Robertson v. Sun Life Financial et al

Filing 48

ORDER AND REASONS denying 38 amended Motion to Remand as stated herein. Signed by Judge Sarah S. Vance on 1/22/2018. (cg)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
LEVI E. ROBERTSON, on behalf of
himself and all other similarly
situated
VERSUS

CIVIL ACTION

NO. 17-2148

SUN LIFE FINANCIAL, ET AL.

SECTION “R” (1)

ORDER AND REASONS
Before the Court is plaintiff’s amended motion to remand. 1 For the
following reasons, the Court denies the motion.
I.

BACKGROUND
This case arises out of allegedly fraudulent withdrawals from Plaintiff

Levi Robertson’s annuity account. 2 Robertson asserts that he entered into a
ten-year annuity contract with Defendant Sun Life Assurance Company of
Canada in July 2005.3 According to Robertson’s first state court petition,
Defendant Matthew Pizzolato forged a check for $99,999.99 in Robertson’s

1
2
3

R. Doc. 38.
R. Doc. 1-1 at 2-4; R. Doc. 1-6 at 2-5.
R. Doc. 1-4 at 3.

name, and Sun Life negligently permitted a withdrawal in this amount from
Robertson’s account without contacting him to verify the transaction. 4
On October 9, 2008, Robertson filed a petition for damages in state
court against Sun Life Financial, Sun Life Assurance Company of Canada,
Sun Life Administrators, Wachovia Bank, Capitol One Bank, and Matthew
Pizzolato. 5 Sun Life Financial, Sun Life Administrators, and Capitol One
Bank have since been dismissed from this litigation. 6 Sun Life Assurance
Company (Sun Life) represents that neither Wachovia Bank nor Matthew
Pizzolato entered an appearance or filed an answer in state court. 7 The
record reflects that the Tangipahoa Parish Sheriff’s Office attempted to serve
Pizzolato on October 15, 2008, but service was unsuccessful. 8 On April 1,
2010, Pizzolato pleaded guilty in federal court to multiple counts of mail
fraud and other offenses. 9

Pizzolato was sentenced to 30 years

imprisonment on July 22, 2010.10
Robertson amended his petition three times between April 2009 and
March 2012 to include additional allegations regarding Pizzolato’s

4
5
6
7
8
9
10

R. Doc. 1-1 at 2-3.
Id. at 2.
R. Doc. 1 at 2; R.Doc. 1-8 at 4-5; R. Doc. 1-10 at 4.
R. Doc. 1 at 2.
R. Doc. 20-1 at 6.
R. Doc. 38-3 at 1.
Id. at 1-2.
2

fraudulent activities and Sun Life’s breach of contract and negligence in
failing to monitor Robertson’s account properly. 11 On February 27, 2017, the
state court gave Robertson leave to file a fourth amended petition to assert
racketeering claims and to request that the case proceed as a class action.12
Robertson’s fourth amended petition asserts claims under the federal
Racketeer Influenced and Corrupt Organizations Act (RICO) and the
Louisiana Racketeering Act.13 Robertson alleges that Sun Life conducted or
acquired a racketeering enterprise through its agent, Sherel Pizzolato.14
According to the petition, this enterprise involved setting up individual
retirement accounts with Sun Life and then transferring money from these
accounts to unsafe and fraudulent companies and accounts created by Sherel
Pizzolato and his son, Matthew Pizzolato. 15 Robertson asserts that other
investors were similarly affected by this enterprise, and he seeks to bring his
claims as a class action. 16
On March 15, 2017, Sun Life removed the case to this Court on the basis
of federal question jurisdiction under 28 U.S.C. § 1331 and class action

11
12
13
14
15
16

R. Doc. 1-2; R. Doc. 1-3; R. Doc. 1-4.
R. Doc. 1-7 at 2.
R. Doc. 1-6 at 3 ¶¶ 27-28.
Id. at 2 ¶¶ 19-21.
Id. at 2 ¶ 21.
Id. at 3-4 ¶¶ 31-32.
3

jurisdiction under 28 U.S.C. § 1332(d). 17 On September 22, 2017, the Court
dismissed Robertson’s state and federal racketeering claims as timebarred.18 Robertson now moves to remand to state court. 19

II.

DISCUSSION
Robertson argues that this matter should be remanded because the

Court dismissed his sole federal claim and this matter falls within the local
controversy exception to the Class Action Fairness Act (CAFA). 20 Sun Life
opposes remand and contends that the Court retains federal jurisdiction
under CAFA.21
A.

Class Action Fairness Act

CAFA grants federal courts original jurisdiction over class actions in
which the matter in controversy exceeds $5 million, at least one plaintiff class
member is diverse from at least one defendant, and there are at least 100
proposed class members. 28 U.S.C. § 1332(d). To determine whether a class
action meets the $5 million threshold, “the claims of the individual class
members shall be aggregated.” 28 U.S.C. § 1332(d)(6). CAFA jurisdiction

17
18
19
20
21

R. Doc. 1.
R. Doc. 32.
R. Doc. 38.
Id.
R. Doc. 39.
4

“depends on the pleadings at the time the class action is removed.” Cedar
Lodge Plantation, LLC v. CSHV Fairway View I, LLC, 768 F.3d 425, 426
(5th Cir. 2014).
Robertson does not contest that his class action complaint met the
prima facie requirements for CAFA jurisdiction at the time of removal. 22
Minimal diversity exists because Robertson is a citizen of Louisiana and Sun
Life is a citizen of Delaware and Massachusetts. 23 Robertson’s class action
complaint asserts that the number of persons damaged by the activities
described in the lawsuit “is reasonably believed to [be] numerous as the State
of Louisiana identified approximately 160 investors with losses of
approximately $19.5 million when prosecuting Matthew Pizzolato for his role
in this enterprise.”24 Robertson asserts claims under federal and state
racketeering laws, and requests “general, special, and punitive and/or
exemplary damages.” 25 The Court finds that the complaint makes it facially
apparent that this matter involves at least 100 proposed class members and
over $5 million in controversy. See Frazier v. Pioneer Americas LLC, 455

22
23
24
25

R. Doc. 38-1 at 3.
R. Doc. 1 at 4-5 § 14; R. Doc. 1-1 at 2,
R. Doc. 1-6 at 4 ¶ 33.
Id. at 3-4.
5

F.3d 542, 545 (5th Cir. 2006); Allen v. R & H Oil & Gas Co., 63 F.3d 1326,
1336 (5th Cir. 1995). Thus, this matter satisfies CAFA’s prima facie criteria.
B.

Local Controversy Exception

Robertson argues that the Court nevertheless lacks class action
jurisdiction because of CAFA’s local controversy exception. 26 This provision
requires federal courts to decline jurisdiction when a case satisfies four
requirements: (1) more than two-thirds of the proposed class members are
citizens of the original forum state; (2) the plaintiff class seeks “significant
relief” from at least one defendant who is a citizen of the original forum and
whose alleged conduct forms a significant basis for the claims asserted; (3)
the “principal injuries resulting from the alleged conduct or any related
conduct of each defendant were incurred” in the original forum; and (4) no
similar class action has been filed in the three-year period preceding the
filing of the class action. 28 U.S.C. § 1332(d)(4)(A). The local controversy
exception is “intended to be narrow, with all doubts resolved in favor of
exercising jurisdiction over the case.”

Opelousas Gen. Hosp. Auth. v.

FairPay Solu., Inc., 655 F.3d 358, 360 (5th Cir. 2011) (internal citation
omitted). The plaintiff bears the burden of establishing that the exception
applies. Id.; see also Frazier, 455 F.3d at 546.

26

R. Doc. 38.
6

The parties primarily dispute the existence of a significant local
defendant. Robertson asserts that the plaintiff class seeks significant relief
from Matthew Pizzolato, a citizen of Louisiana whose actions are central to
the suit. 27

The Court finds that Matthew Pizzolato’s conduct forms a

significant basis for the class claims because he is alleged to have worked in
concert with his father, Sherel Pizzolato, to set up the fraudulent companies
and accounts that harmed putative class members.28 Matthew Pizzolato’s
conduct appears to have affected all members of the putative class.29 Cf.
Opelousas Gen. Hops. Auth., 655 F.3d at 362.
But Robertson has not satisfied his burden of demonstrating that
Matthew Pizzolato is a defendant “from whom significant relief is sought by
members of the plaintiff class.” 28 U.S.C. § 1332(d)(4)(II)(aa). The class
action complaint names Sun Life Financial, Sun Life Assurance Company,
and Sun Life Administrators as “Racketeering Defendants.”30 Matthew
Pizzolato is not a named racketeering defendant. The complaint asserts that
the Racketeering Defendants conducted a racketeering enterprise through
their agent, Sherel Pizzolato. 31 The class action allegations are directed at

27
28
29
30
31

R. Doc. 38-1 at 3-4.
R. Doc. 1-6 at 2 ¶¶ 21-22, 3 ¶ 31.
Id. at 4 ¶ 33.
Id. at 2 ¶ 19.
Id. at 2 ¶¶ 19-21.
7

the Racketeering Defendants, not Matthew Pizzolato.

Specifically, the

complaint asserts that “Mr. Robertson was not the only person affected by
the

Racketeering

Defendants[’]

actions;

rather,

the

Racketeering

Defendants’ and Sherel Pizzolato’s actions and scheme . . . was far
reaching.”32 Robertson further alleges that he is “aware of at least two other
investors similarly situated where the Racketeering Defendants[] and Sherel
Pizzolato[] acted and schemed to consult, advise, implement the business
enterprise of setting up retirement accounts with Sun Life and then
proceeded to make withdrawals from the accounts to unsafe, unsecured, and
ultimately fraudulent companies and accounts.”33 The complaint states that
the class members share “common causes of action, including state and
federal racketeering laws.” 34
On the face of the complaint, Robertson asserts federal and state
racketeering claims against Sun Life on behalf of a class of similarly situated
investors.35 The complaint does not identify any other class-wide causes of
action.

Although Matthew Pizzolato is mentioned several times in the

Id. at 3 ¶ 31.
Id. at 3-4 ¶ 32.
34
Id. at 4 ¶ 32.
35
That the Court later dismissed Robertson’s racketeering claims is
immaterial because CAFA jurisdiction is determined at the time of removal.
See Cedar Lodge, 768 F.3d at 426-27.
8
32
33

complaint, he is not named as one of the Racketeering Defendants and does
not appear to be the target of the class claims. That Robertson seeks to
recover from Sun Life based on Sherel Pizzolato’s and Matthew Pizzolato’s
alleged misconduct does not transform the Pizzolatos into racketeering
defendants. See, e.g., Reves v. Ernst & Young, 507 U.S. 170, 183 (1993)
(holding that a defendant is not liable under 18 U.S.C. § 1962(c) of RICO
“unless [he] has participated in the operation or management of the
enterprise itself”). Robertson’s RICO Case Statement confirms that Sun Life
is the sole RICO defendant, and Sherel Pizzolato and Matthew Pizzolato are
non-defendant alleged wrongdoers. 36
The sole indication that Matthew Pizzolato is a defendant in the class
action is the complaint’s conclusory statement that “petitioner seeks
significant relief from a defendant that is in the State of Louisiana, namely,
Matthew Pizzolato.” 37 This bare assertion fails to satisfy Robertson’s burden
of proof to show the applicability of the local controversy exception. In the
absence of an identifiable class-wide cause of action against Matthew
Pizzolato, Robertson’s generic demand for damages from each of the

36
37

R. Doc. 5 at 1-2 ¶ 2-3; R. Doc. 22 at 1-2 ¶ 2-3.
R. Doc. 1-6 at 4 ¶ 34.
9

defendants38 is insufficient to demonstrate that the class seeks significant
relief from Matthew Pizzolato individually.
Further, Robertson has failed to establish that Matthew Pizzolato
remained a defendant to any claim at the time of removal.

Although

Robertson’s 2008 petition named Matthew Pizzolato as a defendant, Sun
Life represents that Pizzolato was never served with process, never appeared
in state court, and never participated in discovery.39 Robertson does not
dispute these representations. The class action complaint requests service
on Sun Life’s attorney, but does not request service on Pizzolato. 40 Under
Louisiana law, “[a]n action . . . is abandoned when the parties fail to take any
step in its prosecution or defense in the trial court for a period of three years.”
La. Code Civ. Proc. art. 561(A)(1). Abandonment “occurs automatically upon
the passing of three-years without a step being taken by either party, and it
is effective without court order.” Clark v. State Farm Mut. Auto. Ins. Co.,
785 So. 2d 779, 784 (La. 2001); see also La. Code Civ. Proc. art. 561(A)(3). A
plaintiff’s “post-abandonment actions cannot serve to revive an abandoned
action.” Clark, 785 So. 2d at 789.

38
39
40

Id. at 4.
R. Doc. 1 at 6 ¶ 16; R. Doc. 39 at 3, 10.
R. Doc. 1-6 at 5.
10

It is undisputed that Robertson failed to take any steps to prosecute his
case against Pizzolato for over three years before filing his class action
complaint. Pizzolato never participated in this litigation, and has therefore
not taken any steps in his defense.

Louisiana law recognizes “two

jurisprudential exceptions to the abandonment rule.” Clark, 785 So. 2d at
784. These exceptions apply when the plaintiff’s “failure to prosecute is
caused by circumstances beyond the plaintiff’s control,” or the “defendant
waives his right to assert abandonment by taking actions inconsistent with
an intent to treat the case as abandoned.” Id. at 784-85. Robertson does not
suggest that either of these exceptions applies, nor does he provide any
explanation for his failure to serve Pizzolato. 41
Robertson instead argues that the abandonment statute applies to
actions rather than parties, and therefore any step by any party precludes
abandonment as to all parties.42 The Louisiana Supreme Court has held that
“[w]hen any party to a lawsuit takes formal action in the trial court, it is
effective as to all parties.” Delta Dev. Co., Inc. v. Jurgens, 456 So. 2d 145,
146 (La. 1984). This rule applies to unserved parties if the unserved party

Robertson asserts that his decision not to seek a default judgment
against Pizzolato could be strategic, but he does not explain the lack of
service. See R. Doc. 38-1 at 6.
42
R. Doc. 44 at 1.
11
41

has participated in the litigation through discovery. See Bissett v. Allstate
Ins. Co., 567 So. 2d 598 (La. 1990); Bissett v. Allstate Ins. Co., 560 So. 2d
884, 886-87 (La. App. 1 Cir. 1990) (Shortess, J., dissenting); see also Bridges
v. Wilcoxon, 786 So. 2d 264, 268 (La. App. 2 Cir. 2001).
But the Louisiana Supreme Court has not addressed whether a step in
the prosecution of a case against an active defendant interrupts
abandonment as to defendants who have never been served, never appeared,
and never participated in discovery or any other aspect of the litigation.
Robertson filed his case in Tangipahoa Parish, in Louisiana’s First Circuit.43
The state Court of Appeal for the First Circuit has held that the “law of [the]
circuit” is that “a step in the prosecution or defense of a case is ineffective as
to unserved defendants.” Stevens v. Chen, No. 2011 CA 1486, 2012 WL
2060878, at *5 (La. App. 1 Cir. 2012) (emphasis in original); see also Murphy
v. Hurdle Planting & Livestock, 331 So. 2d 566, 568 (La. App. 1 Cir. 1976).
The Court therefore finds it more likely than not that Robertson’s state court
action against Pizzolato was automatically abandoned before the class action
complaint was filed, and before this case was removed.
In sum, Robertson has failed to satisfy his burden of demonstrating
that the putative class seeks significant relief from Matthew Pizzolato. The

43

R. Doc. 1-1.
12

class action complaint asserts racketeering claims against Sun Life, not
Pizzolato, and Robertson has failed to identify any class-wide cause of action
against Pizzolato. Moreover, Robertson’s case against Pizzolato appears
abandoned as a matter of Louisiana law. Because this matter does not satisfy
the requirements of the local controversy exception, the Court retains CAFA
jurisdiction. The motion to remand must be denied.

III. CONCLUSION
For the foregoing reasons, the Court DENIES the motion to remand.

New Orleans, Louisiana, this _____ day of January, 2018.
22nd

_____________________
SARAH S. VANCE
UNITED STATES DISTRICT JUDGE

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