Richard et al v. USAA Casualty Insurance Company

Filing 18

RULING and ORDER granting in part and denying in part 4 Motion for Partial Dismissal. Plaintiff Boudreaux is DISMISSED from this action. The dismissal of Plaintiff Richard's claims is DENIED. Signed by Chief Judge Brian A. Jackson on 1/22/2018. (EDC)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA
BRIAN RICHARD, ET AL.

CIVIL ACTION

VERSUS
USAA CASUALTY INSURANCE
COMPANY

NO.: 17-00175-BAJ-EWD

RULING AND ORDER
Before the Court is the Motion to Dismiss (Doc. 4) filed by Defendant
Garrison Property and Casualty Insurance Company (“Garrison:”) on behalf of
“incorrectly named USAA Casualty Insurance Company.” Oral argument is not
necessary. For the reasons that follow, the motion to dismiss is GRANTED IN
PART and DENIED IN PART.
I.

BACKGROUND
On May 16, 2012, Plaintiff Brian Ross Richard was riding as a passenger in a

car driven by Plaintiff Lance Boudreaux. (Doc. 1-2 at ¶ 2). As Boudreaux attempted
to execute a left-hand turn in his car, another vehicle struck Richard and Boudreaux’s
vehicle. (Id. at ¶ 2). Richard suffered severe injuries. (Id. at ¶ 2).
The present cause of action relates to an earlier state court lawsuit over the
automobile accident. (See id. at ¶¶ 3–5). In that action, Richard filed suit against
Boudreaux and his insurer. (Id. at ¶ 3). Boudreaux’s insurance limit was $100,000,
and Plaintiffs allege that Richard offered to settle those claims against the insurer
and Boudreaux within the policy limit but that the insurer refused. (Id.). Richard

received a judgment of over $500,000, well in excess of Boudreaux’s policy limit. (Id.
at ¶¶ 3, 5). The insurer appealed the verdict against itself but not against Boudreaux,
the insured. (Id. at 4).
After that judgment, Richard and Boudreaux entered into a settlement
whereby Boudreaux would assign Richard any potential actions against the insurer,
in exchange for Richard not pursuing Boudreaux for any amount in excess of his
$100,000 policy with the insurer. (Doc. 4 at ¶ 5). In the settlement, Boudreaux also
waived any right of appeal he had in connection with the $500,000 judgment against
him. (Id.).
The present action was filed in Louisiana State Court by Richard and
Boudreaux, claiming that the insurer violated Boudreaux’s rights as a policyholder
by (1) not settling the claim to protect Boudreaux from an excess judgment and (2) not
appealing the judgment with respect to Boudreaux. (Doc. 1–2 at ¶¶ 3–5). The insurer
named in the suit was USAA Casualty Insurance Company (“USAA CIC”). (Id. at ¶
1). Garrison Property and Casualty Insurance Company (“Garrison”) filed a timely
notice of removal claiming that it was Boudreaux’s actual insurer. (Doc. 1 at p. 1).
In Garrison’s Corporate Disclosure Statement (Doc. 7), it clarified that it is a Texas
corporation that is a wholly owned subsidiary of USAA CIC, also a Texas corporation
(id. at p. 1).1

In a prior ruling, the Court determined that it had jurisdiction over the parties and allowed
Defendant to file an amended notice of removal explaining the basis of the Court’s jurisdiction. (Doc.
16).
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Plaintiffs bring claims for violation of La. Rev. Stat. §§ 22:1973 and 22:1892
and for breach of contract for failure to appeal. (Doc. 1-2 at ¶ 5). They argue that
under Louisiana Law, Boudreaux’s insurer was obligated to protect him from excess
judgment and under his insurance contract, was obligated to defend him on appeal.
(Id. at ¶¶ 4–5).
II.

LEGAL STANDARD
A.

Standing

Under Federal Rule of Civil Procedure 12(b)(1), a claim is “‘properly dismissed
for lack of subject-matter jurisdiction when the court lacks the statutory or
constitutional power to adjudicate’ the claim.” In re FEMA Trailer Formaldehyde
Prods. Liab. Litig., 668 F.3d 281, 286 (5th Cir. 2012) (quoting Home Builders Ass’n v.
City of Madison, 143 F.3d 1006, 1010 (5th Cir. 1998)). In order to “prevent[] a court
without jurisdiction from prematurely dismissing a case with prejudice,” a court
should consider a Rule 12(b)(1) motion for lack of subject-matter jurisdiction before
addressing any motions that concern the merits of a case. Id. at 286–87 (citing
Ramming v. United States, 281 F.3d 158, 161 (5th Cir. 2001)). A motion to dismiss
under Rule 12(b)(1) is analyzed under the same standard as a motion to dismiss under
Rule 12(b)(6). Benton v. United States, 960 F.2d 19, 21 (5th Cir. 1992).
“If a defendant makes a ‘factual attack’ upon the court’s subject matter
jurisdiction over the lawsuit, the defendant submits affidavits, testimony, or other
evidentiary materials.” Paterson v. Weinberger, 644 F.2d 521, 523 (5th Cir. 1981).
The plaintiff must then prove that subject-matter jurisdiction exists by a

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preponderance of the evidence by “submitting facts through some evidentiary
method.” Irwin v. Veterans Admin., 874 F.2d 1092, 1096 (5th Cir. 1989), aff’d sub
nom. Irwin v. Dep’t of Veterans Affairs, 498 U.S. 89 (1990) (quoting Paterson, 644 F.2d
at 531).
B.

Failure to State a Claim

When reviewing a motion to dismiss, the Court must “accept[] all well-pleaded
facts as true and view[] those facts in the light most favorable to the plaintiff.” Hines
v. Alldredge, 783 F.3d 197, 200–01 (5th Cir. 2015) (quoting True v. Robles, 571 F.3d
412, 417 (5th Cir. 2009)). Even so, a complaint must be “plausible on its face.” Bell
Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “A claim has facial plausibility when
the plaintiff pleads factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal,
556 U.S. 662, 678 (2009). “Determining whether a complaint states a plausible claim
for relief [is] . . . a context-specific task that requires the reviewing court to draw on
its judicial experience and common sense.” Id. at 679. Although the complaint need
not set out “detailed factual allegations,” it must set forth something “more than
labels and conclusions, and a formulaic recitation of the elements of a cause of action.”
Twombly, 550 U.S. at 555. On a Rule 12(b)(6) motion, the Court may consider the
pleadings, attachments to the pleadings, and “documents attached to either a motion
to dismiss or an opposition to that motion when the documents are referred to in the
pleadings and are central to a plaintiff’s claims.” Brand Coupon Network, L.L.C. v.
Catalina Mktg. Corp., 748 F.3d 631, 635 (5th Cir. 2014).

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III.

DISCUSSSION
A.

Boudreaux

Defendant argues that Boudreaux lacks standing to bring claims because he
assigned his rights to Richard. (Doc. 4-1 at p.4). Plaintiffs attached a signed copy of
the settlement agreement between Boudreaux and Richard.

(Doc. 8-3).

The

agreement provides:
1)

Plaintiff, Brian Richard, will have the exclusive right to recover
all proceeds that may be recovered through the prosecution of the
BAD FAITH ACTION. . . .

2)

In consideration of Brian Richard’s undertaking as set forth
herein, Lance Boudreaux assigns to Brian Richard all rights,
claims and causes of action Lance Boudreaux has now or may
hereafter acquire against THIRD PARTY’S [sic.] related to or
connected with the claim . . . . This assignment specifically
includes all rights related to the BAD FAITH ACTION. . . .
....

4)

Any lawsuit or proceeding to enforce the rights assigned to Brian
Richard will be instituted and maintained by Brian Richard in his
own name and at his own expense. Lance Boudreaux agrees to
execute any additional documentation reasonably required by
Brian Richard to either enforce the rights assigned herein or to
secure his interests in the proceeds of any action instituted
against the THIRD PARTY

(Doc. 8-3 at p. 3). Under the plain terms of this agreement, Boudreaux lacks
standing to bring any claims against his insurer because all causes of action were
assigned to Richard. Therefore, Boudreaux’s claims are DISMISSED.

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B.

Richard
1.

Standing

Defendant argues that Richard lacks standing to bring a claim for breach-ofcontract because Boudreaux voluntarily failed to appeal the claims against him. (Doc.
4-1 at p. 6).

It alleges that Boudreaux suffered no injury because “Boudreaux

voluntarily waived his right to appeal.” (Id.). Defendant claims that Boudreaux and
Richard “cannot enter into an agreement preventing any appeal, then make claims
against [Defendant] because no appeal was taken.” (Id.).
“To establish standing, a plaintiff must prove that (1) he has sustained an
‘injury in fact’ that is both (a) ‘concrete and particularized’ and (b) ‘actual or
imminent, not conjectural or hypothetical,’ (2) there is ‘a causal connection between
the injury and the conduct complained of,’ and (3) a favorable decision is likely to
redress the injury.” Planned Parenthood of Gulf Coast, Inc. v. Gee, 862 F.3d 445, 454
(5th Cir. 2017) (quoting Lujan v. Defs. of Wildlife, 504 U.S. 555, 560–61 (1992)).
The Court finds that Boudreaux’s settlement with, and assignment of rights
to, Richard does not affect Richard’s standing to bring suit for breach of contract. The
purported injury from the alleged failure to take an appeal is the $500,000 final
judgment entered against Boudreaux; moreover, Louisiana law provides for nominal
damages when a contract is breached and no actual damages are shown. See United
Pentecostal Church of Hodge v. Interstate Surplus Underwriters, Underwriters at
Lloyd, 368 So. 2d 1104, 1108 (La App. 2 Cir. 1979); Fiesta Foods, Inc. v. Ogden, 159

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So. 2d 577, 585 (La. App. 1 Cir. 1963). Such damages sufficiently satisfy the injuryin-fact element of standing.
2.

Failure to State a Claim

Defendant argues that Plaintiff has failed to state a claim arising out of its
alleged duty to file an appeal of an excess judgment on behalf of the insured. (Doc. 41 at p. 5). In support of this argument, Plaintiff cites a case for the proposition that
an insurer is not required to post an appeal bond for the entire excess judgment. See
Bowen v. Gov’t Emps. Ins. Co., 83-584 (La. App. 5 Cir. 5/30/84); 451 So. 2d 1196.
However, Bowen goes on to hold that “the insurer’s duty to act in good faith requires
it to assist the insured in attempting to arrange bond for the amount of the judgment
in excess of the policy limits. Because of its duty to defend in good faith, the insurer
cannot merely abandon the insured’s interest on appeal.” Id. at 1198. Reading the
pleadings in the light most favorable to Richard, he has plausibly pleaded claims
arising out of Defendant’s failure to appeal the excess judgment against Boudreaux.

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IV.

CONCLUSION
Accordingly,
IT IS ORDERED that the Motion for Partial Dismissal (Doc. 4) is GRANTED

IN PART and DENIED IN PART.
IT IS FURTHER ORDERED that Plaintiff Boudreaux is DISMISSED from
this action.
IT IS FURTHER ORDERED that dismissal of Plaintiff Richard’s claims is
DENIED.

Baton Rouge, Louisiana, this 22nd day of January, 2018.

______________________________________
BRIAN A. JACKSON, CHIEF JUDGE
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA

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