Theriot v. State Farm Mutual Automobile Insurance Co et al
Filing
98
ORDER AND REASONS granting Defendants' 56 Motion for Partial Summary Judgment Seeking Dismissal of Plaintiff's Claim for Attorney Fees. Signed by Judge Susie Morgan on 3/22/2019. (crt,Flores, T)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF LOUISIANA
KATHERYN H. THERIOT,
Plaintiff
CIVIL ACTION
VERSUS
NO. 17-1688
STATE FARM MUTUAL AUTOMOBILE
INSURANCE COMPANY, ET AL.,
Defendants
SECTION: “E” (3)
ORDER AND REASONS
Before the Court is a Motion for Summary Judgment filed by Defendants State
Farm Mutual Automobile Insurance Company, State Farm Life Insurance Company,
State Farm Fire and Casualty Insurance Company, and State Farm General Insurance
Company (“State Farm”). 1 Plaintiff Katheryn Theriot opposes the motion. 2 State Farm
filed a reply. 3 For the following reasons, the motion is GRANTED.
FACTUAL & PROCEDURAL BACKGROUND
Plaintiff Katheryn Theriot is the surviving spouse of John Patrick Theriot (“Mr.
Theriot”), who was an agent/broker for State Farm before his death on September 16,
2013. 4 The parties do not dispute that Mr. Theriot and State Farm entered into an Agent’s
Agreement which provides for the payment of certain termination payments. 5 Plaintiff
points out that the Agent’s Agreement was amended by the following contracts: (1)
Termination Payment Amendment, (2) Extended Termination Payment Amendment, (3)
Irrevocable Assignment of Extended Termination Payments, and (4) Election to Receive
R. Doc. 56.
R. Doc. 75.
3 R. Doc. 84.
4 R. Doc. 1-1 at ¶¶ 2, 6; R. Doc. 1 at ¶ 5.
5 R. Doc. 56-2 at ¶ 4; R. Doc. 75-1 at ¶ 4.
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Extended Termination Payments Under the Joint and 66-2/3% to Survivor Option. 6 The
parties do not dispute that, after Mr. Theriot’s death on September 16, 2013, State Farm
paid the Executor of Mr. Theriot’s succession one Section IV Termination Payment in the
amount of $14,471.27; the executor forwarded the payment to Plaintiff. 7
Plaintiff alleges she litigated the issue of whether she was the proper beneficiary of
the termination payments in her husband’s succession proceeding, Succession of John
Patrick Theriot, Probate Docket Number 15421, 16th Judicial District Court, St.
Martinville, Louisiana. 8 The Court takes judicial notice of the proceedings filed in this
record. 9 After Mr. Theriot’s death, the executor of his estate filed a petition for possession
to place Katheryn Theriot in possession of the termination payments. 10 Mr. Theriot’s
testamentary trust, established in favor of his children from a previous marriage, disputed
Katheryn Theriot’s rights to receive the termination payments. 11 The Louisiana Third
Circuit Court of Appeal held the termination payments are owed to Plaintiff. 12
In the instant suit, Plaintiff first alleges State Farm breached the Agent’s
Agreement in bad faith when it failed to pay her termination benefits, requiring her to
incur attorneys’ fees in the succession proceeding. 13 As a result, Plaintiff brings a cause of
action for breach of contract and breach of the duties of good faith and fair dealing,
R. Doc. 75-1 at ¶ 4.
R. Doc. 56-2 at ¶ 5; R. Doc. 75-1 at ¶ 5.
8 R. Doc. 1-1 at 9.
9 Ferguson v. Extraco Mortg. Co., 264 F. App'x 351, 352 (5th Cir. 2007) (quoting Taylor v. Charter Med.
Corp., 162 F.3d 827, 830 (5th Cir.1998) (“A court may take judicial notice of ‘a document filed in another
court . . . to establish the fact of such litigation and related filings.’”)); see also FED. R. EVID. 201.
10 R. Doc. 8-3.
11 R. Doc. 8-4.
12 Succession of Theriot, 2016-639 (La. App. 3 Cir. 5/17/17); 221 So.3d 862.
13 R. Doc. 1-1 at ¶¶13, 23.
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seeking damages including “attorneys fees and litigation expenses within the probate
proceeding.” 14
Plaintiff also alleges State Farm has breached the Agent’s Agreement, committing
fraud by concealment “[b]y refusing to provide an accounting for its partial payments,
and by refusing to reveal the data used to calculate the Termination Payments.” 15 Plaintiff
seeks an award of attorneys’ fees incurred in this proceeding, citing Louisiana Civil Code
articles 1994, 1996, and 1997, due to State Farm’s breach of contract through fraud by
concealment. 16 State Farm moves for summary judgment on Plaintiff’s claims for
attorneys’ fees incurred in both the probate proceeding and the instant proceeding. 17
LEGAL STANDARD
Summary judgment is appropriate only “if the movant shows that there is no
genuine dispute as to any material fact and the movant is entitled to judgment as a matter
of law.” 18 “An issue is material if its resolution could affect the outcome of the action.” 19
When assessing whether a material factual dispute exists, the Court considers “all of the
evidence in the record but refrain[s] from making credibility determinations or weighing
the evidence.” 20 All reasonable inferences are drawn in favor of the non-moving party. 21
There is no genuine issue of material fact if, even viewing the evidence in the light most
Id. at ¶ 13.
Id. at ¶ 21.
16 Id. at ¶ 23.
17 R. Doc. 56.
18 FED. R. CIV. P. 56; see also Celotex Corp. v. Catrett, 477 U.S. 317, 322–23 (1986).
19 DIRECTV, Inc. v. Robson, 420 F.3d 532, 536 (5th Cir. 2005).
20 Delta & Pine Land Co. v. Nationwide Agribusiness Ins. Co., 530 F.3d 395, 398–99 (5th Cir. 2008); see
also Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150–51 (2000).
21 Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994).
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favorable to the non-moving party, no reasonable trier of fact could find for the nonmoving party, thus entitling the moving party to judgment as a matter of law. 22
“[A] party seeking summary judgment always bears the initial responsibility of
informing the district court of the basis for its motion, and identifying those portions of
[the record] which it believes demonstrate the absence of a genuine issue of material fact.”
If the dispositive issue is one on which the moving party will bear the burden of
persuasion at trial, the moving party “must come forward with evidence which would
‘entitle it to a directed verdict if the evidence went uncontroverted at trial.’” 23 If the
moving party fails to carry this burden, the motion must be denied. If the moving party
successfully carries this burden, the burden of production then shifts to the nonmoving
party to direct the Court’s attention to something in the pleadings or other evidence in the
record setting forth specific facts sufficient to establish that a genuine issue of material
fact does indeed exist. 24
If the dispositive issue is one on which the non-moving party will bear the burden
of persuasion at trial, the moving party may satisfy its burden of production by either (1)
submitting affirmative evidence that negates an essential element of the non-movant’s
claim, or (2) affirmatively demonstrating that there is no evidence in the record to
establish an essential element of the non-movant’s claim. 25 If the movant fails to
affirmatively show the absence of evidence in the record, its motion for summary
judgment must be denied. 26 If the moving party successfully carries this burden, the
Hibernia Nat. Bank v. Carner, 997 F.2d 94, 98 (5th Cir. 1993) (citing Amoco Prod. Co. v. Horwell
Energy, Inc., 969 F.2d 146, 147–48 (5th Cir. 1992)).
23 Int’l Shortstop, Inc. v. Rally’s, Inc., 939 F.2d 1257, 1263–64 (5th Cir. 1991) (quoting Golden Rule Ins. Co.
v. Lease, 755 F. Supp. 948, 951 (D. Colo. 1991)).
24 Celotex, 477 U.S. at 322–24.
25 Id. at 331–32 (Brennan, J., dissenting).
26 See id. at 332.
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burden of production then shifts to the non-moving party to direct the Court’s attention
to something in the pleadings or other evidence in the record setting forth specific facts
sufficient to establish that a genuine issue of material fact does indeed exist. 27 Thus, the
non-moving party may defeat a motion for summary judgment by “calling the Court’s
attention to supporting evidence already in the record that was overlooked or ignored by
the moving party.” 28 “[U]nsubstantiated assertions are not competent summary
judgment evidence. The party opposing summary judgment is required to identify specific
evidence in the record and to articulate the precise manner in which that evidence
supports his or her claim. ‘Rule 56 does not impose upon the district court a duty to sift
through the record in search of evidence to support a party’s opposition to summary
judgment.’” 29
LAW AND ANALYSIS
State Farm moves for summary judgment on Plaintiff’s claims for attorneys’ fees
incurred in the probate proceedings, as well as those incurred in the instant proceedings,
arguing there is no statute or contractual provision entitling Plaintiff to an award of
attorneys’ fees with respect to either action. 30 Under Louisiana law, attorneys’ fees
generally are not recoverable unless authorized by statute or contract. 31 The Fifth Circuit
Id. at 322–24.
Id. at 332–33. The burden would then shift back to the movant to demonstrate the inadequacy of the
evidence relied upon by the non-movant. Once attacked, “the burden of production shifts to the nonmoving
party, who must either (1) rehabilitate the evidence attacked in the moving party’s papers, (2) produce
additional evidence showing the existence of a genuine issue for trial as provided in Rule 56(e), or (3) submit
an affidavit explaining why further discovery is necessary as provided in Rule 56(f).” Id. at 332–33, 333 n.3.
29 Ragas v. Tenn. Gas Pipeline Co., 136 F.3d 455, 458 (5th Cir. 1998) (citing Celotex, 477 U.S. at 324;
Forsyth v. Barr, 19 F.3d 1527, 1537 (5th Cir. 1994) and quoting Skotak v. Tenneco Resins, Inc., 953 F.2d
909, 915–16 & n.7 (5th Cir. 1992)).
30 R. Doc. 56.
31 State, Dept. of Transp. & Dev. v. Williamson, 597 So. 2d 439, 441 (La. 1992) (citing Huddleston v. Bossier
Bank and Tr. Co., 475 So.2d 1082 (La. 1985)).
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has explained, “[i]t is beyond peradventure that, under Louisiana law, attorney's fees are
recoverable only if they are authorized by statute or by contract.” 32
State Farm seeks judgment as a matter of law because Plaintiff cannot demonstrate
an essential element of her claim, that a contractual or statutory provision authorizes her
recovery of attorneys’ fees. The parties do not dispute the identification of the Agent’s
Agreement entered into between Mr. Theriot and State Farm. 33 Plaintiff points out that
the Agent’s Agreement was amended by several subsequent contracts. 34 There is no
question that neither the Agent’s Agreement nor the amendments provide for an award
of attorneys’ fees. 35 Accordingly, there is no contractual provision to support Plaintiff’s
claim for attorneys’ fees.
State Farm moves for judgment as a matter of law because there is also no statutory
provision permitting Plaintiff’s recovery of attorneys’ fees. State Farm argues that
attorneys’ fees are not recoverable under the code articles cited by Plaintiff in the Petition.
The Fifth Circuit has held, “[u]nder Louisiana law . . . attorney’s fees characterized as
breach of contract damages are not compensable under Article 1994 and its
corresponding statutes.” 36 To defeat State Farm’s motion for summary judgment,
Homestead Ins. Co. v. Gaurentee Mut. Life Co., 459 F. App’x 398, 404 (5th Cir. 2012) (citing Sher v.
Lafayette Ins. Co., 988 So.2d 186, 201 (La. 2008) (“Louisiana courts have long held that attorney's fees are
not allowed except where authorized by statute or contract.”); Hernandez v. Harson, 237 La. 389, 111 So.2d
320, 327 (La. 1959); Chauvin v. La Hitte, 229 La. 94, 85 So.2d 43, 45 (La. 1956) (“On numerous occasions
this court has said that ordinarily attorney's fees are not assessable as an item of damages unless provided
for by law or by contract. The clear import of the language of the opinions is that no award of them can be
made if not so particularly authorized.”)).
33 R. Doc. 56-2 at ¶ 4; R. Doc. 75-1 at ¶ 4.
34 R. Doc. 75-1 at ¶ 4.
35 Both parties have filed the Agency Agreement into the record. R. Doc. 25-2; R. Doc. 70-1. Plaintiff has
filed the amendments to the Agency Agreement into the record. R. Doc. 70-2.
36 Homestead, 459 F. App’x at 405.
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Plaintiff must draw the Court’s attention to supporting evidence overlooked or ignored by
State Farm or demonstrate a genuine issue of material fact exists. 37
I.
Probate Proceeding Attorneys’ Fees
Plaintiff contends she is entitled to an award of attorneys’ fees incurred in the
probate proceeding, under Louisiana Civil Code article 1997, because the attorneys’ fees
she incurred in the probate proceeding are economic damages incurred as a result of State
Farm’s bad faith breach of contract. 38 Louisiana Civil Code article 1997 provides, “[a]n
obligor in bad faith is liable for all the damages, foreseeable or not, that are a direct
consequence of his failure to perform.”
Plaintiff relies on Kadlec Medical Center v. Lakeview Anesthesia Associates to
support her argument that the Court may award attorneys’ fees incurred in prior litigation
as economic damages in a subsequent suit. 39 In Kadlec, a physician’s former practice
group made intentional and negligent misrepresentations in response to a credentialing
request by the physician’s new employer. 40 The practice group omitted information
regarding its termination of the physician for on-duty drug use, an investigation into the
physician’s suspicious withdrawals of a narcotic drug, and any other negative information
regarding the doctor. 41 While under the influence of drugs at his new place of
employment, the physician’s negligent performance led to the near-death of a patient,
Celotex, 477 U.S. at 332-33.
R. Doc. 75 at 3-4; R. Doc. 75-2 at 1-2.
39 Kadlec Med. Ctr. v. Lakeview Anesthesia Assoc., 2006 WL 8446278, at *1 (E.D. La. Mar. 7, 2006) aff’d
in part & rev’d in part 527 F.3d 412 (5th Cir. 2008).
40 Kadlec, 527 F.3d at 416-17
41 Id.
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leading to a medical malpractice lawsuit against the new employer. 42 As a result, the new
employer expended costs and attorneys’ fees defending the malpractice lawsuit. 43
In a subsequent suit brought by the new employer against the former practice
group, the new employer sought to recover the attorneys’ fees incurred in defending the
malpractice suit, which the new employer alleged it incurred as a result of the former
practice group’s negligent and intentional misrepresentations. 44 The Fifth Circuit upheld
an award for attorneys’ fees the new employer incurred in defending the malpractice
lawsuit, relying on Section 914(2) of the Second Restatement of Torts. 45 The Restatement
provides,
One who through the tort of another has been required to act in the
protection of his interests by bringing or defending an action against a third
person is entitled to recover reasonable compensation for the loss of time,
attorney fees and other expenditures thereby suffered or incurred in the
earlier action. 46
The Fifth Circuit explained, “Plaintiffs, due to the torts of the defendants, were required
to expend costs and attorney’s fees defending the [malpractice] lawsuit . . . In this lawsuit,
plaintiffs proved that defendants were legally responsible for their financial damages,
which included costs and attorney’s fees.” 47
Plaintiff’s arguments are not persuasive. First, Kadlec is not applicable to this case.
Kadlec involved a claim for attorneys’ fees incurred due to the tortious acts of a
defendant. 48 The reasoning of Kadlec relies on the Restatement (Second) of Torts. In this
Id. at 415.
Id. at 426.
44 Kadlec, 2006 WL 8446278, at *1 aff’d in part & rev’d in part 527 F.3d 412 (5th Cir. 2008).
45 Id. at 426.
46 RESTATEMENT (SECOND) OF TORTS § 914.
47 Kadlec, 527 F.3d at 426.
48 Id.
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case, Plaintiff brings breach of contract claims against State Farm. 49 As a result, the
reasoning of Kadlec does not apply to Plaintiff’s claim for attorneys’ fees incurred in the
probate proceeding.
Second, Plaintiff has not satisfied her burden on summary judgment of showing
there is a disputed issue of material fact as to whether she is entitled to recover attorneys’
fees under the reasoning of Kadlec. If Kadlec did apply, to recover attorneys’ fees under
this case, Plaintiff would have to show that an underlying tort by the defendant caused
her to bring or defend an action against a third party to protect her interests. 50 Plaintiff’s
statement of facts precluding summary judgment includes no facts purporting to show
that State Farm committed a tort or that State Farm’s wrongful act required Plaintiff to
take legal action against a third person. 51
Further, the Court’s review of the probate proceedings filed in this record does not
reflect that State Farm committed an underlying tortious act. 52 Instead, Mr. Theriot’s
children from a previous marriage contested Plaintiff’s right to receive the termination
payments, leading to Plaintiff’s involvement in the underlying succession litigation. 53
Because of competing claims to the termination payments, State Farm intervened in the
probate proceedings, filing a Petition in Intervention for Concursus. 54 State Farm had a
right to protect its interests and ensure it disbursed the termination payments to the
proper party. As a result, Plaintiff has failed to meet her burden on summary judgment,
R. Doc. 1-1.
RESTATEMENT (SECOND) OF TORTS § 914.
51 R. Doc. 75-2.
52 R. Docs. 8-4 to 8-16.
53 Succession of Theriot, 2016-639 (La. App. 3 Cir. 5/17/17); 221 So.3d 862; R. Doc. 8-4.
54 R. Doc. 8-6.
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and State Farm is entitled to judgment as a matter of law denying Plaintiff’s claim for
attorneys’ fees incurred in the probate proceeding.
II.
Attorneys’ Fees in the Instant Action
Plaintiff contends she is entitled to an award of attorneys’ fees in the instant action
because State Farm breached the Agent’s Agreement in bad faith and committed fraud by
concealment. 55 In the Petition, Plaintiff alleges “she is entitled to damages under
Louisiana Civil Code Article 1994, 1996 and/or 1997. State Farm’s fraud by concealment
renders it fully liable for attorneys’ fees in this proceeding.” 56
Louisiana Civil Code article 1994 provides, “[a]n obligor is liable for the damages
caused by his failure to perform a conventional obligation. Article 1996 provides, “[a]n
obligor in good faith is liable only for the damages that were foreseeable at the time the
contract was made.” The Fifth Circuit has held, “[u]nder Louisiana law . . . attorney’s fees
characterized as breach of contract damages are not compensable under Article 1994 and
its corresponding statutes.” 57
Article 1997 provides, “[a]n obligor in bad faith is liable for all the damages,
foreseeable or not, that are a direct consequence of his failure to perform.” The Louisiana
Supreme Court has held Article 1997 does not permit recovery of attorneys’ fees incurred
as a result of an obligor’s bad faith breach of contract. 58 As a result, Plaintiff may not
recover attorneys’ fees incurred in the instant proceeding as a result of State Farm’s
alleged bad faith breach of contract.
R. Doc. 75 at 7-8.
R. Doc. 1-1 at ¶ 23.
57 Homestead, 459 F. App’x at 405.
58 Delta Truck & Tractor, Inc. v. Navistar Inst’l Transp. Corp., 833 F. Supp. 587, 590-91 (W.D. La. 1993);
Sher v. Lafayette Ins. Co., 988 So. 2d 186, 201 (La. 2008).
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In response to the Motion for Summary Judgment, Plaintiff contends she can
recover attorneys’ fees incurred in the instant action under Louisiana Civil Code article
1958. Under Louisiana Law, fraud is a vice of consent which gives rise to an action to
rescind a contract. 59 When a contract is rescinded because of fraud, Louisiana Civil Code
article 1958 provides, “[t]he party against whom rescission is granted because of fraud is
liable for damages and attorneys’ fees.” When consent to a contract is vitiated by fraud
and the defrauded party chooses not to seek rescission of the contract, the defrauded party
still may recover attorneys’ fees. 60
Plaintiff’s Petition alleges State Farm committed fraud by concealment but does
not bring a cause of action for attorneys’ fees under article 1958. 61 Even if Plaintiff had
brought a cause of action pursuant to article 1958, she has not raised the facts necessary
for her to recover attorneys’ fees incurred in the instant action. Plaintiff alleges State Farm
committed fraud by concealing the data used to calculate the amount of payments and
refusing to provide her with an accounting of the payments owed. 62 Plaintiff’s allegations
regarding State Farm’s contractual fraud do not relate to consent to the formation of the
Agent’s Agreement. Plaintiff’s statement of material facts precluding summary judgment
does not contain any facts relating to fraud in the formation of the Agent’s Agreement. 63
As a result, Plaintiff has failed to raise a disputed issue of material fact regarding the
applicability of article 1958. Accordingly, Plaintiff has failed to identify a statute or
contractual provision which entitles her to an award of attorneys’ fees in the instant action
or demonstrate a genuine issue of material fact with respect to her recovery of attorneys’
Louisiana Civil Code article 1948.
Stutts v. Melton, 130 So.3d 808, 814-15 (La. 2013).
61 R. Doc. 1-1.
62 R. Doc. 1-1 at ¶¶ 21, 23.
63 R. Doc. 75-2.
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fees in the instant action. State Farm is entitled to summary judgment denying Plaintiff’s
claim for attorneys’ fees in the instant action.
CONCLUSION
IT IS ORDERED that the Motion for Partial Summary Judgment 64 filed by
Defendants State Farm Mutual Automobile Insurance Company, State Farm Life
Insurance Company, State Farm Fire and Casualty Insurance Company, and State Farm
General Insurance Company is GRANTED.
New Orleans, Louisiana, this 22nd day of March, 2019.
________________________________
SUSIE MORGAN
UNITED STATES DISTRICT JUDGE
64
R. Doc. 56.
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