# GeoVera Specialty Insurance Company v. Joachin

> District Court, E.D. Louisiana · July 18, 2019

URL: https://www.frixlaw.com/law-library/cases/10184668

## Case

- **Court:** District Court, E.D. Louisiana
- **Decided:** July 18, 2019
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA

GEOVERA SPECIALTY INSURANCE CIVIL ACTION
COMPANY

VERSUS NO. 18-7577

MARIETTE JOACHIN, et al. SECTION: "G"(5)

ORDER AND REASONS
Before the Court is Third-Party Defendant Bowles & Associates, Inc’s. (“Bowles”)
“Second Rule 12(b)(6) Motion to Dismiss.”1 In this litigation, Plaintiff GeoVera Specialty
Insurance Company (“GeoVera”) alleges that Defendants Ebert Joachin and Mariette Joachin (the
“Joachins”) falsified their insurance application and filed a fraudulent insurance claim.2 The
Joachins filed a Third-Party Complaint against Bowles, their insurance broker, contending that
Bowles was negligent in procuring the insurance policy and should indemnify the Joachins in the
event that GeoVera refuses to provide coverage.3 Bowles filed the instant motion, arguing that
the Joachins’ third-party claims should be dismissed because they fail to state a claim upon which
relief can be granted.4 Having considered the motion, the memoranda in support and in
opposition, the record, and the applicable law, the Court will grant the motion on the breach of
contract claim and bad faith claims and deny the motion with respect to the other claims.

1 Rec. Doc. 47.
2 Rec. Doc. 1.
3 Rec. Doc. 5.
4 Rec. Doc. 47.
I. Background
A. Factual Background
1. GeoVera’s Claims

In the Complaint, GeoVera alleges that the Joachins filed fraudulent claims under a
homeowner insurance policy.5 According to GeoVera, on April 3, 2018, the Joachins purchased
a home at 5809 Bienvenue Avenue (the “Property”) for $55,000.00.6 GeoVera then alleges that
on April 11, 2018, the Joachins purchased from GeoVera a homeowner’s insurance policy (the
“Policy”) that was effective April 11, 2018 until April 11, 2019.7 GeoVera asserts that “[t]he
dwelling had termite damage, missing sheetrock, and other damage” that the Joachins failed to
disclose on their insurance application.8 GeoVera contends that on May 9, 2018, a fire caused
substantial damage to the Property, and on May 10, 2018, the Joachins filed an insurance claim
for $170,000.00 under the Policy.9 On June 6, 2018, the Property was allegedly demolished by
an order of the Jefferson Parish regulatory department.10

GeoVera avers that after the fire, it began an investigation regarding the claim and
requested that the Joachins submit to an Examination Under Oath (“EUO”) on July 12, 2018.11
GeoVera alleges that during the EUO, it learned that numerous repairs were being made to the
property at the time of fire, the Joachins had not yet moved into the Property, and the Joachins

5 Rec. Doc. 1.
6 Id. at 2.
7 Id. at 2–3.
8 Id. at 3.
9 Id.
10 Id. at 4.
11 Id. at 3–4.
had connected the electricity at the Property but no other utilities.12 GeoVera also contends that
the fire department investigation determined that the fire was accidental, but the results of the
police investigation are still unknown, and the Joachins stated during the EUO that the prior
owner of the Property had been arrested for the fire.13

GeoVera seeks declaratory judgment on the following: (1) the Property does not qualify
as “residence premises” under the Policy because the Joachins never resided at the property; (2)
the Joachins engaged in “misrepresentations” which voided the Policy when they indicated on
their application that they had not been subject to foreclosure, that the Property did not have
unrepaired damage, that the Property had public utilities in service, and that the Property was not
under renovation; (3) the Policy does not cover “vandalism and mischief” if the Court finds that
the Property was vacant and the prior owner started the fire; (4) the Property is subject to a
“vacancy exclusion” under Louisiana law if it was vacant more than sixty days; and (5) the
Joachins created an “increased hazard” of fire by leaving the property vacant.14 Based on these
findings, GeoVera urges the Court to declare that the Policy did not cover the Property.15

2. The Joachins’ Third-Party Claims
In the Third-Party Complaint, the Joachins assert that they enlisted the services of Bowles
to assist them in procuring homeowner’s insurance, and Bowles is responsible for any
deficiencies in the Joachins’ insurance application.16 According to the Complaint, the Joachins

12 Id. at 3–5.
13 Id. at 5.
14 Id. at 9–15.
15 Id. at 15.
16 Id. at 21.
provided Bowles with honest information regarding their plans for the Property and Bowles
completed all necessary forms using this information.17 The Joachins allege that Bowles promised
them that if the Joachins signed the forms, they would have an insurance policy, and because of
their limited communication skills, the Joachins fully relied on Bowles’ representations.18 The

Joachins now assert that if the Joachins are found to have misrepresented facts in their application
and are denied insurance coverage because of these misrepresentations, Bowles should be held
liable.19 Therefore, in the event that they are found liable, the Joachins seek indemnification from
Bowles and additional damages for negligence, breach of contract, detrimental reliance, and
failure to use reasonable diligence.20
B. Procedural Background
On August 10, 2018, GeoVera filed a Complaint against the Joachins.21 On September 5,
2018, the Joachins filed an answer, counterclaims against GeoVera, and a Third-Party Complaint
against Bowles.22 On November 5, 2018, Bowles filed a motion to dismiss the third-party
complaint.23 On April 29, 2019, the Court denied the motion.24 The Court found that the Joachins

had not stated a claim for negligence, breach of contract, detrimental reliance, or failure to

17 Id.
18 Id.
19 Id. at 22.
20 Id.
21 Rec. Doc. 1.
22 Rec. Doc. 5.
23 Rec. Doc. 14.
24 Rec. Doc. 33.
exercise reasonable diligence.25 However, rather than dismissing the claims at that time, the Court
granted the Joachins leave to amend the third-party complaint.26 On May 13, 2019, the Joachins
filed an amended third-party complaint.27

On June 28, 2019, the Court granted a motion to dismiss filed by GeoVera and dismissed
Plaintiff’s counterclaim against GeoVera.28 On July 18, 2019, the Court granted a motion for
summary judgment filed by GeoVera, finding that GeoVera was entitled to judgment in its favor
on the original complaint because there were no genuine issues of fact in dispute regarding the
insurance policy not providing coverage for the property.29
On May 28, 2019, Bowles filed the instant “Second Rule 12(b)(6) Motion to Dismiss.”30
On June 11, 2019, the Joachins filed an opposition.31 With leave of Court, on June 19, 2019,
Bowles filed a reply in support of the motion.32
II. Parties’ Arguments
A. Bowles’ Arguments in Support of the Motion to Dismiss

In the instant motion, Bowles urges the Court to dismiss the Joachins’ third-party claims
because the Joachins still fail to state a claim for breach of contract, negligence, detrimental

25 Id.
26 Id.
27 Rec. Doc. 35.
28 Rec. Doc. 95.
29 Rec. Doc. 127.
30 Rec. Doc. 47.
31 Rec. Doc. 57.
32 Rec. Doc. 77.
reliance, or failure to exercise reasonable diligence.33 First, Bowles contends that the Joachins
fail to state a claim for negligence because the Joachins do not properly allege that Bowles
breached a duty.34 Bowles insists that the Joachins cannot claim that Bowles breached a duty to

assist the Joachins in correctly completing their insurance application because Louisiana law
places a duty on the insured to ensure that the application is correct.35 Further, Bowles avers that
in the EUO with GeoVera, the Joachins confirmed that they verified that all of their responses
were accurate.36 According to Bowles, where the Joachins fail to identify any breach of a duty,
they fail to state a claim for negligence.37
Next, Bowles argues that the Joachins cannot state a claim for breach of contract because
they do not plead facts “alleg[ing] exactly what Bowles did to breach the alleged contract.”38
Similarly, Bowles avers that the Joachins do not state a claim for detrimental reliance because
even after the Joachins amended the third-party complaint, they “have still not alleged any
particular representations or misrepresentations” which Bowles made to the Joachins.39

Additionally, Bowles contends that the Joachins do not plead a cognizable claim for
failing to exercise reasonable diligence in procuring the insurance.40 Though Bowles admits that
the Joachins plead the first element of undertaking the task of procuring insurance, Bowles insists

33 Rec. Doc. 47-1 at 4.
34 Id. at 5–6.
35 Id. at 5.
36 Id. at 5–6.
37 Id. at 6.
38 Id. at 7.
39 Id. at 9.
40 Id. at 9–10.
that the Joachins do not prove the second element—that Bowles failed to acquire the requested
insurance.41 On the contrary, Bowles argues that the Joachins have previously admitted that
Bowles procured an insurance policy for the Joachins.42 Bowles then argues that the Joachins

cannot assert that Bowles procured the wrong policy because under Fifth Circuit precedent, where
an agent procures the requested insurance, it is the duty of the insured to assess whether the policy
actually meets their needs.43 Bowles contends that the agent cannot be held responsible if the
insured did not adequately determine the coverage they needed or read the policy terms.44 Thus,
Bowles argues that the Joachins fail to state a claim for failure to exercise reasonable diligence.45
Finally, Bowles asserts that though the Joachins did not include a claim for bad faith
pursuant to Louisiana Revised Statute § 22:1892 and 22:1973 in the original third-party
complaint, it appears that the Joachins have now included the claim in the amended complaint.46
Bowles avers that Sections 1892 and 1973 only apply to insurance companies and not brokers.47
Thus, Bowles argues, the bad faith claims alleged in the amended third-party complaint should
be dismissed.48 Because Bowles avers that the Joachins do not plead facts to support any of the

Joachins’ claims, Bowles requests that the Court grant the motion to dismiss all claims.49

41 Id. at 10.
42 Id. (citing Rec. Doc. 5 at 16).
43 Id. at 10–11.
44 Id. at 11.
45 Id.
46 Id. at 11.
47 Id.
48 Id.
49 Id.
B. The Joachins’ Arguments in Opposition to the Motion to Dismiss
In opposition, the Joachins argue that the Court should deny Bowles’ motion to dismiss
because the motion should be converted into a motion for summary judgment, and the information
obtained in discovery supports the Joachins’ claims.50 The Joachins begin by stating that during

the depositions of Bowles’ corporate representatives Derek Bowles and Niki Marchand, the
Joachins discovered several key facts which support their four claims against Bowles.51 The
Joachins assert that Niki Marchand (“Marchand”), the agent who sold the Joachins the GeoVera
policy, admitted during her deposition that Marchand knew the Joachins did not speak English as
a first language, may have had difficulty understanding, and still failed to provide an interpreter.52
The Joachins also assert that in submitting the Joachins’ insurance application to GeoVera,
Marchand failed to ascertain whether the Joachins had ever filed for bankruptcy and failed to
accurately report to GeoVera that the Joachins did not reside at the property on the date the Policy
was purchased.53 Finally, the Joachins allege that Marchand admits that she only provided the

Joachins with an application for a homeowner policy and did not offer to sell the Joachins a
builder’s risk insurance policy or a policy that would cover a vacant property.54
The Joachins assert that under Federal Rule of Civil Procedure 12(d), “[t]he Court is
granted discretion to convert the motion to dismiss to a motion for summary judgment,” and “if

50 Rec. Doc. 57 at 8–9.
51 Id. at 2–4.
52 Id.
53 Id. at 3–4.
54 Id. at 4–5.
extrinsic material is not excluded by the Court,” this conversion is required.55 The Joachins adopt
their argument from their opposition to Bowles’ first motion to dismiss to assert that in the instant
motion, Bowles continues to rely on statements in GeoVera’s complaint and transcripts of the

EUO that are outside the pleadings.56 The Joachins also argue that because the Joachins
discovered essential facts during the aforementioned depositions, the deposition transcripts and
attached exhibits are critical to supporting the Joachins’ claims.57 Therefore, the Joachins contend
that the Court should convert Bowles’ motion into a motion for summary judgment to consider
all the extrinsic evidence.58 If, however, the Court proceeds in considering the motion under
12(b)(6), the Joachins contend that they properly pleaded all four claims against Bowles.59
Regarding the negligence claim, the Joachins assert that in the amended third-party
complaint, they allege that Bowles had a duty to procure and provide them with a correct
insurance policy.60 The Joachins assert that the complaint alleges that Bowles breached that duty
by failing to secure such a policy and this failure caused the Joachins damage.61 The Joachins

also assert that Marchand was an insurance agent and not merely a broker, and the Joachins cite
the Louisiana First Circuit Court of Appeal case Crayton v. Sentry Insurance Company,62 for the
proposition that as an insurance agent, Bowles had a duty to exercise reasonable diligence in

55 Id. at 8.
56 Id. at 8–9.
57 Id.
58 Id.
59 Id. at 10–17.
60 Id. at 12.
61 Id.
62 612 So.2d 767 (La. App. 1 Cir. 1992).
providing the Joachins with an insurance policy.63 The Joachins then list the following actions as
Bowles’ breaches of its duty: failure to provide a translator, failure to ask all pertinent questions
in completing the application, failure to recommend the proper insurance for the property, and
failure to state on the Joachins’ application that they did not yet reside at the property.64

The Joachins also contest Bowles’ assertion that the Joachins had a duty to read the
application and verify that it provided their desired policy.65 Bowles contends that Marchand
admitted in her deposition that she did not review the application with the Joachins and did not
allow the Joachins to read the policy; Marchand only handed the Joachins the application and told
them to sign.66 Therefore, the Joachins assert that ”Bowles’ negligence is apparent from the face
of the Amended Complaint.”67
Similarly, the Joachins assert that they pleaded a claim for breach of contract because the
amended third-party complaint alleges that a contract was formed where Bowles was obligated
to procure and provide a correct insurance policy.68 The Joachins assert that “[b]ecause Bowles

failed to perform its obligation—for the reasons described supra—and because that failure
damaged the Joachins (the obligee), Bowles breached its contract with the Joachins.”69
Regarding the claim for detrimental reliance, the Joachins point to the allegation in the
amended third-party complaint that Bowles purported to secure a policy for the Joachins and

63 Rec. Doc. 57 at 11.
64 Id. at 11–12.
65 Id. at 10–11.
66 Id. at 11.
67 Id. at 13.
68 Id.
69 Id.
Bowles could have expected the Joachins to rely on this representation.70 The Joachins also assert
that in the amended complaint, they allege that they “justifiably relied on the conduct of Bowles
in filling out the application and on the correctness of the resulting Policy itself.”71 Finally, the

Joachins aver that this reliance was detrimental because Bowles’ failure to adequately insure the
Joachins resulted in the Joachins not having coverage for the damage to their home.72 Therefore,
the Joachins assert that they pleaded a claim for detrimental reliance.73
Finally, the Joachins contend that they plead a claim for failure to exercise reasonable
diligence because the amended third-party complaint alleges that “(1) Bowles undertook the risk
of procuring correct and adequate insurance for 5809 Bienvenue; (2) Bowles failed to use
reasonable diligence in securing the Policy, as indicated by Geovera’s denial of coverage and
lawsuit against the Joachins…and (3) the Joachins relied on Bowles to secure a specific type of
insurance…and Bowles represented that such coverage was provided...”74 The Joachins cite the
Fifth Circuit case Offshore Prod. Contractors, Inc. v. Republic Underwriters Ins. Co., to support

the argument that “an insurance agent is more than a ‘mere order taker’ for the insured… [h]is
fiduciary duties include advising the client with regard to recommended coverage…an
undertaking to procure insurance [must be construed as] an agreement by the agent to provide
coverage for the client’s specific concerns.”75 The Joachins assert that the deposition transcripts

70 Id. at 14–15.
71 Id. at 15.
72 Id. at 14.
73 Id. at 15.
74 Id. at 17.
75 Id. at 15 (citing 910 F.2d 224, 229 (5th Cir. 1990)).
illustrate how Bowles failed to use reasonable diligence, especially in the following: failing to
provide a translator, failing to ask all pertinent questions in completing the application, failing to
recommend the proper insurance for the property, and failing to state on the Joachins’ application
that they did not yet reside at the property.76 Accordingly, the Joachins insist that they state a

claim for failure to exercise reasonable diligence.77
In summary, the Joachins request that the Court convert the motion to dismiss into a
motion for summary judgment in order for the Court to consider Bowles’ use of GeoVera’s
complaint and the EUO transcripts and the evidence obtained in the deposition transcripts.78
However, if the Court declines to convert the motion, the Joachins argue that they fully plead
each of their claims, and Bowles’ motion to dismiss should be denied.79 Alternatively, the
Joachins request that the Court allow leave to amend the third-party complaint to include facts
obtained during the depositions.80
C. Bowles’ Arguments in Further Support of the Motion to Dismiss

In reply, Bowles first argues that the motion should not be converted into a motion for
summary judgment because Bowles did not attach any extrinsic documents to its motion and the
non-moving party should not be allowed to “unilaterally convert another party’s Rule 12(b)(6)
motion.”81 Thus, Bowles insists that the deposition transcripts and the corresponding exhibits

76 Id. at 16.
77 Id. at 17.
78 Id. at 17–18.
79 Id. at 17–18.
80 Id. at 18.
81 Rec. Doc. 77 at 1–2.
should be stricken from the record and not considered as part of the motion to dismiss because
such filings are improper on a motion to dismiss.82
Bowles then asserts that under a Rule 12(b)(6) standard, the Joachins fail to properly plead
any of their asserted claims.83 Regarding negligence, Bowles argues that the Joachins cannot

prove causation because their failure to confirm that the application was correct is the actual cause
of the GeoVera policy not providing coverage for the Property.84 Bowles also contends that it did
not have a duty to recommend a builders risk policy or vacancy policy because “‘Louisiana does
not impose a duty on an agent to identify a client’s coverage needs and assess what type and
amount of coverage would sufficiently meet the client’s needs.’”85 Bowles insists that Louisiana
law places the burden on the client to ensure that he procures the insurance he needs, and this is
true regarding whether the client worked with an insurance broker or an insurance agent.86
On the breach of contract claim, Bowles alleges that the Joachins still fail to point to facts
in the amended third-party complaint wherein the Joachins detail the type of contract formed
between the parties, the terms of the contract, or Bowles obligations under the contract.87 Bowles

argues that because the Joachins plead “zero details about this alleged contract,” the breach of
contract claim fails.88 Regarding the detrimental reliance claim, Bowles contends that the
“amended third-party complaint does not expressly identify any alleged representations,” and the

82 Id. at 2.
83 Id. at 2–7.
84 Id. at 3.
85 Id. (quoting Isidore Newman Sch. v. J. Everett Eaves, Inc., 09-2161, p. 7 (La. 7/6/10))
86 Id. at 3–4.
87 Id. at 4.
88 Id.
Joachins do not allege that any of Bowles’ representatives told the Joachins that they would be
“adequately insured” or have a policy that covered specific perils.89 Bowles asserts that these
representations were simply assumed by the Joachins, but even if Bowles’ agent made such
statements, they would not be sufficient to support a detrimental reliance claim.90

Next, Bowles argues that the Joachins do not state a claim for failure to exercise
reasonable diligence because the allegations in the amended third-party complaint rely on Bowles
having a duty to procure the right insurance for the Joachins, but Louisiana law has explicitly
acknowledged that an agent’s duty to exercise reasonable diligence does not include an obligation
to advise a client regarding a specific type of insurance.91 Bowles argues that the only exception
to this standard is when “there is a ‘special relationship’ between the insurance agent and the
insured, but no such relationship has been alleged in the Joachins’ amended third-party
complaint.”92 Therefore, Bowles asserts that the Joachins do not state a claim for failure to
exercise reasonable diligence.93

Finally, Bowles contends that the Joachins’ bad faith claims should be dismissed because
the claims are not valid under Louisiana law and the Joachins did not contest this fact in their
opposition.94 Accordingly, Bowles argues that the Joachins fail to plead any of their asserted
claims, and Bowles urges the Court to grant the motion to dismiss.95

89 Id. at 5.
90 Id. at 5–6.
91 Id. at 6.
92 Id. at 7.
93 Id.
94 Id.
95 Id.
III. Legal Standard
Federal Rule of Civil Procedure 12(b)(6) provides that an action may be dismissed “for
failure to state a claim upon which relief can be granted.”96 A motion to dismiss for failure to
state a claim is “viewed with disfavor and is rarely granted.”97 “To survive a motion to dismiss,

a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim for relief that
is plausible on its face.’”98 “Factual allegations must be enough to raise a right to relief above the
speculative level.”99 A claim is facially plausible when the plaintiff has pleaded facts that allow
the court to “draw a reasonable inference that the defendant is liable for the misconduct
alleged.”100
On a motion to dismiss, asserted claims are liberally construed in favor of the claimant,
and all facts pleaded are taken as true.101 However, although required to accept all “well-pleaded
facts” as true, a court is not required to accept legal conclusions as true.102 “While legal
conclusions can provide the framework of a complaint, they must be supported by factual
allegations.”103 Similarly, “[t]hreadbare recitals of the elements of a cause of action, supported

96 Fed. R. Civ. P. 12(b)(6).
97 Kaiser Aluminum & Chem. Sales, Inc. v. Avondale Shipyards, Inc., 677 F.2d 1045, 1050 (5th Cir. 1982).
98 Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570
(2008)).
99 Twombly, 550 U.S. at 556.
100 Id. at 570.
101 Leatherman v. Tarrant Cnty. Narcotics Intelligence & Coordination Unit, 507 U.S. 163, 164 (1993); see
also Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322–23 (2007).
102 Iqbal, 556 U.S. at 677–78.
103 Id. at 679.
by mere conclusory statements” will not suffice.104 The complaint need not contain detailed
factual allegations, but it must offer more than mere labels, legal conclusions, or formulaic
recitations of the elements of a cause of action.105 That is, the complaint must offer more than an

“unadorned, the defendant-unlawfully-harmed-me accusation.” 106 From the face of the
complaint, there must be enough factual matter to raise a reasonable expectation that discovery
will reveal evidence as to each element of the asserted claims.107 If factual allegations are
insufficient to raise a right to relief above the speculative level, or if it is apparent from the face
of the complaint that there is an “insuperable” bar to relief, the claim must be dismissed.108
IV. Analysis
In the instant motion, Bowles urges the Court to dismiss the Joachins’ third-party claims
because the Joachins fail to state a claim for breach of contract, negligence, detrimental reliance,
or failure to exercise reasonable diligence.109 Bowles also argues that the Joachins improperly
plead claims for bad faith under Louisiana Revised Statues 22:1892 and 22:1973.110 In

opposition, the Joachins argue that Bowles relies on extrinsic evidence to support its motion and
the Joachins would like to utilize deposition transcripts to support their claims. Thus, the Joachins

104 Id. at 678.
105 Id.
106 Id.
107 Lormand v. U.S. Unwired, Inc., 565 F.3d 228, 257 (5th Cir. 2009).
108 Carbe v. Lappin, 492 F.3d 325, 328 n.9 (5th Cir. 2007); Moore v. Metro. Human Serv. Dep’t, No. 09-
6470, 2010 WL 1462224, at * 2 (E.D. La. Apr. 8, 2010) (Vance, J.) (citing Jones v. Bock, 549 U.S. 199,
215 (2007)).
109 Rec. Doc. 47-1 at 2–3.
110 Id. at 11.
request that the Court convert the motion to dismiss into a motion for summary judgment.111 The
Joachins also argue that they clearly plead facts in support of all their claims.112
As an initial matter, the Court notes that Louisiana Revised Statutes §§ 22:1892 and
22:1973 only provide for bad faith claims against insurance companies.113 Further, the Joachins

do not oppose Bowles’ assertion that they fail to state a claims for bad faith. Therefore, the Court
will dismiss these claims. The Court will address each of Bowles’ other arguments in turn.
A. Whether the Court Should Convert the Motion into a Motion for Summary Judgment
The Joachins argue that the Court should convert the motion to dismiss into a motion for
summary judgment because Bowles references GeoVera’s complaint and the EUO transcripts in
the motion.114 The Joachins also assert that the deposition transcripts they attached to the
opposition include essential facts that will support their claims.115 Federal Rule of Civil Procedure
12(d) provides that with respect to a motion to dismiss, if “matters outside the pleadings are
presented to and not excluded by the court, the motion must be treated as one for summary
judgment[.]”116

Here, Bowles references GeoVera’s complaint and the EUO transcripts in the motion, but
for the reasons that follow, it is unnecessary for the Court to consider these documents in deciding
this motion. Therefore, the Court will not consider these documents in deciding the instant motion

111 Rec. Doc. 57 at 8–9.
112 Id. at 10–17.
113 La. Stat. Ann. § 22:1892; La. Stat. Ann. § 22:1973.
114 Rec. Doc. 57 at 8–10.
115 Id.
116 Fed. R. Civ. P. 12(d).
to dismiss. Similarly, the Court finds that the Joachins’ attachments to the motion do not affect
the Court’s analysis of whether the Joachins state claims upon which relief can be granted.
Therefore, the Court will also not consider the Joachins’ attachments. Accordingly, the Court will

not convert the motion to dismiss into a motion for summary judgment.
B. Whether the Joachins State a Claim for Breach of Contract
Bowles argues that the Joachins cannot state a claim for breach of contract because they
do not plead facts detailing the type of contract formed between the parties, the terms of the
contract, or Bowles obligations under the contract.117 Under Louisiana law, to assert a breach of
contract claim, the plaintiff must show: “(1) the obligor undertook an obligation to perform; (2)
the obligor failed to perform the obligation, resulting in a breach; and (3) the failure to perform
resulted in damages to the obligee.”118 “[The] party who demands performance of an obligation
must prove the existence of the obligation.”119
In the amended third party complaint, the Joachins allege that they “sought an insurance

policy with Bowles & Associates, by which a contract was formed in that Bowles & Associates
was then obligated to procure and provide a correct insurance policy to the Joachins.”120 Though
these allegations suggest that a contractual relationship may have existed, the allegations are
vague and insufficient to plausibly allege the existence of an actual contract.121 The Joachins fail
to assert any facts detailing the manner in which this contract was formed, the exact terms of the

117 Rec. Doc. 77 at 4–5.
118 Sanga v. Perdomo, 14-609 (La. App. 5 Cir. 12/30/14), 167 So. 3d 818, 822; see La. Civ. Code art. 1994;
Favrot v. Favrot, 10–0986 (La. App. 4 Cir. 02/09/11), 68 So.3d 1099, 1109.
119 La. Civ. Code Ann. art. 1831.
120 Rec. Doc. 35 at 4–5.
121 See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2008)).
contract, and whether the contract was written or oral. Louisiana law does allow for “[a]n oral
contract for more than five hundred dollars [to] be proved by the testimony of ‘one witness and
other corroborating circumstances.’”122 However, the Joachins do not allege that an oral contract

existed or that the existence of this contract can be corroborated by corroborating circumstances.
Therefore, the Joachins fail to state a claim for breach of contract and the Court will dismiss this
claim.
C. Whether the Joachins State a Claim for Detrimental Reliance
Bowles contends that the “amended third-party complaint does not expressly identify any
alleged representations,” and the Joachins do not allege that any of Bowles’ representatives told
the Joachins that they would be “adequately insured” or have a policy that covered specific
perils.123 Under Louisiana law, “[a] party may be obligated by a promise when he knew or should
have known that the promise would induce the other party to rely on it to his detriment and the
other party was reasonable in so relying.”124 To establish a claim of detrimental reliance a plaintiff

must demonstrate: “(1) a representation by conduct or word; (2) made in such a manner that the
promisor should have expected the promisee to rely upon it; (3) justifiable reliance by the
promisee; and (4) a change in position to the promisee’s detriment because of the reliance.”125
In the amended third-party complaint, the Joachins allege that “[t]he representative of
Bowles & Associates expressed an understanding of [the Joachins’ needs] and explained that

122 Meredith v. La. Fed’n of Teachers, 209 F.3d 398, 403 (5th Cir. 2000) (quoting La. Civ. Code Ann. art.
1846).
123 Rec. Doc. 77 at 5.
124 La. Civ. Code Ann. art. 1967.
125 In re Ark-La-Tex Timber Co., Inc., 482 F.3d 319, 334 (5th Cir. 2007) (quoting Suire v. Lafayette City-
Par. Consol. Gov't, 907 So. 2d 37, 59 (La. 2005)).
Bowles & Associates would obtain insurance for the Joachins based on their needs.”126 The
Joachins also allege that “Bowles & Associates told the Joachins that they had their best interest
at heart and that they would find them appropriate insurance for their needs.”127 The Joachins

then state that they “justifiably relied upon the conduct of Bowles” and was damaged by this
reliance.128 Therefore, the Joachins allege that in utilizing Bowles’ services for procuring an
insurance policy, Bowles represented to the Joachins that it would help them select a policy that
would cover their specific needs.
Bowles asserts that even if its agents made such representations, they are insufficient to
support a detrimental reliance claim.129 In support of this argument, Bowles cites a case from the
Middle District of Louisiana and Louisiana Fourth Circuit Court of Appeals.130 Bowles avers that
in each of these cases, the court held that an agent’s representation that the insured was “fully
covered” was insufficient to constitute negligent misrepresentation.131 These case are clearly
distinguishable from the circumstances here because the Joachins’ claim is for detrimental

reliance, not negligent representation. Whether the statements of Bowles’ agents rise to the level
of negligence is irrelevant to whether they made such statements that the Joachins detrimentally
relied upon. The Joachins clearly allege that Bowles’ agents made statements upon which the
Joachins’ relied, and there was a change of position to the Joachins’ detriment because of the

126 Rec. Doc. 35 at 3.
127 Id.
128 Id.
129 Rec. Doc. 77 at 5–6.
130 Id. (citing City Blueprint & Supply Co. v. Boggio, 2008-1093 (La. App. 4 Cir. 12/17/08), 3 So. 3d 62,
66; Feucht v. Safeco Ins. Co. of Am., No. 11-550, 2012 WL 832355 (M.D. La. 2012)).
131 Id.
reliance. This is enough to state a plausible claim for relief. Therefore, the Court will deny
Bowles’ motion to dismiss the detrimental reliance claim.
D. Whether the Joachins State a Claim for Failure to Exercise Reasonable Diligence

Bowles contends that the Joachins do not plead a claim for failure to exercise reasonable
diligence because Louisiana law has explicitly acknowledged that an agent’s duty to exercise
reasonable diligence does not include an obligation to advise a client regarding a specific type of
insurance.132 Under Louisiana law, “[a]n insurance agent who undertakes to procure insurance
for another owes an obligation to his client to use reasonable diligence in attempting to place the
insurance requested and to notify the client promptly if he has failed to obtain the requested
insurance.”133 In order to recover for a loss arising out of the failure of an insurance agent to
obtain insurance coverage, a plaintiff must prove:
(1) an undertaking or agreement by the insurance agent to procure insurance; (2)
failure of the agent to use reasonable diligence in attempting to place the insurance
and failure to notify the client promptly if he has failed to obtain the insurance; and
(3) actions by the agent warranting the client’s assumption that the client was
properly insured. 134

Bowles admits that the Joachins properly pleaded the first element.135 It contests,
however, that the Joachins pleaded facts alleging that Bowles’ failed to procure the policy that it
undertook to provide.136 In the amended third-party complaint, the Joachins allege the following:
[T]he Joachins advised Bowles & Associates the following: (1) that the 5809
Bienvenue Avenue, Marrero, Louisiana home was to be their primary residence;

132 Rec. Doc. 77 at 6–7.
133 Karam v. St. Paul Fire & Marine Ins. Co., 281 So. 2d 728, 730 (La. 1973).
134 Offshore Prod. Contractors, Inc. v. Republic Underwriters Ins. Co., 910 F.2d 224, 229 (5th Cir. 1990)
(internal citations omitted).
135 Rec. Doc. 47-1 at 9.
136 Id.
(2) that they (the Joachins) were currently residing at 2304 S. Parc Green Street,
Harvey, Louisiana 70058; and (3) they (the Joachins) were going to perform some
repair work in the home prior to moving into the home. The representative of
Bowles & Associates expressed an understanding of this and explained that Bowles
& Associates would obtain insurance for the Joachins based on their needs.137

The Joachins also allege that “Bowles & Associates told the Joachins that they had their best
interest at heart and that they would find them appropriate insurance for their needs.”138
While Louisiana law does not recognize a duty owed by an insurance agent to
spontaneously advise or procure any specific type or amount of insurance coverage for a client,139
there are some instances where an insurance agent can be held liable for failing to advise the
client of recommended coverage.140 In Offshore Prod. Contractors, Inc. v. Republic Underwriters
Ins. Co., the Fifth Circuit held that:
Under this scenario, an insurance agent is more than a “mere order taker” for the
insured. His fiduciary duties include advising the client with regard to
recommended coverage, investigating and ascertaining the financial condition of
prospective companies, and notifying the insured of policy cancellations or
terminations. Where an agent is familiar with the insured's business, has reason to
know the risks against which an insured wants protection, and has experience with
the types of coverage available in a particular market, we must construe an
undertaking to procure insurance as an agreement by the agent to provide coverage
for the client's specific concerns.141

The Fifth Circuit also stated that “[w]here an insurance broker has experience in a particular field,
that broker should possess reasonable knowledge of the general types of policies available,
understand their different terms, and explore the specific coverage available in the area in which

137 Rec. Doc. 35 at 2–3.
138 Id. at 3.
139 Isidore Newman School v. J. Everett Eaves Inc., 2009–2161 (La. 7/6/10); 42 So. 3d 352.
140 Offshore Prod. Contractors, Inc., 910 F.2d at 229–30.
141 Id. at 230 (internal citations omitted).
[the client] seeks to be protected. Proper diligence requires the insurance broker to ‘canvass the
market’ and to be informed about different companies and variations in the available terms.’”142
Subsequent to the Fifth Circuit’s holding in Offshore Production, the Louisiana Supreme
Court decided Isidore Newman Sch. v. J. Everett Eaves, Inc..143 In Isidore Newman, the plaintiff

school sued its insurance agent because its insurance policy did not cover significant tuition losses
it had incurred as a result of Hurricane Katrina.144 The Louisiana Supreme Court examined a line
of state and federal cases in which courts had denied that an insurance agency had a duty to
independently assess the needs of the client and advise the client regarding a specific type of
coverage.145 The court ultimately held that the insurance agent at issue had no liability to the
school because “it is well settled that the necessary coverages are best determined and calculated
by the insured, who is charged with the primary responsibility to read the policy,” and there was
no evidence to suggest that the agent “had any way of knowing [about] the school’s potential loss
of business income.”146

While some courts have questioned whether this holding overrules the Fifth Circuit’s
ruling in Offshore Production, other courts, including this Court, have found that the Louisiana
Supreme Court’s holding merely limits Offshore Production to a specific factual situations.147
These courts have determined that Offshore Production may still apply when an agent has reason

142 Id. at 231.
143 2009-2161 (La. 7/6/10), 42 So. 3d 352.
144 Id. at 353–56.
145 Id. at 357–58.
146 Id. at 358.
147 See Nola Ventures, LLC v. Upshaw Ins. Agency, Inc., No. 12-1026, 2014 WL 12721449, at *1 (E.D. La.
2014); Hernandez v. State Farm Gen. Ins. Co., No. 13-5783, 2014 WL 1457813, at *3 (E.D. La. 2014);
Lightfoot v. Hartford Fire Ins. Co., No. 07-4833, 2010 WL 11545223, at *4 (E.D. La. 2010).
to know that the client had a specific risk or requested coverage for specific circumstances.148
Even the Louisiana Supreme Court in Isidore Newman acknowledged that “[t]he courts have
noted that ‘the advice that an agent had an affirmative duty to give the insured’ involved ‘aspects

of the policies ... that were not within the knowledge generally held by a lay person,’ i.e., ‘the
agent's specific knowledge of the insured's individual situation triggered that duty to disclose.’”149
The Louisiana Supreme Court then noted that part of its finding that the agent had not failed to
exercise diligence was that “[t]he facts alleged do not suggest that [the agent] had any way of
knowing the school’s potential loss of business income.”150
Here, the Joachins allege facts suggesting Bowles’ knowledge of the Joachins’ situation.
In the amended third-party complaint, the Joachins allege that they told the Bowles
representatives that they did not currently reside at the property and planned to make repairs
before moving in. The Joachins do allege that they informed the Bowles representative that they
needed a policy that would cover the Property in its state at that time. The Fifth Circuit’s holding

in Offshore Production also suggests that because the Joachins requested a Policy to fit their stated
situation, as an experienced agent, Bowles was in a position to know that certain policies would
not provide coverage if the Joachins were not actually residing at the Property. Thus, the Joachins
plausibly pleaded that Bowles understood their situation and should have used reasonable
diligence to procure a policy that would provide the Joachins with coverage for their property
based on their expressed circumstances. Therefore, the Court will deny Bowles’ motion to dismiss

148 Nola Ventures, 2014 WL 12721449, at *1; Hernandez, 2014 WL 1457813, at *3; Lightfoot, 2010 WL
11545223, at *4.
149 Isidore Newman School, 42 So. 3d at 358 (quoting Parker v. Lexington, No. 06–4156, 2006 WL 3328041
(E.D. La. 2006)).
150 Id.
the failure to exercise reasonable diligence claim.
E. Whether the Joachins State a Claim for Negligence
Bowles argues that the Joachins fail to state a claim for negligence because they do not
plead any facts alleging that Bowles owed the Joachins a duty.151 Louisiana courts conduct a

“duty-risk analysis” to determine whether a defendant is liable for negligence.152 To prevail on a
negligence claim, a plaintiff must prove five elements: (1) the defendant had a duty to conform
his conduct to a specific standard of care; (2) the defendant’s conduct failed to conform to the
appropriate standard of care; (3) the defendant’s substandard conduct was a cause-in-fact of the
plaintiff’s injuries; (4) the defendant’s substandard conduct was a legal cause of the plaintiff’s
injuries; and (5) the defendant’s conduct caused actual damages.153
In the amended third party complaint, the Joachins allege that “Bowles & Associates was
then obligated to procure and provide a correct insurance policy to the Joachins, who were then
the obligees, said policy which would cover for unforeseen occurrences like a fire which could
destroy their insured property.”154 The Joachins also allege that “Bowles & Associates breached

its duty owed to the Joachins in failing to provide a proper policy of insurance based on the intent
of the Joachins, and its described breach of that care in this complaint was the cause of the Joachin’s
[sic] damages.”155

151 Rec. Doc. 47-1 at 5–6.
152 La. Civ. Code art. 2315; Lemann v. Essen Lane Daiquiris, Inc., 2005-1095 (La. 3/10/06), 923 So. 2d
627, 632–33 (citing Mathieu v. Imperial Toy Corporation, 94-0952 (La.11/30/94), 646 So.2d 318, 321); see
also Nagle v. Gusman, 61 F. Supp. 3d 609, 620 (E.D. La. 2014) (Vance, J.).
153 Lemann, 923 So. 2d at 633.
154 Rec. Doc. 35 at 5.
155 Id.
Bowles argues that it did not have a duty to provide the Joachins with a specific type of
insurance because Louisiana law places the burden on the client to ensure that he procures the
insurance he needs.156 As addressed above, the Louisiana Supreme Court’s holding in Isidore

Newman does place a burden on the insured to verify that the policy he procures meets his actual
needs, but the Louisiana Supreme Court also acknowledged that if an agent has knowledge of an
insured specific needs, then “‘the advice that an agent had an affirmative duty to give the insured’
involved ‘aspects of the policies ... that were not within the knowledge generally held by a lay
person,’ i.e., ‘the agent's specific knowledge of the insured's individual situation triggered that
duty to disclose.’”157 As analyzed supra, the Joachins allege enough facts to plead that Bowles
was aware of the Joachins’ specific situation and undertook an obligation to provide a policy that
met these needs. The Joachins also allege that Bowles failed to provide such a policy and this
failure was the cause of the Joachins’ damages. Therefore, the Joachins plausibly state a claim
for negligence and the Court will deny Bowles’ motion to dismiss the negligence claim.

V. Conclusion
Based on the foregoing, the Court has determined that the Joachins have not stated a
breach of contract claim or claims for bad faith under Sections 22:1892 and 22:1973 of the
Louisiana Revised Statutes. Thus, the Court will dismiss these claims. The Joachins, however,
have stated claims against Bowles for negligence, detrimental reliance, and failure to exercise
reasonable diligence. Therefore, the Court will not dismiss these claims.
Accordingly,

156 Id. at 3–4.
157 Isidore Newman School, 42 So. 3d at 358 (quoting Parker v. Lexington, No. 06–4156, 2006 WL 3328041
(E.D. La. 2006)).
IT IS HEREBY ORDERED that Third-Party Defendant Bowles & Associates, Inc’s.
“Rule 12(b)(6) Motion to Dismiss”!** is GRANTED IN PART AND DENIED IN PART. The
motion is granted to the extent that the breach of contract and bad faith claims are DISMISSED
WITH PREJUDICE. The motion is denied regarding Third-Party Plaintiffs’ remaining claims,
namely negligence, detrimental reliance, and failure to exercise reasonable diligence.
NEW ORLEANS, LOUISIANA, this 18th_ day of July, 2019.

CHIEF JUDGE
UNITED STATES DISTRICT COURT

58 Rec. Doc. 14.
27

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10184668. Public record. Not legal advice.