Breland v. Arena Football One, LLC et al

Filing 73

ORDER & REASONS granting 60 Motion to Dismiss for Failure to State a Claim. Signed by Judge Eldon E. Fallon on 11/17/2016. (cms)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA

LORENZO BRELAND

CIVIL ACTION

VERSUS

NO. 15-2258

ARENA FOOTBALL ONE, LLC., ET AL

SECTION "L"

ORDER & REASONS
Before the Court is a Motion to Dismiss pursuant to Fed. R. Civ. P. 12(b)(6) filed by
Defendant Federal Insurance Company. (R. Doc. 60). For the following reasons, the motion is
hereby granted.
I.

BACKGROUND
This case arises out of injuries allegedly sustained by Plaintiff Lorenzo Breland while he

was employed as a professional arena football player. Jurisdiction of this Court is invoked under
diversity. (R. Doc. 44 at 1). Plaintiff alleges misrepresentation, fraud, negligence, and breach of
contract against Defendants, Arena Football One, L.L.C. (“AFO”), which owns Arena Football
League One, LLC (“AFLO”), and Louisiana Arena Football, L.L.C. (“LAF”), which owns the
New Orleans Voodoo franchise. Plaintiff has also filed claims against AFO’s insurers, including
National Casualty Company (“National”) and Federal Insurance Company (“Federal”), averring
that they provided a commercial general liability policy to AFO, AFLO, and LAF. (R. Doc. 53 at
3). 1

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Plaintiff has filed various amended complaints. (R. Docs. 1, 29, 44, 53). The third amended complaint (R. Doc. 53)
was filed to amend the second amended complaint (R. Doc. 44) to remove defendant Everest National Insurance
Company and add National Casualty Company and Federal Insurance Company. All other allegations in the second
amended complaint were adopted in extenso. Accordingly, this Order will rely on both the second and third
amended complaints to determine Plaintiff’s claims. Defendant AFO filed answers to each complaint. (R. Docs. 6,
31, 45, 56).

Plaintiff alleges he initially sustained a concussion while playing for the Tulsa Talons in
2011, which is also a part of the AFO league. (R. Doc. 44 at 12). After the team doctor diagnosed
Plaintiff, he alleges the team encouraged him to return and he started the following game. Id. at
12. Subsequently, he played for the New Orleans Voodoo. Plaintiff alleges that he sustained a
severe blow to the head during a game on April 11, 2014, which caused a second concussion. (R.
Doc. 44 at 12). Plaintiff claims that, after the 2014 incident, he received inadequate medical
attention and care and was pressured to return to playing football before he was fully
rehabilitated. (R. Doc. 44 at 12). He avers that, after complaining to the coach about his
continued health problems, he was sent to a speech pathologist. Id. Plaintiff alleges that this head
injury caused him to remain bedridden for six weeks, and that he was ultimately suspended from
the league and cut from the LAF team. (R. Doc. 44 at 12-13). Plaintiff avers the second
concussion ended his career, and Defendants did not pay for his ongoing medical care or
rehabilitation to allow him to return to play in a healthy manner. Id. at 13. Plaintiff states that he
continues to suffer long-term problems, including dizziness, memory loss, headaches, weight
loss, neck aches and fatigue, and that he faces an increased risk for future disorders as a result of
the injuries. Id. at 13, 16.
Plaintiff seeks damages, past and future medical expenses related to the concussions, and
medical monitoring to facilitate the diagnosis and treatment of future disorders caused by the
injuries. (R. Doc. 29 at 17). Plaintiff asserts that AFO knew of the potential risks associated with
head trauma but intentionally concealed them. (R. Doc. 44 at 13-14; 18). Further, AFO fostered
an environment of brutality and violence and ignored the wellbeing of its players for the sake of
profit. Id. at 14. Plaintiff further alleges that Defendants breached their duties by failing to take
appropriate steps to prevent or mitigate the potential for injury, avoiding such steps due to the

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expense and impact on league profitability. (R. Doc. 29 at 22). Plaintiff claims that Defendants
falsely represented to him that he would receive excellent medical care, which they failed to
provide. (R. Doc. 29 at 13). Plaintiff alleges that the league players’ collective bargaining
agreement created an obligation that the Defendants pay all medical expenses resulting from any
injury sustained while playing in a game, but that Defendants have acted in bad faith and refused
to pay any expenses incurred as a result of Plaintiff’s second 2014 concussion. (R. Doc. 29 at
26).
Specifically, Plaintiff seeks (1) Declaratory Relief under 28 USC §2201 stating that
Defendants knew or should have known about the long-term effects of trauma to the head that
Plaintiff endured while playing for AFO, had a duty to advise Plaintiff of that risk but instead
willfully and intentionally concealed the risk, and recklessly endangered Plaintiff; (2) an
injunction for Court-supervised and Defendant-funded medical monitoring for long-term
neurological affects as a result of Plaintiffs’ minor traumatic brain injuries (“MTBI”), which was
a result of Defendants’ tortious conduct; (3) compensatory damages for past, current, and future
medical care; (4) compensatory damages for pain and suffering; (5) punitive damages; (6) any
other relief; (7) attorneys’ fees; (8) and injunction and/or equitable relief against National and
Federal, holding that the insurance policy provided coverage for Plaintiffs’ injuries and claims
and holding National and Federal in bad faith under La. R.S. §§22:1892 and 22:1973. (R. Doc.
44 at 14-28). Specifically to 8, Plaintiff seeks all forms of insurance penalties, bad faith damages,
general damages, and attorneys’ fees permitted under the aforementioned statutes if Federal or
National decline coverage. (R. Doc. 53 at 3).
Plaintiff’s original Complaint had stated that he was an employee of AFO and the New
Orleans Voodoo, and that he was employed by AFO from 2010 to 2014. (R. Doc. 1 at 11-12).

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Plaintiff added Defendant LAF to the suit after discovering that LAF owned the New Orleans
Voodoo during the time period relevant to Plaintiff’s injuries. (R. Doc. 16 at 1). Plaintiff
submitted that he had mistakenly claimed in the Complaint that he was employed by AFO, when
in fact he was never employed by AFO. (R. Doc. 16-1 at 2).
II.

PRESENT MOTION
Federal now moves to dismiss this case on the ground that Plaintiff failed to state a claim

against Federal, because there is no coverage under a CGL policy, or any other insurance policy
issued by Federal for Plaintiffs allegations of bodily injury and breach of contract against AFO.
(R. Doc. 60-1 at 1). Plaintiffs filed an Opposition (R. Doc. 63) and, with leave of the Court,
Federal filed a reply (R. Doc. 66).
A. Motion to Dismiss Standard
The Federal Rules of Civil Procedure permit a defendant to seek a dismissal of a
complaint based on the “failure to state a claim upon which relief can be granted.” Fed. R. Civ.
P. 12(b)(6). A district court must construe facts in the light most favorable to the nonmoving
party. See Lormand v. U.S. Unwired, Inc., 565 F.3d 228, 232–33 (5th Cir. 2009). The court must
accept as true all factual allegations contained in the complaint. Ashcroft v. Iqbal, 556 U.S. 662,
678 (2009). “To survive a motion to dismiss, a complaint must contain sufficient factual matter,
accepted as true, to ‘state a claim to relief that is plausible on its face.’ 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. (citation omitted).
Dismissal is appropriate only if the complaint fails to plead “enough facts to state a claim to
relief that is plausible on its face.” Bell Atlantic Corporation et al. v. William Twombly, 550 U.S.
544, 570 (2007). A motion to dismiss under rule 12(b)(6) is “viewed with disfavor and is rarely

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granted.” Kaiser Aluminum & Chem. Sales v. Avondale Shipyards, 677 F.2d 1045, 1050 (5th Cir.
1982).
B. The Commercial General Liability Policy
Federal argues that Plaintiff fails to state a claim against them because there is no
applicable insurance policy issued by Federal under which Plaintiff can recover. 2 Federal avers
that the policy period for the most recent CGL policy issued by Federal to AFO was March 7,
1999 to March 7, 2000. (R. Doc. 60-1 at 2). The CGL policy is an “occurrence-based policy
which limits coverage to injuries that occurred within the policy period. Id. at 4. Plaintiffs’
alleged injury occurred, at the earliest, in 2010 which is outside the policy period. Id.
Accordingly, Federal avers that its CGL Policy does not cover Plaintiff’s claims.
Plaintiff does not contest Federal’s argument, and agrees that he cannot recover under the
CGL Policy Issued by Federal. (R. Doc. 63 at 3). Accordingly this issue is Moot.
C. The Directors and Officers Policy
In addition to the CGL Policy, Federal also issued a Directors and Officers liability
policy (“D&O Policy”). (R. Doc. 60-1 at 2). The D&O Policy, however, contained express
exclusions for bodily injury and breach of contract claims. Id. Because Plaintiff’s employment
status is in dispute, Federal also notes that the D&O Policy also bars coverage for Plaintiff to the
extent he is found to be an employee of AFI and therefore an insured person under the D&O
Policy. Id. at 4 n4. The D&O Policy bars coverage for allegations of “employment-related
wrongful acts.” Id.
Plaintiff avers his claims are proper under the D&O Policy because they were filed within
the policy period on June 22, 2015, and his claims are properly covered under the policy. (R.

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Federal highlights that AFO has filed a cross-claim against the other insurer, National, seeking defense and
indemnity, but did not do so against Federal. (R. Doc. 60-1 at 4 n.3)

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Doc. 63 at 3). Plaintiff primarily argues that an exclusion for bodily injury claims in the D&O
Policy is against public policy because it eliminates a large swath of possible causes of action
against AFO given its purpose as a company. Id. at 4-5. Accordingly, he argues the contract
should be void.
Further, Plaintiff argues Federal has a duty to defend claims brought against AFL. Id. at
5-9. He avers that, under Louisiana law, insurer’s duty to defend is greater than its duty to
indemnify. Id. at 5. Accordingly, under Fifth Circuit precedent, unless Plaintiffs’ claims are
clearly excluded, Federal has a duty to defend AFL. Id. at 5-6. Plaintiff avers that the policy does
not exclude breach of fiduciary duty, fraudulent misrepresentation, breach of contract, or actions
taken by AFO that directly or indirectly cause bodily injury. Id. at 7. In essence, Plaintiff argues
that Federal is liable to pay for claims due to AFL’s wrongful acts, which he properly pleads. Id.
at 7-8. He argues that further discovery is required on the issue of the wrongful acts of AFO and
its directors and officers in failing to warn or protect its players. Id. at 8-9.
Federal replied to Plaintiff’s opposition, arguing that Plaintiff did not contradict Federal’s
argument that its D&O policy directly precludes coverage for Plaintiff’s claims. (R. Doc. 66).
Federal restates that its D&O policy plainly proscribes coverage for bodily injury claims and
breach of contract claims that seek medical expenses pursuant to an alleged collective bargaining
agreement. Id. at 1. Federal avers that Plaintiff fails to note the exclusion for breach of contract
claims in the D&O Policy. Id. at 2. Furthermore, Plaintiffs public policy arguments misinterpret
the purposes of various insurance policies – D&O policies typically excludes bodily injury
claims, while CGL policies generally cover such claims. Id. Plaintiff also fails to cite any
Louisiana law supporting his argument that this type of D&O Policy is against public policy. Id.
at 2-5.

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Additionally, while Plaintiff focuses on the term ‘wrongful act’ in the D&O Policy, it
ignores the other policy provisions excluding his claims. Federal avers that, under Louisiana law,
this interpretation fails because it does not read and interpret the policy as a whole. Id. While the
D&O Policy covers for a claim against the insured person for a wrongful act, the claim it has to
be the type of claim covered under the D&O Policy. Id. at 7. Plaintiff’s claim is not one of those
coverable claims. Federal again avers that its arguments are corroborated by the fact that AFO
filed a cross-claim seeking defense and indemnity from another insurance company, but did not
file a similar claim against Federal. Id. at 5.
Plaintiffs claim against Federal under the D&O Policy is not plausible on its face and
cannot survive a 12(b)(6) motion. Under Louisiana law, Plaintiff only has a claim against Federal
“within the terms and limits of the policy….” La. R. S. § 22:655(B)(1). In this case, the parties
dispute the proper interpretation of Federal’s policy provisions. “Interpretation of an insurance
policy is a question of law.” Principal Health Care of La., Inc., v. Lewer Agency, Inc., 38 F.3d
240, 242 (5th Cir. 1994). The language of Federal’s D&O Policy is unambiguous. While Plaintiff
relies on certain sections of the policy to aver that Federal covers AFO for any and all wrongful
acts done by its directors and officers, the D&O Policy must be read as a whole. See Young v.
Brown, 27018 ( La. App. 2 Cir 06/21/95), 658 So. 2d 750, 752 (quoting Louisiana Ins. Guar. v.
Interstate Fire & Casualty Co., 93- C-0911 (La. 01/14/94), 630 So. 2d 759, 763) (“Ambiguity in
an insurance policy must be resolved by construing the policy as a whole; one policy provision is
not to be construed separately at the expense of disregarding other policy provisions.”). While
the D&O Policy covers wrongful acts, it also contains certain exclusions, including for bodily
injury and breach of contract. (R. Doc. 60-3 at 23, 25). Plaintiff’s claim is undoubtable a bodily
injury claim and is therefore not covered under the D&O Policy issued to AFO by Federal.

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While Plaintiff avers that excluding bodily injury claims in a D&O Policy to a football
league is against public policy, he provides no legal support for this claim. Further, it is not as
though AFO has no insurance coverage for bodily injury claims. Those claims are typically
covered under CGL Policies, which were issued by a separate insurer at the time of Plaintiff’s
injury. See 15 La. Civ. L. Treatise, Insurance Law & Practice § 6:2 (4th ed.). While the Court
will not address the applicability of that coverage in this order, it is relevant that such a policy
does exist, and AFL did have insurance coverage for bodily injury claims. 3 The D&O Policy is
simply not intended for that purpose. See Quinlan v. Liberty Bank & Trust Co., 575 So.2d 336,
341 (La. 1990). Finally, it merits noting that Plaintiff does not raise claims under the D&O
Policy in his complaint.
D. Bad Faith
Federal also argues Plaintiff fails to state a claim against Federal for bad faith. While
Plaintiff makes a claim for relief in the even that Federal declines coverage, he does not allege
that Federal breached its policy and his conclusions are merely legal and do not defeat a 12(b)(6)
motion. (R. Doc. 60-1 at 13). He does not allege that Federal improperly or in bad faith denied
coverage, underpaid a claim, or breached a contract, as required under Louisiana law. Id. Further,
Federal argues that because Plaintiff fails to state an underlying claim against them, he cannot
assert any bad-faith claims under Louisiana law. Id. at 14.
Plaintiff does not address these claims in his Opposition to the Motion to Dismiss. The
Court finds no support for a bad faith claim on the face of the complaint.

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A claim has also been filed in this case against National. AFO filed a cross claim for defense and indemnity against
National. (R. Doc. 62). While AFL’s cross-claim is not dispositive, it does suggest that even AFO recognizes that
Federal’s policies do not cover Plaintiff’s claims in this case.

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III.

CONCLUSION
For the foregoing reasons, IT IS ORDERED that Federal’s Motion to Dismiss (R. Doc.

60) is GRANTED.
New Orleans, Louisiana, this 17th day of November, 2016.

UNITED STATES DISTRICT JUDGE

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