Opinion
CIVIL ACTION 16-537-SDD-RLB
08-21-2018
TAYLOR CARROLL v. SGS NORTH AMERICA INC.
RULING
This matter is before the Court on the Motions to Dismiss filed by Third-Party Defendants Cindy Carroll ("C. Carroll")and E.T. International, L.L.C. D/B/A Acura of Baton Rouge ("Acura"). Third-Party Plaintiff, SGS North America ("SGS") has filed Oppositions to both motions, to which each Third-Party Defendant has filed their respective Reply. For the reasons which follow the Third-Party Defendants motions will be granted. I. FACTUAL AND PROCEDURAL BACKGROUND
Rec. Doc. 52.
Rec. Doc. 60.
Rec. Docs. 59 and 64.
Rec. Doc. 67 and 69.
For a full factual discussion of the case see the Court's Ruling at Rec. Doc. 40.
Plaintiff in the underlying lawsuit, Taylor Carroll, alleges that SGS violated the Telephone Consumer Protection Act ("TCPA" 47 U.S.C. § 227") when it called his cellphone on several occasions regarding an end of lease inspection of his wife's Acura vehicle. SGS has now filed a Third-Party Complaint against C. Carroll and Acura alleging that both parties committed fraud, intentional misrepresentation, civil conspiracy, and negligent misrepresentation when C. Carroll placed Taylor Carroll's cellphone number as their home phone number on the lease form. SGS also asserts a negligence claim against Acura for failing to use the most updated forms. It is SGS's contention that C. Carroll and Acura's actions resulted in the SGS's alleged TCPA violation and SGS is therefore entitled to indemnification from C. Carroll and Acura for any alleged TCPA violations. C. Carroll and Acura have separately moved to dismiss SGS's Third-Party Complaint pursuant to Rule 12(b)(6).
Rec. Doc. 48, p. 19-20, ¶¶ 91-99.
Id. at p. 21, ¶¶ 100-103.
Id. at pp. 20-21¶¶ 95, 99, 103.
II. LAW AND ANALYSIS
A. Motion to Dismiss Under Rule 12(b)(6)
Both C. Carroll and Acura as the Court to convert their respective motions to dismiss to a motion for summary judgment. The Court's Ruling is based solely on the pleadings and its proper attachments. Accordingly, the Court will not convert the motion to dismiss to a motion for summary judgment pursuant to Federal Rule of Civil Procedure 12(d).
When deciding a Rule 12(b)(6) motion to dismiss, "[t]he 'court accepts all well-pleaded facts as true, viewing them in the light most favorable to the plaintiff.'" The Court may consider "the complaint, its proper attachments, documents incorporated into the complaint by reference, and matters of which a court may take judicial notice." "To survive a Rule 12(b)(6) motion to dismiss, the plaintiff must plead 'enough facts to state a claim to relief that is plausible on its face.'" In Twombly, the United States Supreme Court set forth the basic criteria necessary for a complaint to survive a Rule 12(b)(6) motion to dismiss. "While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." A complaint is also insufficient if it merely "tenders 'naked assertion[s]' devoid of 'further factual enhancement.'" However, "[a] claim has facial plausibility when the plaintiff pleads the factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." In order to satisfy the plausibility standard, the plaintiff must show "more than a sheer possibility that the defendant has acted unlawfully." "Furthermore, while the court must accept well-pleaded facts as true, it will not 'strain to find inferences favorable to the plaintiff.'" On a motion to dismiss, courts "are not bound to accept as true a legal conclusion couched as a factual allegation."
In re Katrina Canal Breaches Litigation, 495 F.3d 191, 205 (5th Cir. 2007)(quoting Martin K. Eby Constr. Co. v. Dallas Area Rapid Transit, 369 F.3d 464, 467 (5th Cir. 2004)).
Randall D. Wolcott, M.D., P.A. v. Sebelius, 635 F.3d 757, 763 (5th Cir. 2011) (quoting Dorsey v. Portfolio Equities, Inc., 540 F.3d 333, 338 (5th Cir. 2008)).
In re Katrina Canal Breaches Litigation, 495 F.3d at 205 (quoting Martin K. Eby Constr. Co. v. Dallas Area Rapid Transit, 369 F.3d at 467).
Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal citations and brackets omitted) (hereinafter Twombly).
Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (internal citations omitted) (hereinafter "Iqbal").
Twombly, 550 U.S. at 570.
Iqbal, 556 U.S. at 678.
Taha v. William Marsh Rice University, 2012 WL 1576099 at *2 (quoting Southland Sec. Corp. v. Inspire Ins. Solutions, Inc., 365 F.3d 353, 361 (5th Cir. 2004).
Twombly, 550 U.S. at 556 (quoting Papasan v. Allain, 478 U.S. 265, 286, 106 S.Ct. 2932, 92 L.Ed.2d 209 (1986)).
B. SGS'S Claims for Fraud, Intentional Misrepresentation, and Civil Conspiracy
The Court has carefully reviewed SGS's Third Party Complaint but is unable to discern under what statute SGS is seeking relief and what specific laws C. Carroll and Acura are alleged to have breached. As our sister court in the Southern District of Texas noted: "Dismissal under Rule 12(b)(6) is proper not only where the plaintiff fails to plead sufficient facts to support a cognizable legal theory, but also where the plaintiff fails to allege a cognizable legal theory." Given the plethora of federal and state statutes which may serve as a basis for SGS's claims for fraud, intentional misrepresentation, and civil conspiracy the Court finds that SGS has failed to specify the cognizable legal theories under which it seeks relief, hence dismissal is appropriate.
Rec. Doc. 48.
Rec. Doc. 48, pp. 19-20, ¶¶ 91-95.
Residents Against Flooding v. Reinvestment Zone Number Seventeen, City of Houston, Texas, 260 F.Supp.3d 738, 756 (S.D. Tex. May 9, 2017)(citing Kjelvander v. Citicorp, 156 F.R.D. 138, 140 (S.D. Tex. 1994)(citing Garret v. Commonwealth Mortgage Corp., 938 F.2d 591, 594 (5th Cir. 1991))).
Additionally, regarding SGS's alleged claim for Fraud, under Rule 9(b), a heightened pleading requirement exists for fraud claims, such that a party alleging fraud or mistake "must state with particularity the circumstances constituting fraud or mistake." Only "[m]alice, intent, knowledge, and other conditions of a person's mind may be alleged generally." Thus, a claim of fraud cannot be based on mere "speculation and conclusory allegations," and the Fifth Circuit strictly interprets the requirements for pleading fraud. The Eastern District in Becnel v. St. Charles Parrish Sheriff's Office held, "it is axiomatic that a complaint cannot be amended by briefs in opposition to a motion to dismiss." Here, SGS, may not amend its claims for fraud, intentional misrepresentation, and civil conspiracy against both C. Carroll and Acura in its' Oppositions to the respective motions. Given that SGS has asserted a claim for fraud, but has failed to specify with particularity the specific fraud statute which they argue entitles them to relief, the Court must grant the 12(b)(6) motion on this issue.
U.S. ex rel. Willard v. Humana Health Plan of Tex., 336 F.3d 375, 385 (5th Cir. 2003).
Flaherty & Crumrine Preferred Income Fund, Inc. v. TXU Corp., 565 F.3d 200, 207 (5th Cir. 2009), cert. denied, 558 U.S. 873, 130 S.Ct. 199, 175 L.Ed.2d 125 (2009).
Becnel v. St. Charles Par. Sheriff's Office, No. 15-1011, 2015 WL 5665060, at *1 (E.D. La. Sept. 24, 2015) (quoting In re Enron Corp. Sec., Derivative & ERISA Litig., 761 F. Supp. 2d 504, 566 (S.D. Tex. 2011) (collecting cases)).
Accordingly, C. Carroll and Acura's 12(b)(6) Motion to Dismiss SGS's claims for fraud, intentional misrepresentation, and civil conspiracy is granted.
C. SGS's Claims Indemnity Under Louisiana Law for Negligence and Negligent Misrepresentation
SGS asserts a claim for negligent misrepresentation against C. Carroll and Acura. SGS pleads that "it is entitled to indemnification, by way of an award of compensatory damages sufficient to remedy all losses caused by the negligent misrepresentations of [C. Carroll and Acura]." SGS also asserts that "Acura of Baton Rouge acted unreasonably and negligently in failing to utilize the most recent forms provided to it by AHFC." SGS claims that it is "entitled to indemnification, by way of an award of compensatory damages sufficient to remedy all losses caused by the negligence of Acura of Baton Rouge."
Rec. Doc. 48, p. 20, ¶¶ 96-99.
Id. at p. 20, ¶ 99.
Id. at p. 21, ¶ 101.
Id. at ¶ 103.
In its' Opposition to Acura's Motion to Dismiss, SGS concedes it lacks a viable indemnity claim. However, SGS attempts to save its third party claims for negligence and negligent misrepresentation by arguing that they are not indemnity claims, but are independent state law claims. The argument is unintelligible. No matter the label of the Third Party claim, SGS seeks judgment over and against the Third Party Defendants, C. Carroll and Acura. As stated in the Court's previous ruling, "[t]he Court's research did not yield any relevant jurisprudence from the Fifth Circuit Court of Appeals regarding TCPA liability. Accordingly, the Court will consult jurisprudence from other Courts of Appeal."
Rec. Doc. 60-1.
Rec. Doc. 64, p. 2, n. 3.
Rec. Doc. 40, p. 4, n. 26.
In Kim v. Cellco Partnership, a district court case from the Northern District of Indiana, the Court held that Verizon, the defendant alleged to have violated the TCPA, could not assert a state law negligence claim against the third party plaintiff. The Kim court relied on the Seventh Circuit Court of Appeal's decision in in Donovan v. Robbins, wherein the Seventh Circuit held "where contribution is sought by one who has to pay damages for violating a federal statue, the scope and limitations of the right of contribution are invariably treated as questions of federal rather than state law." After consulting the TCPA, the Kim court concluded "the TCPA does not create an affirmative cause of action for contribution or indemnification; federal common law does not recognize such a cause of action, and Verizon has not claimed that it had an agreement with [the third party defendant] specifically regarding the sharing of liability."
14cv00312, 2016 WL 871256 at *2 (N.D. Ind. Jan. 29, 2016).
752 F.2d 1170, 1179 (7th Cir. 1985).
Id.
Kim, 2016 WL 871256 at *2.
Here, SGS, a Third-Party Plaintiff, claims that it is entitled to compensatory damages because of alleged violations of the TCPA. The TCPA is a federal statute and any indemnity or contribution claim arising from a violation of federal law is defined by federal, not state law. Given that the TCPA itself does not explicitly or implicitly create a claim for contribution or indemnification, and that common law does not recognize SGS's claim for indemnification, SGS is not entitled as a matter of law to claim compensatory damages from C. Carroll and Acura. SGS also fails to allege that either C. Carroll or SGS had a specific agreement regarding the sharing of liability. Accordingly, C. Carroll and Acura's motion to dismiss SGS's claims for negligence and negligent misrepresentation under Louisiana law is granted.
SGS relies on the Eleventh Circuit's decision in Osorio v. State Farm Bank, F.S.B., 746 F.3d 1242, 1258-60 (11th Cir. 2014) for its contention that it may assert state law claims of negligence and negligent misrepresentation against C. Carroll and Acura. Contrary to SGS's assertions, the Eleventh Circuit did not examine the question of whether a defendant in a TCPA action may assert a Third-Party indemnity complaint against the parties who provided the improper phone number. The Third-Party Defendant in Osorio did not assert that the TCPA as a matter of law prevented a claim for indemnity, nor is there any language in the Osorio decision to suggest that State Farm asserted an indemnity claim. Accordingly, the Court finds the Eleventh Circuit's decision in Osorio distinguishable from the present case.
III. CONCLUSION
For the above stated reasons, C. Carroll and Acura's Motions to Dismiss are hereby GRANTED.
Rec. Docs. 52 and 60. --------
IT IS SO ORDERED.
Signed in Baton Rouge, Louisiana on August 21, 2018.
/s/ _________
JUDGE SHELLY D. DICK
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA