Okpalobi v. American National Property and Casualty Company et al

Filing 35

ORDER AND REASONS denying 18 PHH Mortgage Coroporation's FRCP 12(b)(1) Motion to Dismiss for Lack of Standing and 25 Mortgage Assets Management, LLC's Motion to Dismiss for Lack of Standing. FURTHER ORDERED that 18 PHH Mortgage Corpo ration's FRCP 12(b)(6) Motion to Dismiss for Failure to State a Claim and 25 Mortgage Assets Management, LLC's Motion to Dismiss with Prejudice for Failure to State a Claim are denied without prejudice. Plaintiff is granted leave to amen d the Complaint within fourteen days of this Order to cure the deficiencies noted, if possible. If upon amendment, Plaintiff fails to provide sufficient factual support for each element of each claim, upon motion by a party, the Court will dismiss th e claims. FURTHER ORDERED that 30 Mortgage Assets Management, LLC's Motion to Opt Out of the Streamlined Settlement Program is granted. FURTHER ORDERED that Plaintiff Rose Okpalobi's 23 Motion to Strike Defendant PHH Mortgage Corporation's Motion to Dismiss for Lack of Standing and 31 Cross Motion to Strike MAM's Motion to Opt Out of the Streamlined Settlement Program are denied. Signed by Chief Judge Nannette Jolivette Brown on 05/08/2024. (ko)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
ROSE OKPALOBI

CIVIL ACTION

VERSUS

NO. 23-6691

AMERICAN NATIONAL PROPERTY AND
CASUALTY COMPANY, et al.

SECTION: “G”(5)

ORDER AND REASONS
Before the Court are Defendant PHH Mortgage Corporation’s (“PHH”) FRCP 12(b)(6)
Motion to Dismiss for Failure to State a Claim and FRCP 12(b)(1) Motion to Dismiss for Lack of
Standing, 1 Defendant Mortgage Assets Management, LLC’s (“MAM”) “Motion to Dismiss with
Prejudice for Failure to State a Claim and Motion to Dismiss for Lack of Standing,” 2 Plaintiff Rose
Okpalobi’s (“Plaintiff”) Motion to Strike Defendant PHH Mortgage Corporation’s Motion to
Dismiss for Lack of Standing, 3 MAM’s Motion to Opt Out of the Streamlined Settlement
Program, 4 and Plaintiff’s Cross Motion to Strike MAM’s Motion to Opt Out of the Streamlined
Settlement Program. 5 PHH and MAM contend that Plaintiff does not have standing to bring the
claims in the Petition against them in her individual capacity in this Hurricane Ida litigation. 6 PHH

1

Rec. Doc. 18.

2

Rec. Doc. 25.

3

Rec. Doc. 23.

4

Rec. Doc. 30.

5

Rec. Doc. 31.

6

Rec. Docs. 18, 23.

1

and MAM also contend that Plaintiff fails to state any viable claim against PHH and MAM. 7
Plaintiff opposes, contending that she has standing to bring this suit in her individual capacity
against PHH and MAM. 8 She also contends that she has sufficiently alleged claims against PHH
and MAM. 9 Having considered the motions, the memoranda in support and in opposition, the
record, and the applicable law, the Court grants MAM’s Motion to Opt Out of the Streamlined
Settlement Program. The Court denies PHH’s Motion to Dismiss under Rule 12(b)(6) and MAM’s
Motion to Dismiss under Rule 12(b)(6) without prejudice and grants Plaintiff leave to file an
Amended Complaint. If upon amendment, Plaintiff fails to provide sufficient factual support for
each element of each claim, upon motion by a party, the Court will dismiss the claims. The Court
also denies Plaintiff’s Motion to Strike PHH’s Motion to Dismiss and her Motion to Strike MAM’s
Motion to Opt out of the Streamlined Settlement Program.
I. Background
A.

Factual Background
This litigation arises out of property damage caused by Hurricane Ida on August 29, 2021. 10

Plaintiff Rose Okpalobi, individually and on behalf of the Estate of Ifeanyi Charles Anthony
Okpalobi filed a Petition in the Civil District Court for the Parish of Orleans on August 29, 2023
against Defendants PHH Mortgage Corporation (“PHH”), Champion Mortgage Company, Inc.
(“Champion”), Mortgage Assets Management LLC (“MAM”), and American National Property
and Casualty Company (“ANPAC”) to recover damages related to the property at 4928 Cartier

7

Rec. Docs. 18, 23.

8

Rec. Docs. 23, 24, 31, 32,

9

Rec. Docs. 23, 24, 31, 32.

10

Rec. Doc. 1-9 at 3.

2

Avenue, New Orleans, LA 70122 (“Property”). 11 MAM was formerly known as Reverse Mortgage
Solutions, Inc. 12 In the Petition, Plaintiff alleges that the Property sustained damage as a result of
Hurricane Ida. 13
According to Plaintiff, PHH, Champion, and MAM (collectively, “Mortgage Companies”),
serviced the mortgage on the Property. 14 Plaintiff alleges that these Mortgage Companies took out
Policy Number AMJ0079021 (“Policy”) with ANPAC for the Property as part of Plaintiff’s
mortgage, but these Mortgage Companies “intentionally failed and refused to make a claim on the
policy…” after the Property sustained damage caused by Hurricane Ida. 15 Plaintiff brings a breach
of fiduciary duty claim against PHH, Champion, and Mortgage Assets, asserting that they owed a
fiduciary duty to Plaintiff because Plaintiff is a third-party beneficiary of the Policy. 16 Plaintiff
also brings a negligence claim against PHH, Champion, and Mortgage Assets, asserting that they
intentionally failed to file a claim on the Policy after Plaintiff notified them that Hurricane Ida
caused damage to the Property. 17 Plaintiff also asserts a breach of insurance contract claim and
claims for violations of Louisiana Revised Statute Sections 22:1892 and 22:1973 against all
Defendants as a result of Defendants’ alleged failure to timely pay insurance proceeds due under
the Policy. 18

11

Id. at 1–2.

12

Id. at 2.

13

Id. at 3.

14

Id. at 3.

15

Id. at 3, 5.

16

Id. at 6–7.

17

Id. at 7.

18

Id. at 8–10.

3

B.

Procedural Background
On November 3, 2023, ANPAC removed the case to this Court under 28 U.S.C.

§ 1332(a). 19 On January 3, 2024, ANPAC filed a Motion to Dismiss, and Plaintiff filed an
opposition on January 15, 2024. 20 On February 28, 2024, the Court granted ANPAC’s motion and
dismissed ANPAC as a defendant. 21
On January 24, 2024, PHH filed the instant Motion to Dismiss based on Rules 12(b)(1) and
12(b)(6). 22 On February 6, 2024, Plaintiff filed an opposition to PHH’s Motion and also filed a
Motion to Strike PHH’s Motion. 23 On February 14, 2024, PHH filed an opposition to Plaintiff’s
Motion to Strike. 24 On February 9, 2024, MAM filed the instant Motion to Dismiss 25 and Motion
to Opt Out of the Streamlined Settlement Program. 26 On February 23, 2024, Plaintiff filed an
opposition to MAM’s Motion to Dismiss 27 and also filed a Motion to Strike MAM’s Motion to
Opt Out of the SSP. 28 On March 4, 2023, MAM filed a reply to Plaintiff’s opposition to its Motion
to Dismiss. 29

19

Rec. Doc. 1.

20

Rec. Docs. 8, 11.

21

Rec. Doc. 33.

22

Rec. Doc. 18.

23

Rec. Docs. 23, 24.

24

Rec. Doc. 27.

25

Rec. Doc. 25.

26

Rec. Doc. 30.

27

Rec. Doc. 32.

28

Rec. Doc. 31.

29

Rec. Doc. 34.

4

II. Parties’ Arguments
A.

Cross-Motions Addressing Plaintiff’s Standing to Bring Claims in Her Indvidual
Capacity Under Federal Rule of Civil Procedure 12(b)(1)
1.

PHH’s Arguments in Support of its Motion

PHH contends that Plaintiff Rose Okpalobi does not have standing to sue in her individual
capacity because she does not own the Property, is not a party to the mortgage loan, and is not a
named insured under the ANPAC insurance policy. 30 PHH notes that Plaintiff is suing PHH in
both her individual capacity and as the Executrix of the Estate of Ifeanyi Charles Anthony
Okpalobi (“Borrower”). 31 PHH notes that after Borrower passed away on November 15, 2018, a
Petition for Probate of Statutory Testament was filed in the Civil District Court for Orleans Parish
and the presiding judge in this succession case entered an order confirming Rose Okpalobi as the
Executrix of Borrower’s estate. 32 PHH further contends that though Borrower’s two vehicles and
unspecified contents located at 3028 and 30230 Gentilly Blvd, New Orleans, Louisiana, were
placed into the possession of Rose Okpalobi, the November 16, 2021 Order on Judgment of
Possession is silent as to Plaintiff’s ownership of the Property. 33 PHH notes that no other
judgments have been entered in that case. 34 PHH concludes that Rose Okpalobi does not have
standing to bring this matter in her individual capacity as she does not have title to the Property.35

30

Rec. Doc. 18-1 at 5.

31

Id.

32

Id. at 5–6.

33

Id. at 6.

34

Id.

35

Id.

5

2.

Plaintiff’s Opposition to PHH’s Motion

Plaintiff filed an opposition to PHH’s motion, contending that she has standing to sue in
her individual capacity because she is a part owner of the Property, as it was bequeathed to her by
her husband in his last will dated March 16, 2018. 36 PHH also notes that Plaintiff is an executor of
a Corporate Assignment of Mortgage for the Property and she is the Executrix of Borrower’s
estate, “which is a third-party beneficiary of the insurance policy provided by ANPAC.” 37 Plaintiff
further contends that this issue of ownership of the Property is not for this Court to adjudicate. 38
According to Plaintiff, “when succession documents are silent, a reservation or deference is made
to Louisiana Succession Law.” 39 Plaintiff posits that she is “a legal usufructuary since she was the
legally married spouse before death and surviving spouse.” 40 Plaintiff asserts that she has met the
requirements of standing under Article III of the U.S. Constitution to bring these claims against
PHH. 41 Plaintiff also contends that she has standing because she is a third-party beneficiary of the
Insurance Policy. 42
3.

MAM’s Arguments in Support of its Motion

MAM similarly contends that Plaintiff does not have standing to sue in her individual
capacity because she “does not own the Property, she is not a party to the contract, and she is not

36

Rec. Doc. 24 at 3.

37

Id.

38

Id.

39

Id.

40

Id.

41

Id.

42

Id. at 4–6.

6

named as an insured under the Insurance Policy issued by ANPAC. 43
4.

Plaintiff’s Opposition to MAM’s Motion

In her opposition to MAM’s Motion, Plaintiff raises the same arguments from her
opposition to PHH’s motion. 44
5.

MAM’s Reply

In its reply, MAM reiterates that “Plaintiff does not have standing since Plaintiff does not
own the Property, she is not a party to the mortgage loan at issue, and she is not an Insured under
the ANPAC policy at issue …” 45 MAM asserts that Plaintiff lacks standing to assert a claim, not
standing to sue under Article III as Plaintiff posits. 46
B.

Cross Motions Addressing Pleading Insufficiencies Under Federal Rule of Civil
Procedure 12(b)(6)
1.

PHH’s Arguments in Support of its Motion
a.

The Breach of Contract Claim

PHH argues that Plaintiff fails to allege a breach of contract claim because she fails to
identify a specific provision in the Insurance Policy that requires PHH to pursue a claim against
ANPAC. 47 PHH further argues that the plain language of the mortgage contract states that PHH is
not obligated to pursue a claim against ANPAC, as it states that “[i]n the event of loss, Borrower
shall give prompt notice to the insurance carrier and Lender. Lender may make proof of loss if

43

Rec. Doc. 25-1 at 4.

44

Rec. Doc. 32 at 2–6.

45

Rec. Doc. 34 at 2.

46

Id.

47

Rec. Doc. 18-1 at 6.

7

note made promptly by Borrower.” 48 PHH contends that “may” in this clause gives PHH the option
to assert a claim but does not require it to assert a claim. 49
b.

The Breach of Fiduciary Duty Claim

PHH also argues that Plaintiff fails to state a breach of fiduciary duty claim because
Plaintiff did not allege a “special relationship of trust and confidence and an advantage that the
defendant had over the plaintiff” in the Petition. 50 PHH further contends that Louisiana law
requires a written agreement between a financial institution and a customer of the financial
institution in which the parties agree that the financial institution acts as a fiduciary. 51 PHH notes
that Plaintiff’s Petition does not state any facts related to the existence of such a written agreement
for PHH to be Plaintiff’s fiduciary. 52 PHH notes that courts have rejected breach of fiduciary
claims brought by mortgagors against their mortgage lenders for not pursuing insurance claims for
damage to the mortgagees’ property. 53
PHH points to the Louisiana Credit Agreement Statute, La. Rev. Stat. Section 6:1121 et
seq. (“LCAS”) as barring Plaintiff’s claims against PHH because they are not based on a valid
written credit agreement. 54 According to PHH, “[t]he Louisiana Supreme Court has interpreted the
LCAS to bar all claims against creditors that are not based on written credit agreements, regardless

48

Id. at 7.

49

Id.

50

Id.

51

Id. at 8.

52

Id.

53

Id. at 9.

54

Id. at 9–10.

8

of the legal theory the debtor purports to assign to those claims.” 55 Further, PHH asserts that “[t]he
LCAS makes it clear that no unwritten agreement between a creditor and a debtor may be created
or implied.” 56
d.

Attorneys’ Fees

PHH avers that Plaintiff is not entitled to attorneys’ fees because she has not identified any
statute or contractual provision that would allow her to collect attorneys’ fees in this matter. 57
e.

The Statutory Bad Faith Claims

PHH contends that La. Rev. Stat. Sections 22:1892 and 22:1927 are not applicable because
PHH is not an insurer as it is a mortgage lender and Plaintiff has not alleged that PHH is an
insurer. 58
2.

Plaintiff’s Opposition to PHH’s Motion
a.

The Breach of Contract and Breach of Fiduciary Duty Claim

Plaintiff contends that the mortgage agreement “creates a contractual obligation on [PHH]
to make a claim/proof of loss on behalf of the Plaintiff, which in turn creates a fiduciary duty to
the Plaintiff.” 59 Plaintiff further contends that “[t]he fact that the contract between the Plaintiff and
the Defendants uses the word ‘MAY’ does not absolve the Defendants of their duties and liabilities
to the Plaintiff.” 60 Plaintiff counters that her claims against PHH are not barred by the LCAS

55

Id. at 10.

56

Id.

57

Id. at 10–11.

58

Id. at 11.

59

Rec. Doc. 24 at 6.

60

Id. at 7.

9

because the Mortgage Agreement between Plaintiff and PHH is valid contract “obliging the
Defendants to produce a submit a satisfactory proof of loss.” 61
b.

The Statutory Bad Faith Claims and Attorneys’ Fees

Plaintiff contends that La. Civ. Code Art. 1983 allows her to assert these claims and fees. 62
Plaintiff requests leave to amend the Petition if the Court finds that her claims under La. Rev. Stat.
Sections 22:1892 and 22:1927 fail. 63
3.

Plaintiff’s Motion to Strike PHH’s 12(b)(6) Motion to Dismiss

In Plaintiff’s Motion to Strike PHH’s Motion to Dismiss, she argues that PHH “relies on a
document that does not exist.” 64 The document Plaintiff is referring to is the mortgage contract
between PHH and Borrower that PHH referenced in the Motion to Dismiss. 65 Plaintiff contends
that this mortgage contract PHH referenced in its motion is actually “a sale of property agreement
between Security Homestead Association and [Borrower], together with his first wife” and PHH
is not named as a party to this agreement. 66
4.

PHH’s Opposition to Plaintiff’s Motion to Strike

PHH filed an opposition to Plaintiff’s Motion to Strike, clarifying that it made a
typographical error in referencing the exhibit number and page number for the relevant portions
of the mortgage contract. 67 PHH states that its counsel emailed Plaintiff’s counsel to clarify the
61

Id. at 8.

62

Id.

63

Id.

64

Rec. Doc. 23-1 at 1.

65

Id. at 1–2.

66

Id. at 2.

67

Rec. Doc. 27 at 1–3.

10

exhibit citation. 68
5.

MAM’s Arguments in Support of its Motion
a.

The Breach of Contract Claim

MAM contends that there is no contract between MAM and Plaintiff that contains any
obligations for MAM to fail to perform under, as the Insurance Policy between ANPAC and MAM
is “purely for the benefit” of MAM. 69 MAM further contends that even if Plaintiff is a third-party
beneficiary to the Insurance Policy, Plaintiff has not pointed to any provision in the Insurance
Policy or the mortgage contract that requires MAM to pursue a claim against ANPAC or that MAM
is required to pursue a claim against ANPAC to the satisfaction of the Plaintiff as the borrower. 70
b.

The Negligence Claim

MAM argues that “Plaintiff has presented absolutely no credible evidence that a duty exists
nor any evidence that MAM has breached any duty.” 71 MAM asserts that duty questions in a
negligence claim are “essentially legal questions.” 72 MAM reiterates that it has no contractual
obligation to file a claim against ANPAC. 73 Further, MAM avers that it did not instruct ANPAC
on how to adjust and evaluate damages, so Plaintiff’s allegation that MAM’s adjuster failed to
fully and properly evaluate the cause and extent of the damage cannot constitute a negligence claim
against MAM. 74
68

Id. at 3.

69

Rec. Doc. 25-1 at 5.

70

Id. at 5–6.

71

Id. at 6.

72

Id.

73

Id.

74

Id.

11

c.

The Breach of Fiduciary Claim

According to MAM, Plaintiff failed to state a claim for breach of fiduciary duty because
the Petition does not allege the existence of a “special relationship” of trust and confidence and it
also does not allege that MAM enjoyed any form of advantage over Plaintiff. 75 MAM also argues
that La. Rev. Stat. Section 6:1124 provides that financial institutions do not owe a fiduciary duty
to its customers unless there is a written agreement stipulating to this.76 MAM notes that both state
courts and federal courts in Louisiana have applied Section 6:1124 to dismiss fiduciary claims
against financial institutions when a plaintiff has not alleged that there is a written agreement
providing that the financial institution owes a fiduciary duty to the plaintiff. 77 MAM also argues
that Plaintiff’s claims fail under the Louisiana Credit Agreement Statute. 78
d.

Attorneys’ Fees and Bad Faith Claims

MAM contends that there is no law, statute, or contract allowing Plaintiff to recover
attorneys’ fees. 79 Similarly, MAM contends that Plaintiff’s bad faith claims against it fail because
MAM is not an insurer. 80
6.

Plaintiff’s Opposition to MAM’s Motion
a.

The Breach of Contract Claim

Plaintiff reiterates that she may bring breach of contract claims because she is a third-party

75

Id. at 7.

76

Id.

77

Id.

78

Id. at 8.

79

Id.

80

Id. at 8–9.

12

beneficiary of the insurance policy issued by ANPAC. 81
b.

The Breach of Fiduciary Duty Claim

Plaintiff reiterates that MAM owes a fiduciary duty to Plaintiff because the “insurance
policy was executed to protect the property of the Plaintiff,” the insurance policy creates a “vested
interest” for Plaintiff because the policy limit exceeds the mortgage balance, and MAM “is the
only party allowed to produce a proof of loss …” 82
c.

Bad Faith Claims and Attorneys’ Fees

Plaintiff reiterates that MAM is liable under La. Rev. Stat. Sections 22:1892 and 1927. 83
Plaintiff again argues in the alternative that MAM is liable for bad faith claims under La. Civ. Code
art. 1983. 84
7.

MAM’s Reply

First, MAM argues that the documents Plaintiff attached to her opposition should be
stricken from the record because they were not referenced in the Petition and are not central to any
of her claims against MAM. 85 MAM also contends that Plaintiff is not a third-party beneficiary
under the Insurance Policy. 86 MAM further contends that Louisiana courts have held that mortgage
lenders do not owe a fiduciary duty to their borrowers. 87

81

Rec. Doc. 32 at 4–6.

82

Id. at 6.

83

Id. at 7.

84

Id.

85

Rec. Doc. 34 at 2.

86

Id. at 3–4.

87

Id. at 4.

13

C.

Cross Motions Addressing the Issue of MAM Opting Out of the Streamlined Settlement
Program
1.

MAM’s Motion

MAM contends that it should be allowed to opt out of the Streamlined Settlement Program
“SSP” so that the Court may consider its Motion to Dismiss based on Federal Rules of Civil
Procedure 12(b)(1) and 12(b)(6). 88 According to MAM, the “Court should decided these legal
issues before MAM is required to engage in the costly exchange of documents, disclosures, and
settlement negotiations.” 89 In the alternative, MAM “requests that the Court extend any deadline
for disclosures required under the CMO until 45 days after MAM is required to file an answer
should the Court deny its Motion to Dismiss.”90
2.

Plaintiff’s Motion to Strike MAM’s Motion

In opposition, Plaintiff contends that MAM’s Motion to Opt out of the SSP violates the
CMO because MAM did not timely file the motion. 91 According to Plaintiff, MAM needed to file
the motion by December 27, 2023 because the Court entered the CMO Order on December 12,
2023 and the CMO allows a defendant 15 days to file a motion to opt out of the SSP.92
III. Legal Standards
A.

Rule 12(b)(1)
“Federal courts are courts of limited jurisdiction; without jurisdiction conferred by statute,

88

Rec. Doc. 30 at 1.

89

Rec. Doc. 30-1 at 2.

90

Rec. Doc. 30 at 1.

91

Rec. Doc. 31-2 at 2.

92

Id.

14

they lack the power to adjudicate claims.” 93 A motion to dismiss under Rule 12(b)(1) challenges a
federal court’s subject matter jurisdiction. 94 Under Rule 12(b)(1), “[a] case is properly dismissed
for lack of subject matter jurisdiction when the court lacks the statutory or constitutional power to
adjudicate the case.” 95 “Lack of subject-matter jurisdiction may be found in the complaint alone,
the complaint supplemented by the undisputed facts as evidenced in the record, or the complaint
supplemented by the undisputed facts plus the court’s resolution of the disputed facts.” 96 The party
asserting jurisdiction bears the burden of establishing that the district court possesses jurisdiction.97
When, as here, grounds for dismissal may exist under both Rule 12(b)(1) and Rule 12(b)(6), the
Court should, if necessary, dismiss only under the former without reaching the question of failure
to state a claim. 98 A court’s dismissal for lack of subject matter jurisdiction is not a decision on the
merits and does not prevent the plaintiff from pursuing the claim in another forum. 99
B.

Rule 12(b)(6)
Federal Rule of Civil Procedure 12(b)(6) provides that an action may be dismissed “for

failure to state a claim upon which relief can be granted.” 100 A motion to dismiss for failure to state

93

Cir. 2012).
94

In re FEMA Trailer Formaldehyde Products Liab. Litig. (Mississippi Plaintiffs), 668 F.3d 281, 286 (5th
Fed. R. Civ. P. 12(b)(1).

Home Builders Ass’n of Miss., Inc. v. City of Madison, Miss., 143 F.3d 1006, 1010 (5th Cir. 1998) (internal
quotation marks and citation omitted).
95

96

In re FEMA, 668 F.3d at 287.

97

Ramming v. United States, 281 F.3d 158, 161 (5th Cir. 2001).

98
Valdery v. La. Workforce Com’n, No. 15-01547, 2015 WL 5307390 (E.D. La. Sept. 10, 2015) (Vance, J.)
(citing Hitt v. City of Pasadena, 561 F.2d 606, 608 (5th Cir. 1997)).
99

Hitt, 561 F.2d at 608.

100

Fed. R. Civ. P. 12(b)(6).

15

a claim is “viewed with disfavor and is rarely granted.” 101 “To survive a motion to dismiss, a
complaint must contain sufficient factual matter, accepted as true, to state a claim for relief that is
plausible on its face.” 102 The “[f]actual allegations must be enough to raise a right to relief above
the speculative level.” 103 The complaint need not contain detailed factual allegations, but it must
offer more than mere labels, legal conclusions, or formulaic recitations of the elements of a cause
of action. 104 That is, the complaint must offer more than an “unadorned, the defendant-unlawfullyharmed-me accusation.” 105 Although a court must accept all “well-pleaded facts” as true, a court
need not accept legal conclusions as true. 106 “[L]egal conclusions can provide the framework of a
complaint, [but] they must be supported by factual allegations.” 107 Similarly, “[t]hreadbare recitals
of the elements of a cause of action, supported by mere conclusory statements” will not suffice.108
If the factual allegations are insufficient to raise a right to relief above the speculative level, or an
“insuperable” bar to relief exists, the claim must be dismissed.” 109

101

Kaiser Aluminum & Chem. Sales, Inc. v. Avondale Shipyards, Inc., 677 F.2d 1045, 1050 (5th Cir. 1982).

Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570
(2007)). (internal quotation marks omitted).
102

Twombly, 550 U.S. at 555. Put another way, a plaintiff must plead facts that allow the court to draw a
“reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678.
103

104

Iqbal, 556 U.S. at 678.

105

Id.

106

Id. at 677–78.

107

Id. at 679.

108

Id. at 678.

Carbe v. Lappin, 492 F.3d 325, 328 n.9 (5th Cir. 2007); Moore v. Metro. Human Serv. Dist., No. 09-6470,
2010 WL 1462224, at * 2 (E.D. La. Apr. 8, 2010) (Vance, J.) (citing Jones v. Bock, 549 U.S. 199, 215 (2007)).
109

16

IV. Analysis
A.

Whether Plaintiff Rose Okpalobi has Standing to Sue in Her Individual Capacity
PHH and MAM move the Court for an Order dismissing all claims Plaintiff has asserted

against them in her individual capacity under Federal Rule of Civil Procedure 12(b)(1), arguing
that Plaintiff does not have standing because she does not have title to the Property, as the Judgment
of Possession in the Succession of Ifeanyi Charles Anthony Okpalobi does not state that Rose
Okpalobi owns the Property. 110 Plaintiff opposes, contending that she does in fact own the Property
because her husband bequeathed it to her in his last will. 111
Under Louisiana law, judgments of possession in succession cases are considered “prima
facie” evidence of the rights of the heirs of the decedent. 112 The right to assert inheritance rights is
subject to a 30 year prescriptive period, which runs from the decedent’s death. 113 A succession can
be reopened if “[a]fter … rendition of a judgment of possession by a court of competent
jurisdiction, if other property is discovered, or for any other proper cause, upon the petition of any
interested person …” 114 Louisiana courts have noted that “judgments of possession are rarely
amended for grounds other than discovery of additional property or new wills.” 115
Here, on March 6, 2019, Plaintiff filed a Petition for Probate of Statutory Testament in the
Civil District Court for the Parish of Orleans, State of Louisiana. 116 On November 16, 2021, the
110

Rec. Doc. 18-1 at 6; Rec. Doc. 25-1 at 4.

111

Rec. Doc. 32 at 3; Rec. Doc. 24 at 3.

112

La. Code of Civ. Proc. art. 3062.

113

See La. Civ. Code art. 3502, 934.

114

La. Code. Civ. P. art. 3393(B).

Succession of Murray, 2022-667 (La. App. 3 Cir. 5/10/23), 372 So. 3d 1, 6 (citing Estate of Sylvester, 93731 (La. App. 3 Cir. 2/24/94, 631 So.2d 614, 619).
115

116

Rec. Doc. 18-5 at 1. Succession of Dr. Ifeanyi Charles Anthony Okpalobi, No. 19-2450 (Civ. Dist. Ct. Par.

17

court entered a Judgment of Possession that was silent as to Rose Okpalobi’s possession of the
Property. 117 Plaintiff nonetheless contends that she has title to the Property because her husband
bequeathed the Property to her in his last will, deference should be made to Louisiana Succession
law when the Judgment of Possession is silent as to ownership of the Property, and that she was a
legal usufructuary. 118 Plaintiff did not cite any legal authority for these arguments. The Judgment
of Possession placed Plaintiff in possession of certain property of Dr. Ifeanyi Okpalobi, but it is
silent on the issue of possession of the Property at issue in this litigation. 119 Therefore, this Court
will follow the Judgment of Possession and find that Rose Okpalobi does not have standing to sue
in her individual capacity in this matter at this time. However, because the court in the Succession
of Dr. Ifeyani Charles Anthony Okpalobi recognized that Plaintiff is executrix of his estate, she
may bring claims on behalf of the Estate against MAM and PHH. 120 The Court thus turns to address
whether Plaintiff on behalf of the Estate has sufficiently plead claims under Rule 12(b)(6).
B.

Whether Claims Should be Dismissed Under Rule 12(b)(6)
PHH and MAM move the Court for dismissal of Plaintiff’s claims against them under Rule

12(b)(6), as PHH and MAM contend that they are not insurers for the breach of insurance contract
and statutory bad faith claims to apply. 121 PHH and MAM further contend that Plaintiff’s breach
of fiduciary duty claim also fails because there is no written agreement between PHH and Plaintiff

Orleans Mar. 6, 2019).
117

Rec. Doc. 18-5 at 27.

118

Rec. Doc. 24 at 3.

119

Rec. Doc. 18-5 at 27.

120

Rec. Doc. 18-5 at 8.

121

Rec. Doc. 18-1 at 6–7, 11; Rec. Doc. 25-1 at 5, 8.

18

and no written agreement between MAM and Plaintiff stating that PHH and MAM are fiduciaries
for Plaintiff. 122 Plaintiff opposes, asserting that she may bring the breach of insurance contract,
breach of fiduciary claims, and statutory bad faith claims against PHH and MAM because she is a
third-party beneficiary to the Insurance Policy between ANPAC and MAM. 123 The parties also
dispute whether Plaintiff is entitled to attorneys’ fees. 124
1.

The Breach of Insurance Contract Claim

In the Petition, Plaintiff brings a “Breach of the Insurance Contract” claim against “the
mortgage companies and the insurance company,” alleging that they failed to timely pay Plaintiff
her insurance proceeds. 125 Because the Insurance Policy does not list PHH or MAM as insurers,
Plaintiff has not stated viable breach of insurance contract claims against PHH and MAM. As
Plaintiff alleges, PHH and MAM are mortgage companies rather than insurers. 126 Further, this
Court held that Plaintiff is not a third-party beneficiary to the Insurance Policy in its February 28,
2024 Order and Reasons granting ANPAC’s Motion to Dismiss.127 Thus, Plaintiff’s breach of
contract claim against PHH and MAM must be dismissed.
2.

Statutory Bad Faith Claims and Attorneys’ Fees

Plaintiff asserts “Bad Faith” claims against “Defendants” under La. Rev. Stat. Sections

122

Rec. Doc. 25-1 at 6–7; Rec. Doc. 18-1 at 7–10.

123

Rec. Doc. 32 at 4–7; Rec. Doc. 24 at 4–8.

124

Rec. Doc. 24 at 8; Rec. Doc. 32 at 7; Rec. Doc. 18-1 at 10; Rec. Doc. 25-1 at 8.

125

Id. at 8–9.

126

Rec. Doc. 1-9 at 2.

127

Rec. Doc. 33.

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22:1973 and 22:1892. 128 She references an “insurer” in this claim. 129 Because Plaintiff failed to
state a breach of insurance contract claim against PHH and MAM, Plaintiff also fails to state claims
under La. Rev. Stat. Sections 22:1892 and 22:1973 against PHH and MAM, as any recovery under
those statutes is based on the existence of an insurance contract between Plaintiff and PHH or an
insurance contract between Plaintiff and MAM. 130 Further, Plaintiff did not cite to any law
allowing recovery of attorneys’ fees in the Petition.
In opposition to the instant motion, Plaintiff argues in the alternative that if the Court finds
that she may not bring claims based on Sections 22:1973 and 22:1892, she should be allowed to
amend the Petition to assert bad faith claims under La. Civ. Code art. 1983. 131 Article 1983
provides that “[c]ontracts have the effect of law for the parities and may be dissolved only through
the consent of the parties or on grounds provided by law. Contracts must be performed in good
faith.” 132 Article 1983 is silent as to what penalties may be imposed if a contract is not performed
in good faith. 133 The Fifth Circuit has recognized that “[a] breach of the duty of good faith and fair
dealing [under Article 1983] requires a breach of contract.” 134 As the Court has explained, Plaintiff
has not alleged a viable breach of insurance contract claim against PHH and MAM. Therefore,
128

Rec. Doc. 1-9 at 9.

129

Id.

See O’Meallie v. Great Lakes Reinsurance (UK) PLC, No. 22-4081, 2023 WL 4201766, at *2 (E.D. La.
June 27, 2023) (Milazzo, J.) (dismissing the plaintiff’s statutory bad faith penalties claim under La. Rev. Stat. Sections
22:1892 and 22:1973 because the plaintiffs have not stated a breach of contract claim against insurer in Hurricane Ida
case); Bradley v. Allstate Ins. Co., 620 F.3d 509, 526 (5th Cir. 2010) (“a plaintiff attempting to base her theory of
recovery against an insurer on [Louisiana’s bad faith statutes] must first have a valid, underlying, substantive claim
upon which the insurance coverage is based.”) (quotation and citation omitted).
130

131

Rec. Doc. 32 at 7.

132

La. Civ. Code art. 1983.

133

See id.

134

Schaumburg v. State Farm Mut. Auto. Ins. Co., 421 Fed. App’x. 434, 439 (5th Cir. 2011).

20

Plaintiff also has not stated a claim under Article 1983. 135
3.

Breach of Fiduciary Duty Claim

Plaintiff asserts a “Breach of Fiduciary” claim against PHH, Champion, and MAM for
failing to file claims with ANPAC after the Property was damaged by Hurricane Ida. 136 Plaintiff
alleges that the “[t]he mortgage companies are contractually obligated to assist Plaintiff in
procuring sufficient insurance proceeds to secure its interest” and “by virtue of their role as
mortgagee and named insured of the insurance policy, the mortgage companies owe a fiduciary
duty to the Plaintiff because she is a third-party beneficiary of the insurance contract …”137
Plaintiff alleges that MAM and PHH breached their duties by failing to file claims with the insurer
despite Plaintiff’s requests for them to do so. 138
Under Louisiana law, there are “no implied fiduciary obligations.” 139 La. Rev. Stat. Section
6:1124 requires a fiduciary relationship to be established through “a written agency or trust
agreement under which the financial institution specifically agrees to act and perform in the
capacity of a fiduciary.” 140 Further, Section 6:1124 “is not limited to credit agreements and shall
apply to all types of relationships to which a financial institution may be a party.” 141

See Amoco Prod. Co v. Tex. Meridian Res. Expl. Inc., 180 F.3d 664 (5th Cir. 1999) (Louisiana law requires
contracts to be performed in good faith); Jones v. Honeywell Int. Inc., 295 F. Supp. 2d. 652 (M.D. La. 2003) (Under
Louisiana law, implied duty of good faith arises only in context of performance of contract); Brenner v. Zaleski, 20141323 (La. App. 4 Cir. 6/3/15), 174 So.3d 76 (A contract is the law between the parties, and the parties will be held to
full performance in good faith of the obligations flowing from the contract).
135

136

Rec. Doc. 1-9 at 6.

137

Id.

138

Id. at 6–7.

139

La. Rev. Stat. § 1124.

140

Id.

141

Id.

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Borrower Ifeanyi Charles Anthony Okpalobi obtained an Adjustable Rate Home Equity
Conversion Mortgage (the “Mortgage Contract”) for the Property from Lender Wells Fargo Bank,
N.A. dated January 6, 2010. 142 Wells Fargo Bank, N.A. then assigned this mortgage to Nationstar
Mortgage LLC d/b/a Champion Mortgage Company on August 15, 2017. 143 Although it is unclear
when this mortgage was assigned to PHH and MAM, the Petition alleges that PHH, Champion,
and MMA serviced the mortgage. 144 This mortgage contract contains a “Fire, Flood and Other
Hazard Insurance” provision requiring Borrower to obtain insurance for the Property and the
“insurance policies and any renewals shall be held by Lender and shall include loss payable clauses
in favor of, and in a form acceptable to, Lender.” 145 If the Property suffers damage, “Borrower
shall give Lender immediate notice by mail” and “Lender may make proof of loss if not made
promptly by Borrower.” 146 Further, the insurance companies shall make payments to Lender only
instead of to Borrower and Lender jointly. 147
The mortgage contract does not reflect that lenders such as PHH and MAM agreed to act
and perform in the capacity of a fiduciary. When the “Fire, Flood, and Other Hazard Insurance”
provision is read in its entirety, the provision reflects the Lender’s intent to protect its interest in
the Property, as it requires Borrower to notify Lender of any damage to the Property immediately
and any payments by the insurance companies for damage to the Property are only made to the

142

Rec. Doc. 18-4.

143

Rec. Doc. 32-3 at 1.

144

Rec. Doc. 1-9 at 2.

145

Rec. Doc. 18-4 at 2–3.

146

Id. at 3.

147

Id.

22

Lender instead of Borrower. Further, “may” is permissive language that allows the Lender to make
proof of loss to the insurer if the Borrower has not done so promptly. 148 As the Court explained in
its Order and Reasons granting ANPAC’s 12(b)(6) motion to dismiss, Plaintiff is not a third-party
beneficiary to the Insurance Policy because there are no provisions in the Insurance Policy intended
to benefit Plaintiff or Borrower. 149
Louisiana courts have applied La. Rev. Stat. Section 6:1124 to dismiss breach of fiduciary
claims mortgagors have brought against mortgagees based on the allegation that the mortgagee
failed to obtain additional proceeds from the insurer. 150 In Dace v. Novastar Mortgage, Inc., the
Louisiana Fourth Circuit Court of Appeal affirmed the trial court’s finding that the mortgagee,
Novastar, owed no duty to the plaintiff to file a claim with the insurance company after Hurricane
Katrina caused damage to the mortgaged property. 151 Novastar obtained a forced placed insurance
policy that the plaintiff paid as part of his monthly mortgage payments. 152 The insurance policy
provided, in part, that “[i]n the event of loss, Borrower shall give prompt notice to the insurance
carrier and Lender. Lender may make proof of loss if not made promptly by Borrower …” 153 The
Louisiana Fourth Circuit reasoned that this language in the mortgage contract “does not require

Green v. Underwriters at Lloyd’s, London, No. 23-927, 2023 WL 9002678, at *5 (E.D. La. Dec. 28, 2023)
(Milazzo, J.) (the plaintiff alleged that his/her mortgage lender was negligent in not procuring additional insurance
proceeds to repair the property that was damaged by Hurricane Ida, but the presiding judge pointed to the “may”
language in the mortgage contract to find that it does not create this obligation).
148

149

Rec. Doc. 33.

150
Jennifer Guillory v. Carrington Mortgage Srvs., LLC., No. 22-192, 2024 WL 1020555, at *18 (M.D. La.
Mar. 8, 2024) (DeGravelles, J.) (collecting cases).
151

Dace, 2011 WL 9165407, at *3.

152

Id. at *1. The petition alleged that “Novastar had the Policy Placed on the Property.”

153

Id. at *3.

23

Novastar to make a claim under any insurance policy.” 154 The court also concluded that “because
there is no written agency or trust agreement between the parties, we find Novastar owned neither
a fiduciary duty nor general duty to [the plaintiff] to file an insurance claim against [the
insurer].” 155
In Barbe v. Ocwen Loan Servicing, LLC, the plaintiff alleged that his mortgage servicer
breached the mortgage agreement by failing to assist him in obtaining sufficient insurance proceeds
to repair his property. 156 The mortgage contract provided that “Borrower shall give prompt notice
to the insurance carrier and Lender” of loss. 157 However, the presiding judge reasoned that the
mortgage contract “place[d] no obligation on Ocwen to independently pursue or even assist the
Barbes in pursuing insurance proceeds from the insurer.” 158 The presiding judge also reasoned that
“the permissive provision that allows Ocwen to ‘make proof of loss if not made promptly by
Borrower’ also does not impose upon Ocwen a duty to submit proof of loss or otherwise pursue a
claim.” 159 The presiding judge further reasoned that this permissive provision “vests Ocwen with
the right to submit proof of loss to the insurer in the event the Barbes fail to do so.” 160 The presiding
judge concluded, in part, that because the mortgage contract does not give rise to a duty on
Ocwen’s part to pursue insurance proceeds from American Modern, Plaintiff failed to state a claim

154

Id.

155

Id.

156

Barbe v. Ocwen Loan Servicing, LLC, 383 F.Supp.3d 634, 639 (E.D. La. 2019) (Feldman, J.).

157

Id. at 644.

158

Id.

159

Id.

160

Id.

24

against Ocwen for breach of the mortgage agreement. 161
Here, the terms of the mortgage contract do not create any fiduciary duties for MAM and
PHH. Because the mortgage contract is the private law governing this dispute between Plaintiff,
MAM, and PHH and interpretation of this contract is a matter of law, it would be futile for Plaintiff
to amend the Petition for any pleading insufficiencies.
4.

Negligence Claim

In pleading her “Particulars of Negligence” claim, Plaintiff alleges that the “mortgage
companies owe a duty of care to the Plaintiff as they facilitated and secured the insurance policy
on the Plaintiff’s Property …” 162 Plaintiff further alleges that “[t]his duty of care requires the
mortgage companies to act in a manner consistent with the protection of both their interest and that
of the Plaintiff which demands the responsibility of filing an insurance claim in the event of
property damage.” 163
A mortgagor may assert a negligence claim by alleging that the mortgagee assumed a duty
under tort law with respect to the mortgagor’s inadequate filing of insurance claims to obtain
insurance proceeds. 164 Plaintiff attempts to allege such a claim here, but the Petition lacks facts
suggesting that PHH and MAM as mortgagors assumed such a duty. Therefore, Plaintiff has not
stated a negligence claim against PHH and MAM.
5.

Plaintiff’s Request to Amend the Pleadings

For the reasons discussed above, the Court finds that Plaintiff has not stated any viable

161

Id.

162

Rec. Doc. 1-9 at 7.

163

Id.

See Barbe, 282 F.Supp.3d at 644–45 (citing Obioha v. Proctor Fin. Ins. Co., Nos. 06-5364, 06-9231, 2007
WL 2903227, at *3 (E.D. La. Oct. 2, 2007) (Vance, J.).
164

25

claims against PHH or MAM. Plaintiff argues that she should be allowed to amend the pleadings
to address any deficiencies. Federal Rule of Civil Procedure 15(a)(2) provides that a court “should
freely give leave when justice so requires.” 165 Short of granting a motion to dismiss, the Court may
grant Plaintiffs leave to file an amended complaint. 166 Accordingly, at this time, the Court will
deny PHH and MAM’s motions to dismiss and grant Plaintiff leave to file an amended complaint.
C.

Whether MAM is Allowed to Opt Out of the Streamlined Settlement Program
Having determined that MAM’s Motion to Dismiss has merit, the Court also finds it

appropriate to grant MAM’s Motion to Opt Out of the SSP, as it would be contrary to the efficient
administration of justice. This Court adopted Case Management Order (“CMO”) No. 1 on August
26, 2022 to facilitate the speedy and orderly resolution of insurance cases arising out of Hurricane
Ida through the SSP. 167 Requiring MAM to proceed with the SSP hinders the resolution of this
matter and thus would be contrary to the goals of the CMO in efficiently resolving Hurricane Ida
disputes, as Plaintiff, absent pleading amendments to the Petition, has no viable claims against
MAM. Other sections of this Court have granted the defendants’ untimely motions to opt out of
the SSP when there was a mandatory, enforceable arbitration clause in Hurricane Ida disputes
because it would promote the efficient administration of justice. 168

165

Fed. R. Civ. Pro. R. 15(a).

See Carroll v. Fort James Corp., 470 F.3d 1171, 1175 (5th Cir. 2006) (quoting Dussouy v. Gulf Coast Inv.
Corp., 660 F.2d 594, 597–98 (5th Cir. 1981)).
166

167

See Rec. Doc. 7.

Academy of Sacred Heart of New Orleans v. Certain Underwriters at Lloyd’s London, 651 F.Supp.3d 822,
831 (E.D. La. 2023) (Africk, J.) (419 Carondelet, LLC v. Certain Underwriters at Lloyd’s London, et al., No. 224311, 2023 WL 143318, at *2–3 (E.D. La. Jan. 10, 2023) (Vitter, J.).
168

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V. Conclusion
For the reasons discussed above,
IT IS HEREBY ORDERED that PHH Mortgage Corporation’s FRCP 12(b)(1) Motion
to Dismiss for Lack of Standing 169 and Mortgage Assets Management, LLC’s Motion to Dismiss
for Lack of Standing” 170 are DENIED.
IT IS FURTHER ORDERED that PHH Mortgage Corporation’s FRCP 12(b(6) Motion
to Dismiss for Failure to State a Claim 171 and Mortgage Assets Management, LLC’s Motion to
Dismiss with Prejudice for Failure to State a Claim 172 are DENIED WITHOUT PREJUDICE.
Plaintiff is granted leave to amend the Complaint within fourteen days of this Order to cure the
deficiencies noted, if possible. If upon amendment, Plaintiff fails to provide sufficient factual
support for each element of each claim, upon motion by a party, the Court will dismiss the claims.
IT IS FURTHER ORDERED that Mortgage Assets Management, LLC’s Motion to Opt
Out of the Streamlined Settlement Program 173 is GRANTED.

169

Rec. Doc. 18.

170

Rec. Doc. 25.

171

Rec. Doc. 18.

172

Rec. Doc. 25.

173

Rec. Doc. 30.

27

IF IS FURTHER ORDERED that Plaintiff Rose Okpalobi’s (“Plaintiff”) Motion to
Strike Defendant PHH Mortgage Corporation’s Motion to Dismiss for Lack of Standing 174 and
Cross Motion to Strike MAM’s Motion to Opt Out of the Streamlined Settlement Program 175 are
DENIED.

8th day of May, 2024.
NEW ORLEANS, LOUISIANA, this ____

_________________________________
NANNETTE JOLIVETTE BROWN
CHIEF JUDGE
UNITED STATES DISTRICT COURT

174

Rec. Doc. 23.

175

Rec. Doc. 31.

28