# Fontenot v. Great American Insurance Company

> District Court, E.D. Louisiana · September 18, 2023

URL: https://www.frixlaw.com/law-library/cases/10189907

## Case

- **Court:** District Court, E.D. Louisiana
- **Decided:** September 18, 2023
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/10189907

## How later opinions describe it (automated extraction)

- noting that the argument that plaintiff did not have right to enforce license agreement because of an assignment did not go to jurisdiction

## Opinion text

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA

SANDRA FONTENOT CIVIL ACTION
VERSUS No. 23-2062
GREAT AMERICAN SECTION I
ASSURANCE COMPANY

ORDER & REASONS
Before the Court is defendant Great American Assurance Company’s
(“defendant”) motion1 to dismiss pursuant to Federal Rules of Civil Procedure 12(b)(1)
and 12(b)(6). Plaintiff Sandra Fontenot (“plaintiff”) has not filed a response to the
motion, and the deadline for doing so has passed.2 For the reasons below, the Court
grants the unopposed motion to dismiss.
I. BACKGROUND
This matter concerns a Hurricane Ida insurance claim. Plaintiff owned the
property that is the subject of this dispute.3 The property, at the time of damage, was
subject to an insurance policy (“the Policy”) issued by defendant.4 Following damage
to the property, plaintiff claims that defendant breached the Policy and acted in bad
faith by failing to make required payments.5 The Policy was purchased by Celink, the

1 R. Doc. No. 11.
2 Pursuant to Local Rule 7.5, plaintiff’s deadline to respond to defendant’s motion was
August 15, 2023.
3 R. Doc. No. 1-1, ¶ 4.
4 R. Doc. No. 1-1, ¶ 5.
5 R. Doc. No. 1-1, ¶ 17.
servicer of plaintiff’s loan, and lists Celink as the named insured.6 Accordingly,
defendant denies that plaintiff is covered by the policy and moves to dismiss the claim
pursuant to Rules 12(b)(1) and 12(b)(6).7

II. STANDARD OF LAW
In its motion, defendant raises both Rule 12(b)(1) and Rule 12(b)(6) as grounds
for dismissal. Defendant argues that plaintiff lacks standing, pursuant to Rule
12(b)(1), because she is not insured under the Policy nor a beneficiary of the Policy.
In addressing claims brought under both Rule 12(b)(1) and Rule 12(b)(6), the Fifth
Circuit stated in Cotton v. Certain Underwriters at Lloyd's of London, 831 F.3d 592,

594 (5th Cir. 2016):
“Standing,” however, is a label used to describe different things in the
law. It can describe whether a party has a right to sue under a contract.
Novartis Seeds, Inc. v. Monsanto Co., 190 F.3d 868, 871 (8th Cir. 1999)
(R. Arnold, J.). That concept of standing, which as the Supreme Court
has explained is really an issue of “contract interpretation” that goes to
the merits of a claim, Perry v. Thomas, 482 U.S. 483, 492, 107 S.Ct. 2520,
96 L.Ed.2d 426 (1987), is “entirely distinct from ‘standing’ for purposes
of Article III.” Novartis Seeds, 190 F.3d at 871 (noting that the argument
that plaintiff did not have right to enforce license agreement because of
an assignment did not go to jurisdiction); see also Perry, 482 U.S. at 487,
492, 107 S.Ct. 2520 (explaining that a contention that plaintiffs “were
‘not parties’ to [an] ... agreement” did not raise an issue of jurisdictional
standing); Cornhusker Cas. Co. v. Skaj, 786 F.3d 842, 850–51 (10th Cir.
2015) (rejecting attempt to classify question whether nonparties to an

6 The Policy was not attached to plaintiff’s complaint. The Court may consider
documents outside the complaint when they are: “(1) attached to the motion; (2)
referenced in the complaint; and (3) central to the plaintiff's claims.” Maloney Gaming
Mgmt. v. St. Tammany Parish, 456 Fed.Appx. 336, 340 (5th Cir. 2011). Accordingly,
consideration of the Policy is appropriate because it is attached to Great American’s
Motion, referenced in plaintiff’s complaint, and central to plaintiff’s claim for relief.
R. Doc. No. 1-1, ¶ 5 (reference to the Policy in the complaint); R. Doc. No. 11-2 (the
Policy as an attachment to defendant’s motion).
7 R. Doc. No. 5, ¶ 1.
insurance agreement could invoke waiver and estoppel against
insurance company as question of jurisdictional standing).

“Considering Cotton, regardless of whether plaintiffs are additional or named
insureds or third-party beneficiaries . . . they have Article III standing to state claims
against the insurers . . . The issue of whether plaintiffs have “standing” in the sense
of a right to sue under the contract is better analyzed as whether they have stated a
claim under Rule 12(b)(6).” Brown v. Am. Mod. Home Ins. Co., 2017 WL 2290268, at
*3 (E.D. La. May 25, 2017) (Lemmon, J.). Therefore, because the defendant’s standing
argument is one of contract interpretation, the Court will treat this motion as one for
failure to state a claim pursuant to Rule 12(b)(6).
Rule 12(b)(6) of the Federal Rules of Civil Procedure allows for dismissal of a
complaint for “failure to state a claim upon which relief can be
granted.” Fed. R. Civ. P. 12(b)(6). “To survive a motion to dismiss, a complaint must

contain sufficient factual matter, accepted as true, to state a claim to relief that is
plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citation and internal
quotations omitted). A claim is facially plausible “when the plaintiff pleads factual
content that allows the court to draw the reasonable inference that the defendant is
liable for the misconduct alleged.” Id. “The plausibility standard is not akin to a
probability requirement, but it asks for more than a sheer possibility that a defendant
has acted unlawfully.” Culbertson v. Lykos, 790 F.3d 608, 616 (5th Cir. 2015) (citation

omitted) (internal quotation marks omitted).
“[T]he face of the complaint must contain enough factual matter to raise a
reasonable expectation that discovery will reveal evidence of each element of the
plaintiffs’ claim.” Hi-Tech Elec., Inc v. T&B Constr. & Elec. Servs., Inc., No. 15-3034,
2017 WL 615414, at *2 (E.D. La. Feb. 15, 2017) (Vance, J.) (emphasis added) (citing
Lormand v. US Unwired, Inc., 565 F.3d 228, 255–57 (5th Cir. 2009). A complaint is

insufficient if it contains “only labels and conclusions, or a formulaic recitation of the
elements of a cause of action.” Whitley v. Hanna, 726 F.3d 631, 638 (5th Cir. 2013)
(citation and internal quotations omitted). It “must provide the defendant with fair
notice of what the plaintiff's claim is and the grounds upon which it rests.” Dura
Pharms., Inc. v. Broudo, 544 U.S. 336, 346 (2005) (internal quotations omitted).
In considering a motion to dismiss, a court views the complaint “in the light

most favorable to the plaintiff, accepting as true all well-pleaded factual allegations
and drawing all reasonable inferences in the plaintiff's favor.” Lovick v. Ritemoney
Ltd., 378 F.3d 433, 437 (5th Cir. 2004).
III. ANALYSIS
Defendant moves to dismiss this claim pursuant to Rule 12(b)(6) because
plaintiff is not an insured, additional insured, or third-party beneficiary of the Policy.
Because the parties invoke the Court’s jurisdiction based on diversity of citizenship,

the Court applies the choice of law rules of the forum state, Louisiana. Klaxon Co. v.
Stentor Elec. Mfg. Co., 313 U.S. 487, 496 (1941).
Louisiana choice of law rules dictate that “an issue of conventional obligations
is governed by the law of the state whose policies would be most seriously impaired
if its law were not applied to that issue.” La. Civ. Code art. 3540. “[T]he law of the
state where the insurance contract was issued and executed generally governs the
interpretation of that contract.” Pioneer Expl., L.L.C. v. Steadfast Ins. Co., 767 F.3d
503, 512 (5th Cir. 2014). However, “[i]f the laws of the states do not conflict, then no
choice-of-law analysis is necessary, and we simply apply the law of the forum state.”

Mumblow v. Monroe Broad., Inc., 401 F.3d 616, 621 (5th Cir. 2005) (quoting
Schneider Nat'l Transp. v. Ford Motor Co., 280 F.3d 532, 536 (5th Cir.2002)) (internal
quotations omitted).
The insured property is located in Louisiana. The Policy was executed by
defendant in Ohio and issued to Celink in Michigan. Accordingly, Ohio, Michigan,
and Louisiana all potentially have an interest in the application of their own laws.

To determine if a choice of law analysis is necessary, the Court must first analyze
whether a conflict exists between the states’ laws.
Pursuant to Louisiana law, “[a]n insurance policy is a contract between the
parties and should be construed by using the general rules of interpretation of
contracts set forth in the Louisiana Civil Code.” Cadwallader v. Allstate Ins. Co., 848
So.2d 577, 580 (La. 2003). While the general standard for interpretation is the intent
of the parties, “[w]hen the words of a contract are clear and explicit and lead to no

absurd consequences, no further interpretation may be made in search of the parties’
intent.” In re Katrina Canal Breaches Litig., 495 F.3d 191, 207 (5th Cir. 2007)
(quoting La. Civ. Code art. 2046). Accordingly, “[i]f the policy wording at issue is clear
and unambiguously expresses the parties’ intent, the insurance contract must be
enforced as written.” Id. (quoting Cadwallader, 848 So.2d at 580).
Louisiana law permits enforcement of policies by intended third-party
beneficiaries in addition to enforcement by the named insured or additional named
insured. Williams v. Certain Underwriters At Lloyd's of London, 398 F. App'x 44, 47

(5th Cir. 2010). “Under Louisiana law, a third-party beneficiary must be created by
contract, known as a stipulation pour autri, and is never presumed. To establish a
stipulation pour autri, a party must demonstrate that: ‘(1) the stipulation for a third
party is manifestly clear; (2) there is certainty as to the benefit provided the third
party; and (3) the benefit is not a mere incident of the contract between the promisor
and the promisee.’” Johnson v. Am. Sec. Ins. Co., 2023 WL 143325, at *4 (E.D. La.

Jan. 10, 2023) (Vitter, J.) (quoting Joseph v. Hosp. Serv. Dist. No. 2 of Par. of St. Mary,
939 So. 2d 1206, 1212 (La. 2006)).
Michigan law does not conflict with Louisiana law. Pursuant to Michigan law,
“a court should “give contractual language that is clear and unambiguous full effect
according to its plain meaning unless it violates the law or is in contravention of
public policy.” Stryker Corp. v. XL Ins. Am., 735 F.3d 349, 354 (6th Cir. 2012). Like
Louisiana law, Michigan law dictates that third parties have the right to enforce

policies only when the promisor has “undertaken the promise directly to or for that
person.” Schmalfeldt v. N. Pointe Ins. Co., 469 Mich. 422, 428 (2003). The parties to
the contract must be “clearly aware that the scope of their contractual undertakings
encompasses a third party.” Id. A court “should look no further than the form and
meaning of the contract itself to determine whether a party is an intended third-party
beneficiary.” Id. Accordingly, Michigan law, like Louisiana law, requires the court to
give meaning to the plain language of the contract and only infer a right to enforce a
contract by a third-party where the intent to benefit the third-party is direct, not
incidental.

Similarly, Ohio law requires the court to begin with the plain language of the
contract. “If a contract is clear and unambiguous, then its interpretation is a matter
of law and there is no issue of fact to be determined.” Inland Refuse Transfer Co. v.
Browning-Ferris Indus. of Ohio, Inc., 15 Ohio St. 3d 321, 323 (1984). Ohio law
“requires that for a third party to be an intended beneficiary under a contract, there
must be evidence that the contract was intended to directly benefit that third party.”

Cook v. Ohio Nat'l Life Ins. Co., 961 F.3d 850, 856 (6th Cir. 2020). “Third parties that
are only incidental beneficiaries are generally not permitted to assert claims under
contracts to which they are not parties.” Id.
The laws of all three states require a court to begin with the plain language of
the contract. If an unnamed beneficiary of a policy seeks to enforce the policy, the
court must determine if the benefit conferred was direct or incidental. Only direct
beneficiaries of the policy may enforce the policy. Accordingly, the laws of the states

do not conflict, and no choice of law analysis is necessary. The Court will, therefore,
apply the law of the forum state, Louisiana. See Mumblow v. Monroe Broad., Inc., 401
F.3d 616, 621 (5th Cir. 2005).
The language of the Policy issued by defendant is clear. The Policy states that
“[t]he mortgagor or tenant is not an insured or additional insured under the policy.”8

8 R. Doc. No. 11-2, at 34.
Pursuant to the plain language of the Policy and the Louisiana standard of
interpretation, plaintiff is neither an insured nor an additional insured. See
Cadwallader v. Allstate Ins. Co., 848 So.2d 577, 580 (La. 2003).

Additionally, plaintiff is not an intended third-party beneficiary pursuant to
Louisiana law. The Policy was initiated by Celink, the mortgagee, to protect its own
interest in the property. There was no intent to confer a direct benefit upon plaintiff.
Any benefit conferred on plaintiff was merely incidental to the mortgagee’s coverage.
See Riley v. Sw. Bus. Corp., c, at *3 (E.D. La. Sept. 17, 2008) (Vitter, J.) (“Indeed, the
very purpose of a forced placed policy is to cover the uninsured portion of the

mortgagee’s interest. Though [the mortgagor] may incidentally benefit from the
stopgap coverage, he was not an intended beneficiary and is thus not entitled to
enforce the contract in court.”); Gisclair v. Great American Assurance Company, 2023
WL 1765922, at *6 (E.D. La., Feb. 3, 2023) (Morgan, J.); Johnson, 2023 WL 143325,
at *4. Because plaintiff does not assert a plausible claim for relief under the Policy,
plaintiff’s breach of contract claim must be dismissed pursuant to Rule 12(b)(6).
Plaintiff additionally claims that defendant is liable for violating statutory

duties pursuant to La. R.S. §§ 22:1973 and 22:1892. These claims rely on the existence
of a valid, underlying insurance claim. Gisclair, 2023 WL 1765922, at *7; Riley, WL
4286631, at *3. Because plaintiff is not entitled to coverage under the Policy, these
claims also lack a plausible basis.
IV. CONCLUSION
For the reasons stated herein,
IT IS ORDERED that defendant’s motion to dismiss is GRANTED pursuant
to Rule 12(b)(6) and this case is DISMISSED WITH PREJUDICE.
New Orleans, Louisiana, September 18, 2023.

LANCE M. fr
UNITED STATES DJSTRICT JUDGE

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10189907. Public record. Not legal advice.