Chauvin v. State Farm Fire and Cas. Co.

• Decision Date: 02 August 2006
• Docket Number: Civil Action No. 05-6454.
• Citation: 450 F.Supp.2d 660
• Parties: CHAUVIN, et al. v. STATE FARM FIRE AND CASUALTY COMPANY, et al. This Document applies to the following civil actions in the Eastern District of Louisiana Nos. 05-6454, 05-6455, 05-6456, 05-6457, 05-6458, 05-6887, 05-6888, 06-0078, 06-0177, 06-0252, 06-0340, 06-0518, 06-0558, 06-0559, 06-0560, 06-0561, 06-0596, 06-0830, 06-0831, 06-0885, 06-1053, 06-1064, 06-1081, 06-1090, 06-1091, 06-1092, 06-1148, 06-1242, 06-1243, 06-1271, 06-1571, 06-1585, 06-1597, 06-1734, 06-2919, and 06-2982.
• Court: U.S. District Court — Eastern District of Louisiana

Page 660

450 F.Supp.2d 660

CHAUVIN, et al. v. STATE FARM FIRE AND CASUALTY COMPANY, et al. This Document applies to the following civil actions in the Eastern District of Louisiana Nos. 05-6454, 05-6455, 05-6456, 05-6457, 05-6458, 05-6887, 05-6888, 06-0078, 06-0177, 06-0252, 06-0340, 06-0518, 06-0558, 06-0559, 06-0560, 06-0561, 06-0596, 06-0830, 06-0831, 06-0885, 06-1053, 06-1064, 06-1081, 06-1090, 06-1091, 06-1092, 06-1148, 06-1242, 06-1243, 06-1271, 06-1571, 06-1585, 06-1597, 06-1734, 06-2919, and 06-2982.

Civil Action No. 05-6454.

United States District Court, E.D. Louisiana.

August 2, 2006.

Terrence Jude Lestelle, Andrea S. Lestelle, Jeffery Bryan Struckhoff, Lestelle & Lestelle, William Peter Connick, Connick & Connick, LLC, Metairie, LA, Allan Berger, Allan Berger & Associates, PLC, Bruce L. Feingerts, Feingerts & Kelly, PLC, Patrick G. Kehoe, Jr., Patrick G. Kehoe, Jr., APLC, Randy Jay Ungar, Ungar & Byrne, New Orleans, LA, David Allen Parsiola, Philip Francis Cossich, Jr., Cossich, Sumich & Parsiola, LLC, Belle Chasse, LA, John Van Robichaux, Jr., Robichaux Law Firm, Covington, LA, for Plaintiffs.

Wayne J. Lee, Andrea L. Fannin, Heather Shauri Lonian, Mary L. Dumestre, Stone Pigman Walther Wittmann, LLC, New Orleans, LA, for Defendants.

ORDER AND REASONS

VANCE, District Judge.

All defendants in the above-captioned actions have moved for dismissal of plaintiffs' claims pursuant to Rule 12 of the Federal Rules of Civil Procedure. For the following reasons, the Court GRANTS defendants' motions.

I. BACKGROUND

Plaintiffs are Louisiana homeowners who allege that Hurricanes Katrina and/or Rita rendered their homes total losses. Some plaintiffs are individual homeowners seeking relief on their own behalf. Some plaintiffs seek to represent a class of similarly-situated homeowners. All plaintiffs ask for relief from their homeowner's insurers under Louisiana's Valued Policy Law, La.Rev.Stat. § 22:695.¹ Many of these actions were transferred to this Court in order to resolve the question of whether the VPL applies under the facts alleged by plaintiffs. Plaintiffs allege that their homeowner's insurers improperly denied them coverage for their losses because the insurers refused to reimburse them for the full value of their homes as stated on their homeowner's policies. Plaintiffs' homeowner's policies cover damage caused by wind and rain, but all contain a clause excluding coverage for damage caused by flood.²

Defendants assert that these exclusions prevent plaintiffs from recovering for total losses when flooding was the proximate cause of the total losses. Plaintiffs contend that the VPL entitles them to the full value of their policies, regardless of the proximate cause of their losses, so long as a covered peril caused some loss to their property. Defendants dispute plaintiffs' interpretation of the VPL and argue that the VPL cannot be the basis for their relief because: 1) the VPL applies only to damage caused by fire; 2) even if the VPL extends to perils other than fire, it does not allow full recovery when the covered peril caused only a partial loss of the covered property; 3) plaintiffs' interpretation of the VPL would violate Louisiana's filed rate doctrine; 4) plaintiffs' interpretation of the VPL would violate both the Louisiana and United States constitutions; and 5) plaintiffs' VPL claims are necessarily preempted by federal law under the National Flood Insurance Act of 1968, 42 U.S.C. §§ 4001-4129.

Defendants initially filed individual motions to dismiss these actions, and the Court ordered plaintiffs to file a consolidated response. Defendants filed a consolidated reply brief, and following oral argument the parties submitted additional briefs on the construction of defendants' policies at the instruction of the Court. After considering the parties' submissions, the arguments presented orally to the Court, and relevant Louisiana law, the Court finds that the VPL does not authorize recovery based on the theory plaintiffs allege.

II. LEGAL STANDARD

A. Motions to Dismiss Under Rule 12

Defendants move for dismissal under both Rule 12(b)(6) and Rule 12(c) of the Federal Rules of Civil Procedure. A motion for judgment on the pleadings under Rule 12(c) is subject to the same standard as a Rule 12(b)(6) motion to dismiss. See Thomason v. Nachtrieb, 888 F.2d 1202, 1204 (7th Cir.1989) ("[A] motion for judgment on the pleadings is subject to the same standard as a motion for dismissal for failure to state a claim."); Davis v. City of Baldwyn, 2000 WL 994469, at *2 (N.D.Miss.2000). In a motion to dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6), the Court must accept all well-pleaded facts as true and view the facts in the light most favorable to plaintiffs. See Baker v. Putnal, 75 F.3d 190, 196 (5th Cir.1996); American Waste & Pollution Control Co. v. Browning-Ferris, Inc., 949 F.2d 1384, 1386 (5th Cir.1991). The Court will generally not look beyond the face of the pleadings to determine whether dismissal is warranted under Rule 12. Fed.R.Civ.P. 12(b); Fed. R.Civ.P. 12(c); Spivey v. Robertson, 197 F.3d 772, 774 (5th Cir.1999) (consideration of documents outside the pleadings requires converting the motion to one for summary judgment). However, uncontested documents referred to in the pleadings may be considered by the Court without converting the motion to one for summary judgment, even when these documents are not physically attached to the complaint. See Great Plains Trust Co. v. Morgan Stanley Dean Witter & Co., 313 F.3d 305, 313 (5th Cir.2002). The Court must resolve doubts as to the sufficiency of the claim in plaintiffs' favor. Vulcan Materials Company v. City of Tehuacana, 238 F.3d 382, 387 (5th Cir.2001). Dismissal is warranted if it appears certain that plaintiffs cannot prove any set of facts in support of their claim that would entitle them to relief. Gen. Elec. Capital Corp. v. Posey, 415 F.3d 391, 395 (5th Cir.2005).

B. Interpreting Louisiana Law

When a federal court interprets a Louisiana statute, it must do so according to the principles of interpretation followed by Louisiana courts. Gen. Elec. Capital Corp. v. Se. Health Care, Inc., 950 F.2d 944, 950 (5th Cir.1991). In Louisiana, the sources of law are legislation and custom. Shaw Constructors v. ICF Kaiser Eng'rs, Inc., 395 F.3d 533, 546 (5th Cir. 2004). These authoritative or primary sources of law are to be "contrasted with persuasive or secondary sources of law, such as [Louisiana and other civil law] jurisprudence, doctrine, conventional usages, and equity, that may guide the court in reaching a decision in the absence of legislation and custom." Id. (quoting La. Civ. Code art. 1). In Louisiana, "courts must begin every legal analysis by examining primary sources of law: the State's Constitution, codes, and statutes." Id. (quoting Prytania Park Hotel Ltd. v. General Star Indem. Co., 179 F.3d 169, 174 (5th Cir. 1999)). To make an "Erie guess" on an issue of Louisiana law, the Court must "employ the appropriate Louisiana methodology" to decide the issue the way that it believes the Supreme Court of Louisiana would decide it. Id. (quoting Lake Charles Diesel Inc. v. Gen. Motors Corp., 328 F.3d 192, 197 (5th Cir.2003)).

III. DISCUSSION

A. The Valued Policy Law

Louisiana's Valued Policy Law was originally enacted in 1900, "in order to secure greater certainty in the contract of insurance." See New Orleans Real Estate Mortgage & Sec. Co. v. Teutonia Ins. Co. of New Orleans, et al, 128 La. 45, 54 So. 466, 473 (1910). The statute persisted, with minor adjustments in its language, until 1988 when it was repealed. It was reenacted in 1991 with some changes to its language. The current version states, in relevant part:

A. Under any fire insurance policy insuring inanimate, immovable property in this state, if the insurer places a valuation upon the covered property and uses such valuation for purposes of determining the premium charge to be made under the policy, in the case of total loss the insurer shall compute and indemnify or compensate any covered loss of or damage to, such property which occurs during the term of the policy at such valuation without deduction or offset, unless a different method is to be used in the computation of loss, in which latter case, the policy, and any application therefor, shall set forth in type of equal size, the actual method of such loss computation by the insurer....

B. Any clause, condition, or provision of a policy of fire insurance contrary to the provisions of this Section shall be null and void, and have no legal effect .

La.Rev.Stat. § 22:695 (emphasis added). Louisiana's Valued Policy Law is contained within Chapter 1, Part XV of the Insurance Code, titled "Standard Fire Policy." La.Rev.Stat. § 22:691-695.³ Section 22:691(A) states that "[t]he printed form of a policy of fire insurance, as set forth in Subsection F shall be known and designated as the `standard fire insurance policy of the State of Louisiana.'" La.Rev.Stat. § 22:691(A). The form provides for insurance "against all DIRECT LOSS BY FIRE, LIGHTNING AND BY REMOAL FROM PREMISES ENDANGERED BY THE PERILS INSURED AGAINST IN THIS POLICY, EXCEPT AS HEREINAFTER PROVIDED . ..." La.Rev.Stat. § 22:691(F) (capital letters in original). The form also provides that insurance against any other peril "shall be by endorsement in writing hereon or added hereto." Id.

A. Perils Other Than Fire

The parties disagree as to whether the VPL applies to perils other than fire. Defendants assert that the plain language of the VPL demonstrates that it applies only to the peril of fire, that the history of the VPL shows that it historically was meant to protect against the particular problems of evaluating a loss caused by fire, and that federal courts have found that the VPL applies only to the peril of fire. Plaintiffs contend that the term "any fire insurance policy" in the VPL refers to any...