The opinion
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF LOUISIANA
LAFAYETTE DIVISION
HELEN WILLIAMS CASE NO. 6:22-CV-03927
VERSUS JUDGE JAMES D. CAIN, JR.
INTEGON NATIONAL INSURANCE CO MAGISTRATE JUDGE KAY
MEMORANDUM RULING
Before the court is a Motion to Dismiss [doc. 37] filed by defendant Integon
National Insurance Company under Federal Rule of Civil Procedure 12(b)(6).
Plaintiffs oppose the motion. Doc. 41.
I.
BACKGROUND
This suit arises from alleged Hurricane Laura and Hurricane Delta damage to a
home owned by plaintiff Blackrock International, Inc. at 305 Kensington Drive in
Lafayette, Louisiana, and subject to a mortgage issued by BSI Financial Services. Doc. 28.
The storms made landfall in Southwest Louisiana on August 27 and October 9, 2020,
respectively. At all relevant times the residence was subject to a lender-placed insurance
policy issued by Integon National Insurance Company, with BSI Financial Services named
as the insured. Doc. 28. Plaintiff Blackrock is not named anywhere in the policy but is
described as the borrower in the Notice of Lender-Placed Hazard Insurance.1 Doc. 19, atts.
2 & 3. The policy states:
In consideration of the payment of the premium, and subject to all provisions
of the policy forms and endorsements attached to this LENDER’S
GENERAL FORM, WE agree to indemnify YOU or YOUR legal
representatives for any amount that YOU may be entitled to recover as the
result of a covered LOSS.
Doc. 19, att. 3, p. 4. “YOU” is defined as the named insured on the declarations page. Id.
The policy further provides:
WE will adjust each LOSS with YOU and will pay YOU. If the amount of
LOSS exceeds YOUR insurable interest, WE will pay the BORROWER any
residual amount due for the LOSS, not exceeding the Limit of Liability
indicated on the NOTICE OF INSURANCE. Payment for LOSS will be
made within (30) days after receipt of satisfactory proof of LOSS from YOU.
Id. at 59. The Notice of Insurance sets the Limit of Liability at $312,000.00. Doc. 37, att.
2, p. 4.
Helen Williams originally filed suit in this court on August 24, 2022. She raised
claims based on the damage to 305 Kensington Drive and Integon’s alleged failure to
timely and adequately compensate her for covered losses. Doc. 1. At that time she was
represented by attorneys from the firm of McClenny Moseley & Associates, PLLC
(“MMA”), who were subsequently suspended from practice in this district due to their
mishandling of hurricane cases. This case was stayed along with others filed by MMA due
to irregularities in those cases, including duplicate suits, suits filed against the wrong
1 Both the policy and notice of insurance are referenced in and central to plaintiffs’ first and second amended
complaints, and are therefore within the scope of review on this 12(b)(6) motion.
insurer, suits filed on behalf of parties with no knowledge of the filing, and suits filed on
behalf of parties who had already settled their claims.
New counsel enrolled for plaintiff on July 17, 2023, and the stay was lifted. Docs.
15, 17. Integon moved to dismiss the suit, asserting that Ms. Williams’s claims all failed
because she was not a named insured, additional insured, or third-party beneficiary under
the contract. Doc. 19. Ms. Williams was granted leave to amend her complaint, through
which she named Blackrock as plaintiff. Integon then filed a second motion to dismiss,
renewing its objections based on plaintiff’s status under the policy and arguing that
plaintiff’s claims are time-barred because they do not relate back to the original complaint.
Doc. 24. The court found that the claims related back to the original complaint and that
Blackrock may have status through a stipulation pour autrui based on the policy’s excess
payments clause. Doc. 34. Plaintiffs were thus granted a second leave to amend with the
court providing that “[a]ny amendment should include the unpaid balance of the mortgage
and a good-faith allegation that contractual damages exceed that amount in order to state a
claim for relief.” Id.
Plaintiffs filed their second amended complaint, in which they acknowledge that the
unpaid balance of the mortgage is $346,940.83. Doc. 35, ¶ 12. They further allege that the
residence “currently requires a total of $205,238.00 in needed repairs” and that Integon is
liable for $102,619.00 in statutory damages under La. Rev. Stat. 22:1892; attorney fees of
at least 25 percent, or $76,964.25; costs of $6,577.14; and consequential damages of
$75,000.00 under La. Rev. Stat. 22:1973. Id. at ¶¶ 13–17. Accordingly, they maintain that
the damages greatly exceed the unpaid balance of the mortgage and create a stipulation
pour autrui in favor of Blackrock. Integon again moves for dismissal, noting that the
contractual damages do not exceed the unpaid balance. Doc. 37. Plaintiffs oppose the
motion. Doc. 41.
II.
LAW & APPLICATION
A. Legal Standard
Rule 12(b)(6) allows for dismissal when a plaintiff “fail[s] to state a claim upon
which relief can be granted.” When reviewing such a motion, the court should focus on the
complaint and its attachments. Wilson v. Birnberg, 667 F.3d 591, 595 (5th Cir. 2012). The
court can also consider documents referenced in and central to a party’s claims, as well as
matters of which it may take judicial notice. Collins v. Morgan Stanley Dean Witter, 224
F.3d 496, 498–99 (5th Cir. 2000); Hall v. Hodgkins, 305 Fed. App’x 224, 227 (5th Cir.
2008) (unpublished).
Motions under Rule 12(b)(6) are reviewed with the court “accepting all well-
pleaded facts as true and viewing those facts in the light most favorable to the plaintiff.”
Bustos v. Martini Club, Inc., 599 F.3d 458, 461 (5th Cir. 2010). However, “the plaintiff
must plead enough facts ‘to state a claim to relief that is plausible on its face.’” In re
Katrina Canal Breaches Litig., 495 F.3d 191, 205 (5th Cir. 2007) (quoting Bell Atl. Corp.
v. Twombly, 550 U.S. 544, 570 (2007)). Accordingly, the court’s task is not to evaluate the
plaintiff’s likelihood of success but instead to determine whether the claim is both legally
cognizable and plausible. Lone Star Fund V (U.S.), L.P. v. Barclays Bank PLC, 594 F.3d
383, 387 (5th Cir. 2010).
B. Application
To state a claim for relief based on an insurance policy, a plaintiff must be a named
insured, an additional named insured, or an intended third-party beneficiary. Brown v. Am.
Modern Home Ins. Co., 2017 WL 2290268, at *4 (E.D. La. May 25, 2017) (internal
citations omitted). Here the relevant inquiry is whether plaintiff is a third-party beneficiary.
Under Louisiana law, third party beneficiary status is conferred by contract under what is
known as a stipulation pour autrui. Williams v. Certain Underwriters at Lloyd’s of London,
398 F. App’x 44, 47 (5th Cir. 2010) (unpublished). This status is never presumed, and the
party claiming the benefit bears the burden. Joseph v. Hosp. Svc. Dist. No. 2 St. Mary Par.,
939 So.2d 1206, 1212 (La. 2006). A plaintiff must show that (1) the contract manifests a
clear intention to benefit the third party; (2) there is certainty as to the benefit provided;
and (3) the benefit is not merely an incident of the contract. Brown, 2017 WL 2290268 at
*4 (citing Joseph, 939 So.2d at 1212–13).
Lender-placed policies are designed to insure the lender’s collateral whenever the
borrower fails to maintain adequate insurance coverage. Williams, 398 F. App’x at 46.
Though the borrowers are typically listed on the policy and pay premiums through the
lender, such circumstances are insufficient to create third-party beneficiary status unless
the borrower is also due some sort of benefit under the policy. Id. A stipulation pour autrui
may arise, however, where a clause directs that any loss payment exceeding the
mortgagee’s interest must be paid to the borrower. Lee v. Safeco Ins. Co. of Am., 2008 WL
2622997 (E.D. La. Jul. 2, 2008); accord Tardo v. Integon Nat’l Ins. Co., 2023 WL
2757088, at *3–*4 (E.D. La. Apr. 3, 2023); Dehart v. Integon Nat’l Ins. Co., 2023 WL
4846839, at *3 (E.D. La. July 28, 2023); Alvarado v. Lexington Ins. Co., 389 S.W.3d 544,
554 (Tex. App. 2012). A plaintiff can only show third-party beneficiary status for the
purpose of surviving a motion to dismiss if the allegations in the complaint demonstrate
that the losses exceed the insured’s interest (e.g., the unpaid principal balance of the
mortgage). Dehart, 2023 WL 4846839, at *3; Brown v. Am. Modern Home Ins. Co., 2017
WL 2290268 (E.D. La. May 25, 2017).
Plaintiffs maintain that they have shown a stipulation pour autrui because the total
damages in this matter exceed the balance on the mortgage. The excess payments clause
provides: “If the amount of LOSS exceeds YOUR insurable interest, WE will pay the
BORROWER any residual amount due for the LOSS, not exceeding the Limit of Liability
indicated on the NOTICE OF INSURANCE.” Doc. 37, att. 3, p. 59. Accordingly, the
borrower’s interest is not triggered until the contractual damages exceed the insurable
interest. Otherwise the borrower has no standing to bring suit under the policy and thus no
entitlement to statutory damages or attorney fees. Notwithstanding plaintiffs’ admission
that their outstanding contractual losses total only $205,238.00, the limit of liability
($312,000.00) is less than the unpaid balance of the mortgage ($346,940.83). On the face
of the second amended complaint, there is no possibility of Blackrock recovering as a third-
party beneficiary. Plaintiffs therefore fail to state a claim on which relief can be granted.
II.
CONCLUSION
For the reasons stated above, the Motion to Dismiss [doc. 37] will be GRANTED
and all claims in this matter will be DISMISSED WITH PREJUDICE.
THUS DONE AND SIGNED in Chambers on the 4th day of January, 2024.
□ Po. .
> JAMES D. CAIN, JR. A
UNITED STATES DISTRICT JUDGE
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