. 2009).

4

Iqbal, 556 U.S. at 678.

5

Id.

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a reasonable expectation that discovery will reveal evidence of each element of
the plaintiff's claim.6 "A motion to dismiss under rule 12(b)(6) is viewed with
disfavor and is rarely granted."7 Nonetheless, if it is apparent from the face of
the complaint that an insurmountable bar to relief exists and the plaintiff is not
entitled to relief, the court must dismiss the claim.8
LAW AND ANALYSIS
Thrasher argues that Amerisure's is not a third-party beneficiary of the
subcontract between Thrasher and Catco. The parties agree that, in order to
recover under a third-party beneficiary theory,9 Amerisure must show that "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."10
In its crossclaim, Amerisure clearly alleges that it is a third-party
beneficiary of the subcontract between Catco and Thrasher. The crossclaim
explains that the subcontract requires Thrasher to defend and indemnify Catco
against any claims asserted against Catco arising out of work that Thrasher was
obligated to perform under the subcontract. Amerisure further contends that
6

Lormand, 565 F.3d at 255–57.

7

Harrington v. State Farm Fire & Cas. Co., 563 F.3d 141,147 (5th Cir.2009).

8

Jones v. Bock, 549 U.S. 199, 215 (2007).

9

Louisiana law uses the terms "stipulation pour autrui" and third party beneficiary
interchangeably. See Joseph v. Hosp. Serv. Dist. No. 2 of Parish of St. Mary, 939 So. 2d 1206,
1212 (La. 10/15/06).
10

Id.

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Hanover and Plaquemines currently assert claims against Catco arising out of
work that Thrasher was supposed to perform. Thus, according to Amerisure,
Thrasher is obligated to defend and indemnify Catco against those claims.
Finally, Amerisure alleges that Thrasher is also obligated to defend and
indemnify Amerisure because Amerisure is a third-party beneficiary to the
contract. In particular, Amerisure contends that paragraph 13 of the contract
between Catco and Thrasher contains a clear stipulation for its benefit. That
provision reads:
Subcontractor covenants and agrees to defend,
indemnify, exonerate, and hold harmless the Owner,
Architect, Contractor and Contractor's Surety and their
respective consultants, agents, and employees from and
against:
(a) every claim or action for breach of contract or
otherwise filed or presented by the Owner or other
person, firm or entity arising out of or related to any
work or operation performed by, for, or on behalf of, the
Subcontractor . . .11
For its part, Thrasher presents several arguments regarding the intent of
the parties and the purpose of the contract. These arguments, however, are not
appropriate on a motion to dismiss. When evaluating a complaint pursuant to
Rule 12(b)(6), the Court only asks whether it establishes a possibility of recovery.
In this case, Amerisure has plausibly alleged that the subcontract contains a
clear stipulation for its benefit. To the extent that Thrasher contends that
Amerisure's reading of the subcontract is wrong, those arguments are more
11

Doc. 306-2, p. 4.

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appropriate for a later date.
CONCLUSION
For the foregoing reasons, Thrasher's Motion to Dismiss is DENIED.
New Orleans, Louisiana, this 15th day of January, 2015.

____________________________
JANE TRICHE MILAZZO
UNITED STATES DISTRICT JUDGE

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