Bickerstaff et al v. Bickerstaff et al

Filing 52

ORDER & REASONS granting 41 Motion to Dismiss for Failure to State a Claim without Prejudice. Party Charles Hausknecht, Jr and Pailet, Meunier and LeBlanc, L.L.P. dismissed. Signed by Judge Sarah S. Vance on 12/28/2016. (mmm)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
LORETTA LOIS BICKERSTAFF
APPEARING HEREIN THROUGH HER
LEGALLY APPOINTED AGENT IN FACT
AND MANDATARY, GERALD GREGORY
BICKERSTAFF

CIVIL ACTION

VERSUS

NO. 15-3639

CAROLYN KRIDER BICKERSTAFF, ET AL.

SECTION “R” (3)

ORDER AND REASONS
Defendants Charles “Benny” Hausknecht, Jr. and Pailet, Meunier and
LeBlanc, L.L.P. move to dismiss plaintiff Loretta Bickerstaff’s claims against
them.1 Because plaintiff cannot proceed with her claims against defendants
until she complies with the Louisiana Accountancy Act, the Court GRANTS
defendants’ motion.

I.

BACKGROUND
This diversity action arises out of a property ownership dispute.

Plaintiff Loretta Bickerstaff alleges that she is the valid legal owner of a beach
house in Gulf Shores, Alabama. According to plaintiff’s complaint, Loretta

1

R. Doc. 41.

Bickerstaff purchased the Alabama beach house in July 1993.2 In February
2010, plaintiff granted her brother, Richard Bickerstaff, power of attorney,
giving him management and control of her affairs.3 Plaintiff alleges that
Richard Bickerstaff then concocted a scheme to take ownership of the house
himself.4 She also alleges that defendants Charles “Benny” Hausknecht, Jr.,
a certified public accountant, and Hausknecht’s accounting firm, Pailet,
Meunier, and LeBlanc, L.L.P. participated in the scheme.5 This participation
occurred despite the Pailet defendants’ representation of plaintiff in tax
matters and the “various fiduciary, legal, and ethical duties” that they
allegedly owed to plaintiff.6
Plaintiff also alleges that Richard Bickerstaff7 and the Pailet defendants
filed unauthorized claims on plaintiff’s behalf against British Petroleum after
the 2010 Deepwater Horizon rig explosion, in an attempt to collect
settlement proceeds for the loss of rental revenue and diminished value of
the beach house.8 Further, plaintiff contends that the Pailet defendants were
involved in confecting a second mortgage on the beach house to secure a

2
3
4
5
6
7
8

R. Doc. 1 at 3 ¶ 13.
Id. ¶ 14.
Id. at 3 ¶¶ 30-31.
R. Doc. 21 at 4 ¶ 53.
Id. at 3 ¶¶ 50-51.
R. Doc. 1 at 7-8 ¶¶ 33-34.
R. Doc. 21 at 3 ¶ 52.
2

sham loan to her brother, Richard, from his wife, defendant Carolyn
Bickerstaff.9

Additionally, plaintiff alleges that the Pailet defendants

prepared and filed unauthorized federal and state tax returns on her behalf
relating to the transfer of the beach house.10
On August 19, 2015, plaintiff, through her current legally appointed
agent-in-fact and mandatary Gerald Gregory Bickerstaff, filed this lawsuit
against Carolyn Bickerstaff and her attorneys.11 The Court dismissed
plaintiff’s claims against the attorneys for lack of personal jurisdiction on
April 7, 2016.12 On April 29, 2016, plaintiff filed her First Supplemental and
Amending Complaint, which added the Pailet defendants as parties.13
Plaintiff asks the Court to rescind the Second Mortgage and award plaintiff
damages, including pain and suffering.14
At the same time as plaintiff filed her amended complaint, plaintiff
moved the Court to stay the case pending the resolution of a review of
plaintiff’s complaints against Hausknecht by the State Board of Certified
Public Accountants of Louisiana in accordance with Louisiana Revised

9
10
11
12
13
14

Id. at 9-10 ¶¶ 84-89.
Id. at 4-6 ¶¶54-63.
R. Doc. 1 at 3 ¶ 7.
R. Doc. 16.
R. Doc. 21.
Id. at 10-11.
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Statutes §§ 37:101-124.15 As summarized by plaintiff, Section 37:105 sets
forth that “any action against a certified public accountant, the firm, or the
insurer, may not be filed in any court prior to presenting the claims to an
accountant review panel.”16 The Court stayed the case,17 reopening it after the
State Board concluded its proceedings.18
The Pailet defendants now move the Court, pursuant to Federal Rule
of Civil Procedure 12(b)(6), to dismiss plaintiff’s claims against them because
the claims are premature.19 Defendants argue that Section 37:105 requires
claims against accountants be reviewed by the Society of Louisiana Certified
Public Accountants, not the State Board of Certified Public Accountants of
Louisiana, before a plaintiff may proceed in court. The Pailet defendants
further argue that because plaintiff has not obtained a review of her claims
against them from the proper entity, Section 37:105 bars plaintiff’s suit.20
Plaintiff argues that Section 37:105 does not apply because she was not a
client of Hausknecht or his firm at the time of the actions complained of, and

15
16
17
18
19
20

R. Doc. 19.
R. Doc. 19-2 at 2.
R. Doc. 22.
R. Doc. 25-3; R. Doc. 26.
R. Doc. 41.
R. Doc. 41-4 at 4-5.
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because she asserts claims of fraud, negligence, and breach of fiduciary duty,
not accountant malpractice.21

II.

LEGAL STANDARD
To survive a Rule 12(b)(6) motion to dismiss, the plaintiff must plead

“enough facts to state a claim to relief that is plausible on its face.” Ashcroft
v. Iqbal, 556 U.S. 662, 697 (2009) (quoting Bell Atl. Corp. v. Twombly, 550
U.S. 544, 570 (2007)). A claim is facially plausible when the plaintiff pleads
facts that allow the court to “draw the reasonable inference that the
defendant is liable for the misconduct alleged.” Id. at 678. A court must
accept all well-pleaded facts as true and must draw all reasonable inferences
in favor of the plaintiff. See Lormand v. US Unwired, Inc., 565 F.3d 228,
239 (5th Cir. 2009); Baker v. Putnal, 75 F.3d 190, 196 (5th Cir. 1996).
A legally sufficient complaint must establish more than a “sheer
possibility” that the plaintiff’s claim is true. Iqbal, 556 U.S. at 678. It need
not contain detailed factual allegations, but it must go beyond labels, legal
conclusions, or formulaic recitations of the elements of a cause of action. Id.
In other words, the face of the complaint must contain enough factual matter
to raise a reasonable expectation that discovery will reveal evidence of each

21

R. Doc. 45 at 2.
5

element of the plaintiff’s claim. Lormand, 565 F.3d at 257. If there are
insufficient factual allegations to raise a right to relief above the speculative
level, or if it is apparent from the face of the complaint that there is an
insuperable bar to relief, the claim must be dismissed. Twombly, 550 U.S.
at 555.
In considering a motion to dismiss for failure to state a claim, a court
must typically limit itself to the contents of the pleadings, including their
attachments. Collins v. Morgan Stanley Dean Witter, 224 F.3d 496, 498
(5th Cir. 2000). “If, on a motion under 12(b)(6) . . . matters outside the
pleadings are presented to and not excluded by the court, the motion must
be treated as one for summary judgment under Rule 56.” Fed. R. Civ. P.
12(d). Nevertheless, uncontested documents referred to in the pleadings
may be considered by the Court without converting the motion to one for
summary judgment even when the documents are not physically attached to
the complaint. See Great Plains Trust Co. v. Morgan Stanley Dean Witter
& Co., 313 F.3d 305, 313 (5th Cir. 2002). The Court may also consider
documents attached to a motion to dismiss without converting the motion
into one for summary judgment if the documents are referred to in the
complaint and are central to the plaintiff’s claim. Causey v. Sewell Cadillac–
Chevrolet, Inc., 394 F.3d 285, 288 (5th Cir. 2004).
6

III. DISCUSSION
Louisiana law requires a public accountant review panel to review all
claims against certified public accountants or accounting firms. La. Stat.
Ann. § 37:102(A) (2016). In order to initiate the review, a claimant must
submit a request to the Society of Louisiana Certified Public Accountants.
See La. Stat. Ann. §§ 37:101, 37:102(B). A claimant may not bring an action
in court against an accountant or accounting firm before a panel has either
issued an opinion or, a claimant’s request for review has existed for more
than twelve months without a panel opinion. La. Stat. Ann. § 37:105-106. The
proper response to such a premature suit is dismissal without prejudice for
failure to state a claim upon which relief may be granted under Federal Rule
of Civil Procedure 12(b)(6). See, e.g., Barrack Children’s Irrevocable Trust
v. Pailet, No. 12-00784, 2012 WL 2513682, at *1-2 (E.D. La. June 27, 2012)
(holding that dismissal under Rule 12(b)(6) is proper when plaintiff files
premature claims against accountant without submitting claims to review
panel before filing suit).
Plaintiff has not received an opinion from a properly constituted
review panel of the Society of Louisiana Certified Public Accountants.
Although plaintiff did obtain a review of her claims from the State Board of

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Certified Public Accountants of Louisiana,22 Section 105 of the Louisiana
Accountancy Act requires review by the Society of Louisiana Certified Public
Accountants, a separate entity. See La. Stat. Ann. §§ 37:101, 37:102(B). Thus,
to the extent that plaintiff’s claims against the accountant defendants are
covered by the statute, they are premature and must be dismissed.
Plaintiff does not dispute that La. Stat. Ann. § 37:105 requires that
claims against accountants arising from the engagement of the accountants
proceed before the specified review panel before those claims can be litigated
in any other court. At issue here is whether plaintiff’s claims arise from the
engagement of the Pailet defendants and are therefore covered by the statute.
Because the Court finds that plaintiff’s claims are covered by the statute, the
Court dismisses plaintiff’s claims against the Pailet defendants as premature.
Ignoring the plain text of the statute, plaintiff argues that the Louisiana
Accountancy Act covers only claims for accountant malpractice, and only
those that arise specifically from an ongoing accountant-client relationship.
Because her claims are for fraud, negligence, and breach of fiduciary duties,
plaintiff argues they are not claims for accountant malpractice. Further,
despite the plain allegations of her complaint, plaintiff asserts in her brief

22

R. Doc. 23 at 1.
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that she was not a client of the Pailet defendants when the complained of
actions occurred.
The clear text of the statute is at odds with plaintiff’s arguments. In
Louisiana, “[l]egislation is a solemn expression of legislative will,” La. C.C.
art. 2, and thus is “superior to any other source of law.” La. C.C. art. 1. cmt.
(c). Therefore, “the starting place in interpreting any statute is the language
of the statute itself.” Moss v. State, 925 So. 2d 1185, 1197 (La. 2006). The
Louisiana Accountancy Act provides that “[a]ll claims against certified
public accountants or firms, other than claims validly agreed for submission
to a lawfully binding arbitration procedure, shall be reviewed by a public
accountant review panel established pursuant to R.S. 37:109.” La. Stat. Ann.
§ 37:102 (emphasis added). “Claim” is defined as
any cause of action against a certified public accountant or firm,
regardless of the legal basis of the claim, including but not
limited to tort, fraud, breach of contract, or any other legal basis,
arising out of any engagement to provide professional services,
including but not limited to the following:
(a) The providing of attest services as defined in R.S. 37:73(1)(a).
(b) The providing of business or financial advice.
(c) Advice relative to plans or actions to qualify for tax benefits
or otherwise reduce the amounts of tax owed.
(d) Advice relative to the structuring of pension or retirement or
insurance plans or other employee benefits.
(e) The provision, including design, of computer software for
accounting or bookkeeping functions.
(f) Any other advice relative to the conduct of any business
whether conducted for profit or not.
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Id. § 37:101 (emphasis added). Therefore, the plain language of the statute
would appear to cover any and all claims by plaintiff against the Pailet
defendants as long as they arise out of “any engagement to provide
professional services.” Id.
In arguing that the statute is implicitly limited to malpractice actions
related to an ongoing-client relationship, plaintiff analogizes to claims for
legal and medical malpractice.23 Her reliance is misplaced. Although courts
have limited legal and medical malpractice actions arising under Louisiana
law to those stemming from a client relationship, thus far no courts have
similarly limited the scope of the Louisiana Accountancy Act. In fact, case
law supports finding the scope as broad as the text implies, without
limitations as to malpractice or accountant-client relationship. See Adams
v. Kern, 987 So. 2d 879, 880-81 (La. App. 5 Cir. 2008) (noting that a review
panel heard claims by former member of LLC against LLC’s accountant even
though plaintiff was not client of accountant); Ortego v. Hickerson, 989 So.
2d 777, 780-81 (La. App. 3 Cir. 2008) (noting that lower court had found
defamation suit against accounting firm by non-client plaintiff to be
premature because there had been no review as required by the Louisiana
Accountancy Act); Sigma Delta, LLC v. George, No. 07-5427, 2008 WL

23

R. Doc. 45 at 4, 11-14.
10

1744801, at *1 (E.D. La. Apr. 11, 2008) (rejecting argument that accountantclient relationship is necessary under Louisiana Accountancy Act and finding
that “[t]he term ‘any engagement’ supports [defendant]’s position that the
review panel requirement applies even when the engagement was not with
the party who eventually files suit.”); Barrack Children’s, 2012 WL 2513682,
at *1-2 (dismissing breach of contract and negligence claims against
accountants as premature because plaintiffs did not first proceed before the
review panel pursuant to the Louisiana Accountancy Act).
Plaintiff correctly notes that the Louisiana Accountancy Act is a statute
in derogation of the rights of tort victims, and therefore “‘the coverage of the
act should be strictly construed.’” Taylor v. Ochsner Clinic Found., No. 111926, 11-2221, 2011 WL 6140885, at *4 (E.D. La. Dec. 9, 2011) (quoting
Williamson v. Hosp. Serv. Dist. No. 1, 888 So. 2d 782, 786 (La. 2004).
However, this canon of construction does not override the plain,
unambiguous text of the statute, and this Court will not read an implied
limitation into an unambiguous Louisiana state law without any instruction
from the Louisiana courts or legislature. Because the plain text of the
Louisiana Accountancy Act covers any claims arising from any engagement
to provide accounting services, plaintiff’s claims will be dismissed if they
arise from the engagement of the Pailet defendants.
11

From a review of the factual allegations in plaintiff’s complaint (which
must be accepted as true if well-pleaded), it is clear that her claims against
the Pailet defendants arise from their engagement. Plaintiff alleges that the
Pailet defendants are liable for fraud, negligence, and breach of fiduciary
duties.24 Specifically, plaintiff alleges that, given her status “as a client, the
Paliet [d]efendants owed the [plaintiff] various fiduciary, legal, and ethical
duties, which duties included refraining from any self-dealing or activity that
was contrary to the [plaintiff]’s best interests.

The acts of the Pailet

[d]efendants as described herein violated the fiduciary, legal, and ethical
duties owed to [plaintiff] . . . causing the [plaintiff] great harm and
damages.”25 Plaintiff plainly alleges that defendants “fiduciary, legal, and
ethical” duties to her arose from their representation of her as accountants
and the conduct complained of violated those duties.26 Plaintiff cannot
impeach the allegations of her own complaint, which must be accepted as
true, by attaching an affidavit to her response in opposition to this motion

R. Doc. 21 at 3 ¶ 48.
Id. ¶¶ 50-51.
26
To the extent that any of plaintiff’s claims arise out of the second
mortgage on the property at issue, these claims arise out of the engagement
of the Pailet defendants by defendant Carolyn Bickerstaff. See id. at 9 ¶¶ 87,
88. Thus, the Pailet defendants’ role as accountants would be a component
of the alleged wrongdoing and the claim would also require review by the
Society before it could be filed in any court. See In re Easterly Const. Co.,
Inc., 408 B.R. 627, 631 (Bankr. M.D. La. 2009).
12
24
25

attesting that she was not a client of the Pailet defendants because the Court’s
review is limited at this stage to the content of the pleadings. See Collins,
224 F.3d at 498.
Because plaintiff brings claims against a certified public accountant
and his firm that arise out of an engagement to provide professional services,
by law her claims must be brought before the Society of Louisiana Certified
Public Accountants before they can be filed in any court. Because plaintiff
failed to do, her claims against the Pailet defendants must be dismissed.

IV.

CONCLUSION
For the foregoing reasons, the Court GRANTS defendants’ motion to

dismiss and dismisses plaintiff’s claims against the Pailet defendants
WITHOUT PREJUDICE.

28th
New Orleans, Louisiana, this ___ day of December, 2016.
___________________________________
SARAH S. VANCE
UNITED STATES DISTRICT JUDGE

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