Jackson v. Great American Insurance Company

Filing 34

ORDER AND REASONS granting 31 Motion to Dismiss and this action and the claims raised therein are hereby DISMISSED. Signed by Judge Greg Gerard Guidry on 2/5/2024. (lag)

ORDER AND REASONS
The Court has before it Defendant Great American Insurance Company’s (“GAIC”)
Motion to Dismiss Plaintiff Leatha Jackson’s amended complaint, R. Doc. 30, pursuant to Federal
Rule of Civil Procedure 12(b)(6). R. Doc. 31. Plaintiff has filed a brief in opposition, R. Doc. 32,
and GAIC has submitted a reply memorandum. Having considered the parties’ briefing, as well as
the applicable law and facts, the Court will GRANT GAIC’s Motion.
I.

BACKGROUND

This case arises from damage to a property owned by Plaintiff (the “Residence”) resulting
from Hurricane Ida on August 29, 2021. R. Doc. 1 at 3. At that time, the Residence was covered
by a force-placed insurance policy issued by GAIC to the mortgagee, Carrington Mortgage
Services, LLC (“Carrington”), but to which Plaintiff was not a party nor included as an additional
insured or third-party beneficiary (the “Policy”). Id. at 2; R. Doc. 23 at 1–2. Plaintiff nonetheless
filed the instant action against GAIC, asserting it failed to compensate her fully for the loss she
incurred due to hurricane damage to the Residence and seeking damages for this alleged breach of
contract, as well as bad faith penalties under La. R.S. §§ 22:1892 and 22:1973. Id. at 7–9. Upon
motion by GAIC, this Court dismissed Plaintiff’s first complaint, holding Plaintiff lacked standing
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to raise those claims because she is not a named insured, an additional named insured, or an
intended third-party beneficiary of the Policy between GAIC and Carrington. R. Doc. 29; see also
Williams v. Certain Underwriters at Lloyd’s of London, 398 Fed. App’x 44, 47 (5th Cir. 2010).
However, the Court granted Plaintiff’s request for leave to amend her complaint to assert a claim
that the Policy should be “reformed” to include her as a third-party beneficiary. Plaintiff filed an
amended complaint, asserting her claim for reformation, as well as a new claim for detrimental
reliance. GAIC now moves the Court to dismiss Plaintiff’s amended complaint, arguing she has
failed to state a claim for detrimental reliance or reformation upon which relief can be granted and
thus still fails to plead plausibly that she has standing under the Policy to raise the instant claims.
II.

APPLICABLE LAW

Rule 12(b)(6) provides that an action may be dismissed “for failure to state a claim upon
which relief can be granted.” To survive a motion to dismiss under Rule 12(b)(6), a “complaint
must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible
on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly,
550 U.S. 544, 570 (2007)). A court’s task in considering whether a plaintiff has stated a plausible
claim to relief is to “determine whether the plaintiff has stated a legally cognizable claim that is
plausible, not to evaluate the plaintiff’s likelihood of success.” Body by Cook, Inc. v. State Farm
Mut. Auto. Ins., 869 F.3d 381, 385 (5th Cir. 2017) (citing Doe ex rel. Magee v. Covington Cty.
Sch. Dist. ex rel. Keys, 675 F.3d 849, 854 (5th Cir. 2012)). Thus, courts must construe the
allegations in the complaint in the light most favorable to the plaintiff, accepting as true all wellpleaded factual allegations and drawing all reasonable inferences in the plaintiff’s favor. Lovick v.
Ritemoney Ltd., 378 F.3d 433, 437 (5th Cir. 2004) (citing Herrmann Holdings Ltd. v. Lucent
Techs., Inc., 302 F.3d 552, 558 (5th Cir. 2002)). A complaint need not contain detailed factual
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allegations, but must offer more than mere labels, legal conclusions, or formulaic recitations of the
elements of a cause of action. Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 570). However,
a complaint is insufficient if it contains merely “‘naked assertion[s]’ devoid of ‘further factual
enhancement.’” Id. (quoting Twombly, 550 U.S. at 557). If the factual allegations are insufficient
to raise a right to relief above the speculative level, the claim should be dismissed. Twombly, 550
U.S. at 555.
III.

DISCUSSION

The equitable remedy of reformation is available under Louisiana law only where “a
contract between the parties fails to express their true intent, either because of mutual mistake or
fraud.” 1 In re Liljeberg Enterprises, Inc., 304 F.3d 410, 442 (5th Cir. 2002) (quoting Edwards v.
Your Credit Inc., 148 F.3d 427, 436 (5th Cir.1998)). To demonstrate that reformation is warranted,
the movant must show, “by clear and convincing evidence, that a mutual mistake has been made.”
Weyerhaeuser Co. v. Burlington Ins. Co., 74 F.4th 275, 288 (5th Cir. 2023) (citing Motors Ins. Co.
v. Bud's Boat Rental, Inc., 917 F.2d 199, 203 (5th Cir. 1990)). Accordingly, to survive Rule
12(b)(6) review, Plaintiff must at least plausibly allege that a “mutual mistake” between GAIC and
Carrington resulted in her omission as a beneficiary under the Policy despite the intent of those
parties to include her as such.
In her amended complaint, Plaintiff makes only two factual allegations in support of her
claim for reformation of the contract. She asserts that in September 2021, GAIC sent her a letter
stating it “received notice of your loss” and that a field adjustor had been assigned to inspect the
Residence, with “no mention of Plaintiff not being an insured and/or beneficiary under the subject

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Plaintiff does not make any allegations of fraud.

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policy.” R. Doc. 30 at 1; see also R. Doc. 30-1. Subsequently, in February 2022, GAIC sent a letter
to Plaintiff’s prior counsel regarding Plaintiff’s claim, similarly without mention that Plaintiff was
not an insured or beneficiary under the Policy. Id. at 2; see also R. Doc. 30-2. These facts, even
construed in the light most favorable to the Plaintiff and drawing all reasonable inferences in her
favor, do not support Plaintiff’s claim that she was excluded as a beneficiary to the Policy due to
a mutual mistake between GAIC and Carrington. Thus, Plaintiff has failed to state a claim for
reformation upon which relief can be granted. Plaintiff is not covered by the Policy and has no
standing to assert the breach of contract or bad faith claims she raises in this action.
Perhaps anticipating this result, Plaintiff has also raised in her amended complaint a new
claim for detrimental reliance, asserting she “relied on [GAIC]’s treatment of her as an insured
and/or beneficiary under the Policy when spending her own money to make repairs to the home”
and thereby sustained monetary damages. R. Doc. 30 at 2. In order to raise a claim for detrimental
reliance sufficient to survive Rule 12(b)(6) review, Plaintiff must plausibly allege: “(1) a
representation by conduct or word, (2) justifiable reliance on the representation, and (3) a change
in position to the plaintiff's detriment as a result of the reliance.” Drs. Bethea, Moustoukas and
Weaver LLC v. St. Paul Guardian Ins. Co., 376 F.3d 399, 403 (5th Cir. 2004). In support of this
claim, Plaintiff again points to the two letters from GAIC discussed supra. These letters were sent
to Plaintiff and her former counsel in an effort to schedule a time for an adjustor to inspect the
Residence for hurricane damage because GAIC covered the Residence, and Plaintiff lived there.
But both of these letters explicitly identify “Our Insured” as “Carrington Mortgage Services,
LLC[,]” and indicate in no way that Plaintiff is included under the Policy. The fact that these letters
do not state outright that Plaintiff is not included under the Policy do not render them
“representations” to Plaintiff that she was included. Even assuming Plaintiff construed them as
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such, any reliance she placed on that unreasonable interpretation could not have been justifiable.
Accordingly, Plaintiff also fails to state a plausible claim for detrimental reliance. This claim must
also be dismissed.
IV.

CONCLUSION

For the foregoing reasons, IT IS ORDERED that GAIC’s Motion to Dismiss, R. Doc. 31,
is GRANTED and that this action and the claims raised therein are hereby DISMISSED.

New Orleans, Louisiana, this 5th day of February, 2024.

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