Laborde v. Northwestern Mutual Life Insurance Co

Filing 49

MEMORANDUM RULING re 32 MOTION in Limine filed by Northwestern Mutual Life Insurance Co. Signed by Judge Robert G James on 9/8/2017. (crt,Crawford, A)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF LOUISIANA
LAFAYETTE DIVISION

KENNETH J. LABORDE, M.D.

CIVIL ACTION NO. 16-0734

VERSUS

JUDGE ROBERT G. JAMES

NORTHWESTERN MUTUAL LIFE
INSURANCE CO.

MAG. JUDGE CAROL B. WHITEHURST

RULING
This is an action brought by Plaintiff Kenneth J. Laborde, M.D. (“Laborde”) against his
insurer, Defendant Northwestern Mutual Life Insurance Co. (“Northwestern”) for breach of contract,
attorney’s fees, and statutory penalties pursuant to La. Rev. Stat. § 22:1821. Laborde, a surgeon,
brought suit after Northwestern denied his application for disability benefits after he suffered a
rotator cuff injury and could no longer perform hand microsurgery.
Pending before the Court is Northwestern’s Motion in Limine [Doc. No. 32]. Northwestern
moves the Court to exclude from evidence (1) Laborde’s claims that Northwestern breached the
insurance contract by failing to provide disability benefits based on conditions he suffered after the
filing of his Complaint and which were not the subject of an amended complaint and (2) any expert
testimony by Laborde’s accountant. Laborde opposes the motion. [Doc. No. 38]. Northwestern filed
a reply memorandum. [Doc. No. 46].
For the following reasons, the Motion in Limine is GRANTED IN PART and DENIED IN
PART.

A.

Claims Not Pleaded in the Complaint
Northwestern first argues that the Court should exclude from evidence Laborde’s claims that

Northwestern breached the insurance contract by failing to provide disability benefits based on
conditions he suffered after the filing of his Complaint and which were raised for the first time in
his opposition to Northwestern’s Motion for Summary Judgment. Because the deadline for
amending the Complaint passed on March 2, 2017, Northwestern argues that Laborde cannot add
these “new claims of disability.” [Doc. No. 32, p. 2]. Instead, Northwestern contends that Laborde
should be limited to arguing that he was/is disabled based on the right rotator cuff tear that was
diagnosed on March 11, 2014.
Laborde responds that his Complaint pleads two causes of action: a breach of contract claim
for Northwestern’s refusal to pay disability benefits under several disability insurance contracts and
a claim for penalties and attorney fees under La. Rev. Stat. § 22:1821 for the alleged bad faith refusal
to pay the benefits under the disability insurance contracts. Laborde contends that the disability
insurance contracts insured him against any illness or injury which rendered him disabled in his
ability to perform his occupation as a microsurgeon, and no new claims have been added. However,
following the filing of the Complaint, Laborde had an accident causing damage to his finger and
developed a heart condition, both of which he contends have continued his disability, so that he
cannot return to performing microsurgery. Laborde placed Northwestern on notice of these
additional conditions by filing a second Request for Disability Benefits with Northwestern on June
1, 2016, six days after the Complaint was filed, Northwestern has conducted discovery, and obtained
disclosure regarding all Laborde’s medical conditions.
Northwestern responds that Laborde pled only one claim: that he is disabled from
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performing microsurgery because of his shoulder condition. Laborde failed to move to amend in a
timely manner to assert claims of later developed disabilities. Therefore, Northwestern argues that
Laborde should not be allowed to present evidence on the alleged disabilities which were never
included in a complaint or amended complaint.
During the pre-trial conference, in response to a question from the Court, Laborde’s counsel
expounded on his opposition memorandum, explaining that Laborde’s later developed conditions
have limited the number of general surgeries he can perform as well as completely preventing him
from performing microsurgery.
First, the parties apparently contest what constitutes the “claim” in this case for purposes of
amending the complaint. Northwestern characterizes Laborde’s claim as one for damages based on
the denial of disability benefits for his rotator cuff or shoulder injury. Laborde contends, in his
memorandum, that his claims are for breach of contract and statutory penalties based on
Northwestern’s denial of disability benefits and that his later developed conditions are merely
additional facts of which Northwestern has been aware and which show that he continues to be
unable to return to his occupation of microsurgery. In the pre-trial conference, Laborde’s counsel
expanded this claim to include Laborde’s inability to perform or limitation on the number of general
surgeries he performs as well.
“Under Federal Rule of Civil Procedure 8(a)(2), a [complaint] must contain a ‘short and plain
statement of the claim showing that the pleader is entitled to relief.’ As the [Supreme] Court held
in [Bell Atlantic Corp. v.] Twombly, 550 U.S. 544 . . . , the pleading standard Rule 8 announces does
not require ‘detailed factual allegations,’ but it demands more than an unadorned,
the-defendant-unlawfully-harmed-me accusation. Ashcroft v. Iqbal, 556 U.S. 662, 677-78 (2009)
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(citing Twombly, 550 U.S. at 555). In this case, there is no claim that Laborde failed to meet the
requirements of Rule 8 when he initially filed his Complaint.
However, the issue becomes whether, when, and in what manner Laborde must move to
amend his Complaint when he raises additional factual allegations and/or changes the legal theory.
As the Fifth Circuit has explained to this Court, “Under our precedent, when a claim is raised
for the first time in response to a summary judgment motion, the district court should construe that
claim as a motion to amend the complaint under Federal Rule of Civil Procedure 15(a).” Riley v. Sch.
Bd. Union Par., 379 F. App’x 335, 341 (5th Cir. 2010)(citing Stover v. Hattiesburg Pub. Sch. Dist.,
549 F.3d 985, 989 n. 2 (5th Cir. 2008); Sherman v. Hallbauer, 455 F.2d 1236, 1242 (5th Cir. 1972)).
While this rule is “particularly true” of pro se litigants, the Fifth Circuit has not limited its
application to unrepresented parties. Id.; see Sherman, 455 F.2d 1235. Under Rule 15(a), leave to
amend must be “freely given when justice so requires.” FED. R. CIV. P. 15(a); see also Foman v.
Davis, 371 U.S. 178, 182 (1962); Leffall v. Dallas Indep. Sch. Dist., 28 F.3d 521, 524 (5th Cir.1994).
Rule 15(a) “evinces a bias in favor of granting leave to amend. ” Dussouy v. Gulf Coast Inv. Corp.,
660 F.2d 594, 597 (5th Cir. 1981)). Unless there is a “substantial reason to deny leave to amend, the
discretion of the district court is not broad enough to permit denial.” Id. at 598.
Further, the Fifth Circuit case relied upon by Northwestern, U.S. ex. rel. DeKort v. Integrated
Coast Guard Sys., 475 Fed. App’x 521, 522 (5th Cir. 2012),1 does not provide reliable authority
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The Court finds that the Eleventh Circuit case cited by Northwestern, Gilmour v. Gates,
McDonald and Co., 382 F.3d 1312, 1314 (11th Cir. 2004), is not precedential. Although the case
was cited in DeKort, it stands for the proposition that the proper procedure is to amend the
complaint, rather than raise a new claim at the summary judgment stage. That point is
undisputed.
Notably, it is not proper procedure to raise a new claim at trial either, yet Rule 15(b)
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otherwise. While the Fifth Circuit did state that the plaintiff’s claim in DeKort was “raised in his
response to the defendants’ motions for summary judgment and, as such, was not properly before
the court.” (emphasis added). However, the Fifth Circuit also discusses the fact that the district
court actually considered the claim, finding that, even if properly pled, the claim had no merit. Id.
Further, the district court also considered the plaintiff’s motion to stay to conduct further discovery
and for leave to amend if such discovery proved fruitful, both of which were filed after the motions
for summary judgment. The Fifth Circuit found no error in the district court’s denial of these
motions, but only where such discovery and potential amendment would have been futile. Thus,
while a claim raised in a memorandum is not properly before a court, the DeKort decision is not
inconsistent with other Fifth Circuit decisions which prevent district courts from ignoring such
claims altogether or excluding evidence of such claims at trial. Rather, the proper procedure is to
consider under Rule 15(a)’s liberal standard whether amendment of the pleadings should be allowed
to add the new claims.
In the cases cited by Northwestern, the party attempted to assert a new claim or bring in a
new party in an effort to defeat summary judgment. In this case, Laborde did not assert a new theory
of recovery or legal “claim” for damages in his opposition memorandum in an effort to defeat
Northwestern’s legal arguments in its Motion for Summary Judgment. Laborde did, in the more
general sense, raise new factual claims to support a finding that he remains disabled and unable to
perform microsurgery because of the additional conditions of a finger injury and cardiac issues. It

provides for just such a scenario, advising the Court to allow amendment to the pleadings at trial
if “doing so will aid in presenting the merits and the objecting party fails to satisfy the court that
the evidence would prejudice that party’s action or defense on the merits.” FED. R. CIV. P. 15(b).
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is questionable to the Court whether it was necessary for Laborde to amend his Complaint at all
based on later developed facts supporting the same legal theories of recovery. The Court is even less
convinced of the necessity of amendment when it is undisputed that Northwestern had knowledge
of these additional conditions, which were made the subject of a second application for disability
benefits filed shortly after the Complaint was filed, and Northwestern had the opportunity to obtain
information about these additional conditions through discovery. Nevertheless, it is the preferable
procedure for a party to move to amend its pleadings if there is any doubt whether it should do so,
so that the record is clear.
To the extent that Laborde should have moved to amend his Complaint to include these
additional facts, the Court finds he should be granted leave to do so prior to trial. Northwestern has
suffered no prejudice,2 and it is in the interest of justice and judicial economy for Laborde to be
permitted to amend, so that trial may proceed on all the related allegations with regard to the claims
he pled: that Northwestern breached the contract of insurance based on its determination that his
occupation was not microsurgery and that it did so in bad faith. Therefore, to the extent that
Northwestern moves to exclude Laborde from offering evidence of his finger injury and cardiac
condition, that they are or were disabling, and that they prevented him from performing microsurgery
throughout the term of the policies, Northwestern’s Motion in Limine is DENIED.
However, the same analysis does not apply to Laborde’s claim that his finger injury and

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Cf. Wade v. Cycle Mart, L.P., No. A-14-CV-00427-ML, 2015 WL 4404876, at *3 (W.D.
Tex. July 17, 2015) (“The Fifth Circuit has also recognized that granting leave to amend to assert
new legal theories after the close of discovery may unduly prejudice the opposing party where
there was no opportunity or reason to explore the factual basis of the late-plead theory
during the discovery period.”) (emphasis added).
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cardiac condition also limit him in performing general surgery. The Complaint did not allege
Laborde’s occupation to be general surgery. Rather, the on-going dispute in this case has been
whether Laborde was specifically insured for his occupation of microsurgery. To the Court’s
knowledge, Northwestern did not deny a disability claim based on his inability to perform general
surgery (or perform general surgery full time). Laborde’s late amendment of his legal theory would
be prejudicial to Northwestern on the eve of trial. Therefore, to the extent that Laborde intends to
offer evidence that his finger injury and cardiac issues prevented or limited his ability to perform
general surgery, Northwestern’s Motion in Limine is GRANTED.
B.

Expert Testimony
Next, Northwestern seeks to prevent Laborde from offering the expert testimony of his

accountant, A. Anderson Hartiens (“Hartiens”), because Laborde did not disclose the identity of his
expert or provide an expert report by the March 2, 2017 deadline contained in the Court’s Scheduling
Order.
Laborde responds that he identified Hartiens as an expert in his October 4, 2016 initial
disclosures and described the testimony he would provide. Moreover, while untimely, Laborde
points out that on March 31, 2017, he provided another copy of Hartiens’ opinions and his
curriculum vitae to Northwestern. After the Court granted a motion to compel, Laborde also
provided Northwestern with his tax returns for tax years 2014-2016.
In its reply memorandum, Northwestern responds that the disclosures on March 31, 2017,
did not comply with the Scheduling Order deadline of March 2.
Rule 26 of the Federal Rules of Civil Procedure provides that a party must disclose “any
person who may be used at trial to present [expert testimony].” FED. R. CIV. P. 26(a)(2)(A). The
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expert must prepare and sign a written report containing, among other things, the expert's
qualifications, a list of publications authored by the expert in the preceding ten years, the
compensation to be paid for the study and testimony, and a listing of other cases in which the witness
has testified as an expert within the preceding four years. FED. R. CIV. P. 26(a)(2)(B). “These
disclosures shall be made at the times and in the sequence directed by the court.” Fed. R. Civ. P.
26(a)(2)(C).
Further, the Court’s Scheduling Order directs that a plaintiff’s expert information and reports
must be provided to the opposing party 180 days before the pre-trial conference, which was
calculated as March 2, 2017. [Doc. No. 17].
However, with regard to lay witnesses, Laborde was required only to identify the witness,
provide the address and telephone number for the witness, and provide subjects of information that
he may use to support his claim. FED. R. CIV. P. 26(a)(1)(A)(i); [Doc. No. 17]. By both the
Scheduling Order and the Federal Rules of Civil Procedure, Laborde is also charged with complying
with the discovery provisions.
First, there is apparently no dispute that Laborde timely complied with his initial disclosures
under Rule 26 by listing Hartiens as a potential witness and the potential basis of his testimony.
Therefore, Northwestern was certainly aware of him and the information he possessed well before
March 2, 2017.
Second, the Court has reviewed the subject of his testimony, which appears to be limited as
a reporting of Laborde’s salary for 2013-2015 and his corporate net income loss. To this extent,
Hartiens is not testifying as an expert witness, but as s lay witness. Much like a treating physician,
Hartiens is no doubt an “expert” in the area of accounting, but his testimony in this case will be as
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Laborde’s own accountant who can testify factually about his income before and after the onset of
his alleged disabilities.
Finally, even if some of Hartiens’ testimony could be characterized as expert testimony,
the Court is not inclined to impose the harsh remedy of excluding Hartiens’ testimony for a technical
violation based on the 28-day delay of providing the report, CV, and list of prior testimony. This
case is not set for trial until October 2, 2017, six months after the information was disclosed. While
the Court expects every attorney to comply with the Scheduling Order deadline or to file the
appropriate motion for extension of time, the remedy sought by Northwestern is too great when there
is no evidence that Laborde’s delay prejudiced Northwestern.
Under these circumstances, the Court declines to prevent Laborde from offering the
testimony of Hartiens, and Northwestern’s Motion in Limine is DENIED in this regard.
MONROE, LOUISIANA, this 8th day of September, 2017.

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