Barlow v. Safety National Casualty Corporation et al

Filing 50

ORDER & REASONS denying 38 Motion to Strike. Signed by Judge Martin L.C. Feldman on 7/24/2012. (CAA)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA
CAMILLA BARLOW, individually
and as representative of a class

CIVIL ACTION

VERSUS

NO. 11-236

SAFETY NATIONAL CASUALTY
CORPORATION, ET AL.

SECTION “F”

ORDER AND REASONS
Before the Court is the defendants’ special motion to strike
pursuant to La.C.C.P. art. 971.

For the reasons that follow, the

motion is DENIED.
Background
This putative class action lawsuit arises out of alleged
unlawful collection practices engaged in by the defendants in their
efforts to collect on a bail bond obligation after the bond
forfeiture judgment had been set aside.
This Court has previously summarized the facts of this case in
its Order and Reasons dated March 6, 2012, in which the Court
granted in part and denied in part the defendants’ motion to
dismiss the plaintiff’s complaint; in particular, the plaintiff’s
abuse of process claim survived the defendants’ pleadings challenge
and the FDCPA claims were dismissed, but with permission to cure.
With leave of Court, the plaintiff filed a second amended complaint
on March 15, 2012. The defendants again challenged the sufficiency

1

of the plaintiff’s amended FDCPA claims.

On May 31, 2012 this

Court granted in part and denied in part the defendants’ motion
such that some of the plaintiff’s FDCPA claims survived the
defendants’ challenge. In light of this motion practice, the facts
of this case are familiar:
On September 30, 2007 Camilla Barlow paid AAA Bail Services,
Inc. $475.00 for a bail premium in order to bail her son, Eric
Dougherty, out of jail.

In connection with posting the bond, and

as collateral, Barlow was required to execute a promissory note for
$3,500.00 and an indemnity agreement.

In fact, Barlow executed

various contracts, including a “Contract & Application for Bail
Bond,”

“Indemnitor

Promises.”

Application,”

and

“Bail

Bond

Indemnitor

These agreements include various provisions regarding

indemnification; for example, the application provides:
I UNDERSTAND THAT I AM CO-SIGNING WITH AAA BAIL
SERVICES, INC. ON THE BAIL BOND THAT IS BEING POSTED WITH
THE COURT. I ALSO UNDERSTAND THAT I WILL BE FINANCIALLY
LIABLE FOR ANY LOSSES, EXPENCES [sic], OR ADDITIONAL
CHARGES THAT OCCUR AS A RESULT OF THE DEFENDANT NOT
MEETING ALL OF THE OBLIGATIONS UNDER THE BAIL BOND
CONTRACT. I ALSO UNDERSTAND THAT I AM RESPONSIBLE FOR
BRINGING THE DEFENDANT BACK TO THE BAIL BOND OFFICE SO
THAT THE PAPER WORK CAN BE COMPLETED, SIGNED AND A
PICTURE OF THE DEFENDANT CAN BE TAKEN.
The application also included this indemnity provision:
To indemnify the Company against all liability,
loss, damages, attorney fees and expenses whatsoever,
including, but not limited to returning prisoner costs,
which the Company may sustain or incur in making such
bond, prosecuting or defending any action brought in
connection therewith, and enforcing any of the agreements
2

herein contained, and specifically enforcing any
collateral or indemnifying agreement as well as any
expense in locating Defendant and producing him in Court.
If upon failure of the parties to comply with any of the
terms or conditions of this agreement and should it be
necessary for the Company to refer the agreement to an
Attorney for collection, the Parties agree to pay an
attorney fee of 33-1/3% whether or not such action
proceeds to judgment.
Similarly, the Bail Bond Indemnitor’s Promises contract provided:
Indemnification: I, the undersigned hereby agree to
save and hold the surety and its agents and/or assigns
from any loss whatsoever resulting from the failure of
the above named defendant to appear in court as ordered.
I, the undersigned hereby agree to pay all cost (500.00
minimum charge) associated with the failure of the above
named defendant to appear in Court as ordered, in U.S.
currency to surety, its agents and/or assigns upon the
failure of the above named defendant to appear in Court
as ordered.
A copy of a judgment of bond forfeiture
naming the above named defendant shall be prima facie
evidence of loss sustained by surety and against agents
and/or assigns.
On

February

1,

2008

Doughterty

failed

to

appear

for

his

arraignment; the court issued a bench warrant and an order of bond
forfeiture.

One week later, on February 8, the court executed a

judgment in favor of the State of Louisiana and against Eric
Dougherty, as principal, and Safety National Casualty Corporation,
as surety, for $3,500.00. On March 4, 2008 Eric Dougherty appeared
in court through counsel, at which time the bench warrant was
recalled and the bond forfeiture judgment was set aside.1
1

According to the defendants, Safety National was not
provided notice, nor was it entitled to notice under Louisiana law,
of the later appearance of the criminal defendant. And, defendants
suggest, even though the bond may have been deemed satisfied,
3

Barlow complains that, beginning on March 11, 2008 Singletary
& Associates, A Professional Law Corporation, initiated collection
efforts against Barlow for the bond amount of $3,500.00, including
by sending letters on several occasions and, on one occasion, a
non-lawyer telephoned Barlow, failed to identify herself as a nonlawyer and threatened litigation to collect the $3,500.00 bond.2
Barlow says that Commercial Surety Consultants, Inc. And
Financial Recovery Agency, Inc. also attempted to collect the
$3,500.00 by correspondence dated February 2, 2010, February 22,
2010, and March 4, 2010. For example, the February 22, 2010 letter
stated:
Re: Judgment of Bond Forfeiture $3,500.00....
Dear CAMILLA BARLOW,
This account
collection.

has

been

listed

with

our

office

for

You are contractually obligated to pay this account
because a judgment of bond forfeiture has been filed
against SAFETY NATIONAL CASUALTY CORP. You may have an
opportunity to reduce this debt by obtaining a
cancellation of the bond forfeiture judgment. We advise
you to seek independent legal advice to inform you of

Safety National still had a judgment recorded against it and was
not provided with notice by the court or sheriff of its
satisfaction.
All of which this Court might consider in the
context of future motion practice, once the pleadings are complete,
that might present challenges beyond that of the technical
sufficiency of the plaintiff’s allegations.
2

In particular, the plaintiff contends that Singletary &
Associates sent correspondence on March 11, 2008, March 25, 2008,
May 28, 2010 and June 21, 2010; she says that she received the
telephone call on July 7, 2010.
4

your rights and responsibilities. If you are unable to
cancel this judgment of bond forfeiture or refuse to do
so, we shall be left with no alternative but to seek the
collection of the entire debt.
This communication is from a debt collector.
attempt to collect a debt....

This is an

Unless you notify this office within 30 days after
receiving this notice that you dispute the validity of
this debt or any portion thereof, this office will assume
this debt is valid....
On July 7, 2010 -- the same day Barlow alleges that she received a
phone call from Singletary & Associates threatening litigation -Safety National Casualty Corporation indeed sued Barlow (and 25
other persons) in Baton Rouge city court for breach of contract
based on the indemnity agreement; the lawsuit was drafted by
Singletary & Associates.

Six days later, the Baton Rouge city

court returned the petition because of “improper cumulation of
defendants”; the court invited counsel for Safety National to refile its petition for damages for breach of contract to indemnify
a commercial surety, but Safety National has yet to re-file.
Nonetheless on July 26, 2010 Singletary & Associates, by letter,
informed Barlow that she had been sued.
On December 14, 2010 Barlow, on behalf of a putative class,
sued Safety National Casualty Corporation, Singletary & Associates,
A.P.L.C., Financial Recovery Agency, Inc., and Commercial Surety
Consultants, Inc. in the U.S. District Court for the Middle
District of Louisiana, alleging three violations of the Fair Debt

5

Collection Practices Act and a claim for abuse of process under
Louisiana law.
defendants’

In response to Barlow’s contentions that the

pursuit

of

Safety

National’s

indemnity

rights

constituted improper collection efforts, the defendants responded
with a motion to dismiss.

Almost one week before her opposition

papers were due, on March 22, 2011, Barlow filed a notice of
dismissal, and the lawsuit was dismissed without prejudice.
Just two weeks later, on April 8, 2011, Barlow re-filed her
complaint, again invoking the U.S. Middle District court’s federal
question jurisdiction under the Fair Debt Collection Practices Act,
and asserting the same claims and factual allegations.

The

plaintiff seeks to represent a class defined as:
All persons who were required to execute an indemnity
promise in connection with a Safety National Casualty
Corporation bail bond obligation and who were subject to
unlawful collection actions by [the defendants] even
though any underlying bench warrant(s) had been recalled
and any previously rendered Bond Forfeiture judgment(s)
had been set aside.
Barlow contends that each of the defendants were acting as agents
of Safety National Casualty Corporation in the capacity as “debt
collectors.”
This putative class action was reassigned to this Court from
the Middle District of Louisiana on August 29, 2011. On January 6,
2012 Barlow, with leave of Court, filed a first amended class
action complaint, in which she added Commercial Surety Consultants,
LLC as a defendant.

As noted, the defendants moved to dismiss the

6

plaintiff’s amended complaint, contending that the plaintiff’s
claims fall outside the scope of the Fair Debt Collection Practices
Act and that, even if the Act applies, the plaintiff fails to state
a claim for relief under both the Act and state law principles of
abuse of process.

The Court granted in part and denied in part the

defendants’ motion: in particular the Court determined that the
plaintiff had stated a claim for abuse of process and rejected the
defendants’ argument that the bail bond indemnity obligation did
not constitute a debt; however, the Court determined that the
plaintiff failed to state a claim for FDCPA violations. The
plaintiff was permitted to amend her complaint, which she did.

In

response to the defendants’ challenge to the sufficiency of the
newly-amended FDCPA claims, the Court dismissed a few but not all
of the FDCPA claims.

The defendants now request that this Court

strike the plaintiff’s abuse of process claim pursuant to Louisiana
Code of Civil Procedure article 971.
I.
A.
The parties do not dispute that Louisiana law governs the
plaintiff’s abuse of process claim.

The Fifth Circuit has held

that, when Louisiana law applies, “the nominally-procedural Article
971” also governs.

See Henry v. Lake Charles Am. Press, L.L.C.,

566 F.3d 164, 168-69 (5th Cir. 2009); see also Brown v. Wimberly,
No.

11-31080,

2012

WL

1759956,

at

*1

(5th

Cir.

May

18,

2012)(unpublished)(citing Henry and noting that “[t]his court has
7

adopted the use of the statute in federal court under Erie”).
Article 971 instructs that a plaintiff who files suit “against a
person arising from any act of that person in furtherance of the
person’s right of petition or free speech . . . in connection with
a public issue” is subject to a special motion to strike.
Civ. Proc. art. 971.

La. Code

Upon filing of a special motion to strike,

all discovery proceedings are stayed until a court determines
whether the plaintiff has established a probability of success on
the merits. Id. art. 971(D). On noticed motion and “for good cause
shown,” a court may order that specified discovery be conducted
before ruling on the special motion to strike. Id.

The prevailing

party on a special motion to strike is entitled to attorney fees
and costs.
plaintiff

Id. art. 971(B).
has

a

probability

If a court determines that the
of

success

on

the

claim,

this

determination is admissible in later stages of the proceedings.
Id. art. 971(A)(3).
Article 971 is Louisiana’s anti-SLAPP procedure, enacted to
address a “strategic lawsuit against public participation.” See
Henry, 566 F.3d at 169. “The purpose of the special motion to
strike ‘is to encourage continued participation in matters of
public significance and to prevent this participation from being
chilled through an abuse of judicial process.’” Savoie v. Page, 23
So. 3d 1013, 1016 (La. App. 3rd Cir. 2009) (quoting Lamz v. Wells,
938 So. 2d 792, 796 (La. App. 1st Cir. 2006)).

8

Thus, the device is

intended “to be used early in legal proceedings to screen meritless
claims.”

Henry, 566 F.3d at 169 (quoting Lee v. Pennington, 830

So. 2d 1037, 1041 (La. App. 4th Cir. 2002)).3
B.
Significantly, consistent with article 971's purpose, it
further provides:
C. The special motion may be filed within sixty
days of service of the petition, or in the court’s
discretion, at any later time upon terms the court deems
proper. The motion shall be noticed for hearing not more
than thirty days after service unless the docket
conditions of the court require a later hearing.
3

To achieve its purpose, “Article 971 establishes a
burden-shifting analysis.” Henry, 566 F.3d at 170. First, the
defendants must make a prima facie showing that the action against
them arises from an act in furtherance of their right of petition
or free speech in connection with a public issue. See id. For
example, Louisiana courts have found Article 971 available where a
newspaper publishes an article on the sudden removal of a radio
station from the airwaves, Starr v. Boudreaux, 978 So. 2d 384, 389
(La. App. 1st Cir. 2007), or a news station broadcasts a story
about a couple’s murder, Johnson v. KTBS, Inc., 889 So. 2d 329, 332
(La. App. 2 Cir. 2004). In Henry, the Fifth Circuit found the
defendants had met their burden where they had published a series
of news articles about the loss of a government contract and the
investigation of an entity doing business with the federal and
state governments. 566 F.3d at 181.
If the defendants succeed, “the burden then shifts to the
plaintiff to demonstrate a probability of success on the claim.”
Id. (quoting Starr v. Boudreaux, 978 So. 2d at 389). The plaintiff
must produce “evidence of sufficient quality and quantity to
demonstrate that he will be able to meet his burden of proof at
trial.” Estiverne v. Times-Picayune, L.L.C., 950 So. 2d 858, 860
(La. App. 4th Cir. 2006) (quoting Sassone v. Elder, 626 So. 2d 345,
351 (La. 1993)). This has been described as a difficult burden,
justified by the importance of protecting free speech rights.
Henry, 566 F.3d at 182 (finding the plaintiff had not met the
burden by failing to present an affidavit that showed the fault
element of defamation, but remanding to permit the district court
to allow limited discovery).
9

La. Code Civ. Proc. art. 971(C).
The plaintiff contends that the defendants’ motion to strike
her

abuse

of

process

claim

is

untimely.

The

Court

agrees.

Consider this time-line:
•
•

•
•
•
•

•
•

•

•

On December 14, 2010 Barlow filed her original class action
complaint alleging violations of the FDCPA and, significantly,
a claim for abuse of process under Louisiana law.
On March 7, 2011 the defendants filed a motion to dismiss
pursuant to Rule 12(b)(6), seeking to dismiss all of Barlow’s
claims including her abuse of process claim on the ground that
she failed to state a claim for relief.
On March 22, 2011 Barlow voluntarily dismissed the lawsuit.
On April 11, 2011 Barlow filed the same complaint, again
alleging that the defendants violated the FDCPA and again
including her abuse of process claim.
On May 25, 2011 the defendants filed a motion to dismiss
pursuant to Rule 12(b)(6), challenging the technical
sufficiency of each of the plaintiff’s claims.
After the case was transferred to this Court, the plaintiff
filed an unopposed motion for leave to file amended class
action complaint, which was granted on January 6, 2012. The
amended class action complaint included the abuse of process
claim originally alleged in December 2010 and April 11, 2011.
On January 19, 2012 the defendants filed another motion to
dismiss, challenging the plaintiff’s first amended complaint
on identical grounds pursuant to Rule 12(b)(6).
On March 12, 2012 this Court granted in part and denied in
part the defendants’ motion to dismiss; significantly, the
Court dismissed Barlow’s FDCPA claims but permitted her to
seek leave to amend and the Court declined to dismiss Barlow’s
abuse of process claim.
Shortly after Barlow requested leave to file her second
amended complaint (on March 13), which the Court granted on
March 15, the defendants filed another motion to dismiss
pursuant to Rule 12(b)(6), challenging her restated FDCPA. On
May 31, 2012 the Court granted in part and denied in part the
defendants’ Rule 12(b)(6) motion.
While the motion to dismiss was pending, on May 15, 2012 the
defendants filed the instant motion to strike, for the first
time seeking to strike the plaintiff’s abuse of process claim
pursuant to La.C.C.P. art. 971.

It is undisputed that the defendants filed their motion to strike
10

the plaintiff’s abuse of process claim on May 15, 2012, which is
more than one year after the plaintiff first asserted her abuse of
process claim in the pending matter (and about 16 months after she
originally asserted the claim).

The Court finds that this belated

filing is contrary to the language and purpose of the invoked
procedural device, which clearly provides that the special motion
to strike may be filed within 60 days of service of the petition,
or with the Court’s permission, at a later time.

Here, it is

undisputed that the defendants did not request that this Court
strike the abuse of process claim within 60 days of service.

Nor

have the defendants requested permission to file their motion to
strike at this later time.4

Rather, the parties have participated

in motion practice on the very claim that the defendants now wish
to strike; the defendants should have availed themselves of this
screening device earlier in the proceedings, as required by the
La.C.C.P.

art.

971(C).5

Because

the

defendants’

motion

is

4

Indeed, the Court cannot consider the defendants’
position on the issue of timeliness because they have failed to
advance any arguments suggesting that their motion to strike is
timely.
5

The plaintiff questions whether the defendants have
demonstrated that the plaintiff’s claim is subject to this special
motion; that is, she suggests that it is not obvious that the claim
arises from free speech on the part of defendants “in connection
with a
public issue”.
Indeed, the defendants have repeatedly
argued that this case concerns a private contractual matter
concerning indemnity obligations.
But they also insist that
Barlow’s abuse of process claim falls within the realm of cases
contemplated by La.C.C.P. art. 971 because the defendants, in
furtherance of their constitutional right of petition, clearly had
11

untimely, IT IS ORDERED: that the special motion to strike is
DENIED.6
New Orleans, Louisiana, July 24, 2012.

______________________________
MARTIN L. C. FELDMAN
UNITED STATES DISTRICT JUDGE

a right to pursue indemnity in court on a forfeited bond. The
Court need not reach the merits of the motion to strike, however,
given its untimeliness. Any merits-inquiry into the plaintiff’s
abuse of process claim must await summary judgment motion practice,
or trial.
6

(1)

(2)

Two housekeeping matters:
In a one-sentence afterthought at the conclusion of her
opposition papers, the plaintiff requests leave of Court
to file a motion for attorney’s fees, as the prevailing
party pursuant to La.C.C.P. art. 971(B). To the extent
the plaintiff seeks an advisory ruling on attorney fees
and costs, the request is DENIED.
However, if the
plaintiff files a supported formal motion in compliance
with this Court’s Local Rules, in which she demonstrates
that, as the “prevailing party”, she is entitled to an
award of attorney fees and costs, then at that time the
Court will consider the request; any dispute solely as to
quantum will be referred to the magistrate judge.
A few months after this lawsuit was filed, and before it
was transferred to this Court, the plaintiff filed her
“first motion to certify class”. Notwithstanding this
Court’s prior Order requiring that all outstanding
motions must be re-noticed for hearing before this Court,
this motion was never noticed for hearing before this
Court.
Accordingly, IT IS FURTHER ORDERED: that the
plaintiff’s first motion to certify class (Rec.Doc. 5) is
DENIED without prejudice.
12