Douglas et al v. Renola Equity Fund II, LLC et al
Filing
68
ORDER AND REASONS granting Rule 12(c) Motions 36 39 by Bank of America, N.A. and JPMorgan Chase and dismisses them as defendants.. Signed by Chief Judge Sarah S. Vance on 3/17/14. (jjs)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
STEVE B. DOUGLAS, ET AL.
CIVIL ACTION
VERSUS
NO: 13-6192
RENOLA EQUITY FUND II, LLC, ET AL.
SECTION: R
ORDER AND REASONS
Before the Court are the Rule 12(c) motions to dismiss of
defendants Bank of America, N.A. and JPMorgan Chase Bank, N.A.
("Chase") (collectively, "the banks").
They seek to dismiss the
claims they believe were brought against them by plaintiffs Steve
B. Douglas, Levi K. Arnold II, Reginald L. Bouie, and Steven
Barca.
The plaintiffs have clarified that they are not asserting
any claims against the banks, and Rule 19 does not support
plaintiffs' attempts to name the banks as defendants in the
absence of any such claim.
Accordingly, the Court GRANTS the
banks' motions and dismisses them as defendants.
I. BACKGROUND
Plaintiffs all purchased units at the Park View Condominiums
from Renola Equity Fund II, LLC ("Renola II").1
Arnold, Douglas,
and Bouie each executed mortgages that were later assigned to
Chase.2
Barca executed a mortgage that was later assigned to
1
R. Doc. 2-2 at 3-5.
2
R. Doc. 35-1.
Bank of America.3
Plaintiffs allege that Renola II
misrepresented that it had gutted and rehabilitated the units
after Hurricane Katrina.4
After Hurricane Isaac made landfall in
2012, the units were condemned because of mold growth.5
Plaintiffs now seek to have the sales of the condominiums
rescinded.
They also have sued their flood and wind insurers,
alleging that they refused to pay for damage that occurred to the
units during Hurricanes Isaac and Katrina.6
Count IX of the complaint names as defendants the banks and
other mortgagees on the Park View properties, but it asserts no
claim for relief against them.7
Rather, it states only that the
mortgage holders are "indispensable parties because complete
relief cannot be accorded in their absence."8
It further states
that the plaintiffs' claims seeking rescission of the sales of
their condominiums "directly and adversely affects" the mortgage
holders.9
3
R. Doc. 23-3.
4
R. Doc. 2-2 at 12.
5
Id. at 10.
6
Id. at 11-23.
7
Id. at 23.
8
Id.
9
Id.
2
The banks construed this count as asserting a claim for
rescission of the mortgages.
They both filed Rule 12(c) motions
to dismiss arguing that Louisiana law does not allow redhibition
claims against lenders.10
II. LEGAL STANDARD
"A motion for judgment on the pleadings under Rule 12(c) is
subject to the same standard as a motion to dismiss under Rule
12(b)(6)."
2008).
Doe v. MySpace, Inc., 528 F.3d 413, 418 (5th Cir.
In deciding a motion under Rule 12(c), a court must
determine whether the complaint, viewed in the light most
favorable to the plaintiff, states a valid claim for relief.
Id.; see generally 5C Charles Alan Wright & Arthur R. Miller,
Federal Practice & Procedure ยง 1368 (3d ed. 2013).
In deciding
this motion, the Court must look only to the pleadings, Brittan
Commc'ns Int'l Corp. v. Sw. Bell Tel. Co., 313 F.3d 899, 904 (5th
Cir. 2002), and exhibits attached to the pleadings, see VoestAlpine Trading USA Corp. v. Bank of China, 142 F.3d 887, 891 n. 4
(5th Cir. 1998).
III. DISCUSSION
Plaintiffs clarified in their supplemental response that
they are not asserting a redhibition claim or any other claim for
10
R. Doc. 39-1; R. Doc. 36-1.
3
affirmative relief against Chase and Bank of America.
Instead,
they contend that the banks
are indispensable parties to this action under FRCP 19 due
to their status as the holder of the mortgages loans [sic]
of Douglas, Arnold, Barca, and Bouie because Chase and [Bank
of America] may be impacted if Douglas, Arnold, Barca, and
Bouie are successful in their claims against the other
defendants.
They acknowledge that the mortgages will not be extinguished if
their claims against the other defendants succeed and state:
Chase and Bank of America will be entitled to payment of the
outstanding mortgage loans, up to the outstanding balances
owed thereon, out of any damages received as a result of the
rescission and insurance claims asserted by Douglas, Arnold,
Barca, and Bouie.
Plaintiffs invoked Rule 19 as the basis for their decision
to name the banks as defendants despite having no claims against
them.
Rule 19 requires the joinder of any party "who is subject
to service of process and whose joinder will not deprive the
court of subject-matter jurisdiction" if:
(A) in that person's absence, the court cannot accord
complete relief among existing parties; or
(B) that person claims an interest relating to the subject
of the action and is so situated that disposing of the
action in the person's absence may:
(i) as a practical matter impair or impede the person's
ability to protect the interest; or
(ii) leave an existing party subject to a substantial
risk of incurring double, multiple, or otherwise
inconsistent obligations because of the interest.
4
Plaintiffs' claim that they "would be left without a
complete remedy" if Chase and Bank of America were absent from
this suit is without merit, as plaintiffs seek no relief from
those defendants.
Likewise, that the banks may have a
contractual right to a portion of any damages awarded to the
plaintiffs does not subject plaintiffs to a risk of double or
inconsistent obligations.
See Great Am. Ins. Co. v. McElwee
Bros., Inc., CIV.A. 03-2793, 2004 WL 574749, at *2 (E.D. La. Mar.
19, 2004) (non-party who might assert right to portion of
plaintiff's recovery under terms of a contingency fee agreement
was not a necessary party, because the non-party's absence would
not subject plaintiff to risk of double or inconsistent
liability) (citing Pulitzer-Polster v. Pulitzer, 784 F.2d 1305,
1312 (5th Cir.1986)).
Plaintiffs do not assert a claim for rescission of the
mortgages against the banks, and their Rule 19 argument does not
support their attempt to name the banks as defendants in this
action.
Accordingly, there is no basis for the banks' inclusion
as defendants in this action.
They will, however, remain as
counterclaim plaintiffs and cross-claimants based on claims they
have filed against plaintiffs and their insurance companies.11
11
R. Doc. 23 at 22-28; R. Doc. 35 at 24-32.
5
IV. CONCLUSION
For the foregoing reasons, the Court GRANTS Chase and Bank
of America's 12(c) motions to dismiss.
The banks are dismissed
as defendants but remain in this action as counterclaim
plaintiffs and cross-claimants.
New Orleans, Louisiana, this _______ day of March, 2014.
17th
______________________________
SARAH S. VANCE
UNITED STATES DISTRICT JUDGE
6
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