Guillory v. American Modern Property & Casualty Insurance Co et al

Filing 46

ORDER granting 36 Motion to Substitute Party. Accordingly; IT IS ORDERED that the Motion to Substitute Party and/or for Leave to Amend (ECF No. 36) is hereby GRANTED. IT IS FURTHER ORDERED that, within 21 days of this Order, counsel for Plaintiff will file a First Amended Complaint in accordance with this opinion. Signed by Magistrate Judge Joseph H.L. Perez-Montes on 8/30/2024. (crt,Tice, Y)

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UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF LOUISIANA
ALEXANDRIA DIVISION
CANDICE GUILLORY,
Plaintiff

CIVIL DOCKET NO. 1:22-CV-05630

VERSUS

JUDGE DONALD E. WALTER

AMERICAN MODERN PROPERTY &
CASUALTY INSURANCE CO ET AL,
Defendants

MAGISTRATE JUDGE PEREZ-MONTES

MEMORANDUM ORDER
Before the Court is a Motion to Substitute Parties and/or Motion for Leave to
Amend (ECF No. 36) filed by Plaintiff Candice Guillory (“Guillory”).

The three

originally-named Defendants – American Modern Home Insurance Co, American
Modern Insurance Group Inc, and American Modern Property and Casualty
Insurance Company (collectively, “American Modern”) – oppose the Motion (ECF No.
38).
Because the atypical circumstances of the case as well as the relevant factors
favor leave to amend in this circumstance, Guillory should be afforded the
opportunity to amend, the Motion (ECF No. 36) should be GRANTED.
I.

Background
Guillory’s original Complaint was filed by attorneys associated with McClenny,

Moseley & Associates, PLLC (“MMA”). ECF No. 13. After identifying numerous
irregularities in hurricane-related lawsuits filed by MMA, the Court stayed this and
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similar litigation. ECF No. 4. The stay was lifted, and MMA withdrew as counsel.
ECF Nos. 16. Guillory was designated pro se. ECF No. 18.
Defendants filed a Motion to Dismiss under Federal Rule of Civil Procedure
12(b)(6). ECF No. 19. Thereafter, new counsel enrolled for Guillory and requested
the issuance of summonses. ECF Nos. 30, 31. Guillory then filed the Motion to
Substitute and/or Amend.

ECF No. 36.

No proposed amended complaint was

attached to the motion, as it was filed and docketed as a motion to substitute party.
Nevertheless, the motion seeks to correct three blatant errors in MMA’s original
filings: (1) to correct the name of the Plaintiff from “Candice Guillory” to “Clyston
Guillory” – meaning that MMA misnamed its own purported client; (2) to correct the
insurance policy number at issue; and (3) to correct the named Defendant from the
American Modern entities to “American Southern Home Insurance Company.”
Guillory asserts that American Modern was “misnamed” by MMA, and that
the correct insurance company, American Southern, is an “affiliated entity.” ECF No.
36-1 at 1. American Modern counters that the disputed policy was issued by a
“separate,” “distinct,” and “different” insurer. ECF No. 38. Nonetheless, Defendants
oppose the Motion to Amend because the previously filed Motion to Dismiss remains
pending; because Guillory does not have a viable cause of action (against American
Modern); and because Guillory’s claims are now time-barred, making any amendment
futile. ECF No. 38.
On balance, the Court cannot agree with Defendants’ position under these
unique circumstances. Defendants’ latter two arguments will be addressed in more

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depth by separate opinion addressing the Motion to Dismiss. But in sum, neither
those arguments nor the other controlling circumstances preclude leave to amend.
II.

Law and Analysis
Rule 15(a)(2) states that “a party may amend its pleading only with the

opposing party’s written consent or the court's leave. The court should freely give
leave when justice so requires.” Fed. R. Civ. P. 15. Rule 15(a) expresses “a strong
presumption in favor of liberal pleading.” Lowrey v. Texas A&M Univ. Sys., 117 F.3d
242, 245 (5th Cir. 1997).
Leave to amend is not automatic; the “decision to grant or deny a motion to
amend is in the sound discretion of the trial court.” Avatar Exploration, Inc. v.

Chevron, U.S.A., Inc., 933 F.2d 314, 320 (5th Cir. 1991) (citing Shivangi v. Dean
Witter Reynolds, Inc., 825 F.2d 885, 890 (5th Cir. 1987)). However, “unless there is
a substantial reason to deny leave to amend, the discretion of the district court is not
broad enough to permit denial.” Dussouy v. Gulf Coast Inv. Corp., 660 F.2d 594, 598
(5th Cir. 1981) (citing Lone Star Motor Import v. Citroen Cars, 228 F.2d 69, 75 (5th
Cir. 1961)). Substantial reasons to deny leave may include: “1) undue delay, 2) bad
faith or dilatory motive, 3) repeated failure to cure deficiencies by previous
amendments, 4) undue prejudice to the opposing party, and 5) futility of the
amendment.”

Smith v. EMC Corp., 393 F.3d 590, 595 (5th Cir. 2004) (citing

Rosenzweig v. Azurix Corp., 332 F.3d 854, 864 (5th Cir. 2003)).
Here, each relevant factor favors leave to amend.

Given the exceptional

circumstances involved in this case, neither undue delay nor bad faith could possibly

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be imputed to Guillory. Several of those circumstances were largely, if not solely,
responsible for any delay in this case, including original plaintiffs’ counsel’s
concerning representation and subsequent removal from the case, a court-imposed
stay, and additional and unusual proceedings prior to and after enrollment of new
plaintiffs’ counsel.1
Otherwise, there have been no previous amendments.

And if American

Modern is unaffiliated with American Southern, as has been represented to the
Court, then American Modern would be strained to argue that it will be prejudiced
by its own dismissal and replacement by the correct insurer.

The correct insurance

company will have the opportunity to raise any defenses deemed appropriate. There
is no apparent and substantial reason why leave to amend should not be “freely
given.” See Foman v. Davis, 83 S.Ct. 227, 230 (1962).
Moreover, American Modern argues that the proposed amendment would be
futile because Guillory’s claims would be prescribed. This argument would result in
a patently inequitable result for Guillory, again given the extraordinary
circumstances associated with original plaintiffs’ counsel’s representation. Added to
The Court recognizes that in many circumstances, represented parties may be “bound by
their attorney’s failings.” Granger v. Aaron's, Inc., 636 F.3d 708, 713 (5th Cir. 2011). Of
course, the failings referenced by the Granger court were neither of the kind or of the
magnitude involved in this case. Nevertheless, the Granger court explained further:
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The fact that a complainant is represented, though, does not automatically bar the
application of equitable tolling. In one precedent, we concluded that the plaintiff
“clearly did not sleep on her rights, and her attorneys, skilled or not, made an
error. Tolling is the only remedy for the regulatory violation, and it is a remedy
that fits.”

Granger, 636 F.3d at 713 (quoting Perez v. United States, 167 F.3d 913, 919 (5th Cir.
1999)). The same rationale applies here, arguably with added force.

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that inequity, again, the Court was obliged by original plaintiff’s counsel’s missteps
to impose a number of significant delays, including: a formal stay (ECF No. 4); orders
requiring atypical disclosures and proceedings to scrutinize original plaintiff’s
counsels’ representation (ECF Nos. 12, 13, 16, 18, 24); and various other delays (ECF
Nos. 24, 30-35, 41-42). See, e.g., Gomez v. Glob. Precision Sys., LLC, 636 F. Supp. 3d
746, 760 (W.D. Tex. 2022) (“As other courts have found, court-caused delay, although
admittedly part of litigation, constitutes an extraordinary circumstance for the
purposes of equitable tolling.”). Accordingly, equitable tolling is warranted.
“The doctrine of equitable tolling preserves a plaintiff's claims when strict
application of the statute of limitations would be inequitable.” Trinity Marine Prod.,

Inc. v. United States, 812 F.3d 481, 488–89 (5th Cir. 2016) (internal citation and
quotation omitted).

The doctrine should be applied “sparingly,” and only in

“exceptional circumstances.” Gomez v. Glob. Precision Sys., LLC, 636 F. Supp. 3d
746, 757 (W.D. Tex. 2022) (citing Granger, 636 F.3d at 712)).
With due caution, however, the Fifth Circuit has also cautioned against
applying a statute of limitations “too harshly.” See United States v. Patterson, 211
F.3d 927, 931 (5th Cir. 2000) (internal citation and quotation omitted). And when a
plaintiff’s failure to timely file resulted from “external factors beyond [the plaintiff’s
control,” equitable tolling is the appropriate remedy. See In re Wilson, 442 F.3d 872,
875 (5th Cir. 2006) (“A petitioner's failure to satisfy the statute of limitations must
result from external factors beyond his control; delays of the petitioner's own making
do not qualify.”) (citing Felder v. Johnson, 204 F.3d 168, 174 (5th Cir. 2000)

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(“Equitable tolling is appropriate when an extraordinary factor beyond the plaintiff's
control prevents his filing on time.”))).
For the reasons articulated above and by the Court in a previous order (ECF
No. 13), this case likely epitomizes the kind of “extraordinary circumstances” arising
from “external factors beyond [Guillory’s] control” in which a harsh application of the
statute of limitations would result in the loss of Guillory’s right to pursue relief – and
inequitably so.
III.

Conclusion
Accordingly; IT IS ORDERED that the Motion to Substitute Party and/or for

Leave to Amend (ECF No. 36) is hereby GRANTED.
IT IS FURTHER ORDERED that, within 21 days of this Order, counsel for
Plaintiff will file a First Amended Complaint in accordance with this opinion.
SIGNED on Friday, August 30, 2024.
_______________________________________
JOSEPH H.L. PEREZ-MONTES
UNITED STATES MAGISTRATE JUDGE

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