Credeur Tr. v. Liberty Mut. Ins. Co.
| Decision Date | 08 April 2022 |
| Docket Number | 2:21-CV-00126 |
| Parties | CREDEUR TRUST v. LIBERTY MUTUAL INSURANCE CO |
| Court | U.S. District Court — Western District of Louisiana |
MEMORANDUM RULING
Before the Court is a Motion for Summary Judgment [Doc. 30] filed by defendant Liberty Personal Insurance Company[1] (“Liberty”), who moved to dismiss the claims asserted by Credeur Trust in this case because (1) Credeur Trust lacks standing to bring the claims asserted herein in its own name as a matter of Louisiana law; and (2) defendant argues Credeur Trust was not properly established under the Louisiana Trust Code and therefore is not a legal entity entitled to seek relief from this Court.
Plaintiffs have filed an Amended Complaint [Doc. 37], naming Darlene Kiteley as trustee of Credeur Trust as plaintiff, curing the first issue, and the remaining issue is if the Credeur Trust was properly formed. Plaintiff Credeur Trust opposes the motion [Doc. 35]. All briefs have been filed, and as such the issue is now ripe for review.
This suit arises from damages caused by Hurricane Laura, on August 27, 2020, to a property located at 4549 Powell Lane, Lake Charles, Louisiana 70605 (the “Property”).
On or about August 15, 2019, Rebecca Ann Credeur and American Property Solutions, LLC (“APS”) entered into a Standard Purchase and Sale Agreement, wherein Ms. Credeur agreed to sell the Property to APS. Doc. 35-2 Declaration of Shane Heinen; Doc. 35-3 Declaration of Rebecca Credeur.
On or about September 6, 2019, Credeur Trust was formed to hold the Property by execution of a Trust Agreement and Declaration of Trust (“Trust Agreement”), wherein APS was designated as grantor and beneficiary and wherein Darlene Kiteley was designated as trustee. Doc. 35-2 Trust Agreement and Declaration of Trust. The Trust Agreement states, in pertinent part: “The corpus of the Trust will be the real property that Beneficiaries convey or cause to be conveyed in fee simple absolute to the Trustee by deed.” Id.
On or about September 11, 2019, Rebecca Credeur executed a Limited Power or Attorney to APS, granting APS the power to convey the Property. Doc. 35-2 Limited Power of Attorney. On the same day, at APS's direction, Ms. Credeur executed an Act of Sale and Assumption, conveying the property to Darlene Kiteley in her capacity of trustee of the Credeur Trust. Doc. 35-2 Act of Sale and Assumption. Ms Credeur executed the Act of Sale in Kingwood, Texas and mailed the release to Ms. Kiteley, who countersigned in Lake Charles, Louisiana on September 13, 2019. Id.
On August 27, 2020, Hurricane Laura caused damage to the Property. Shane Heinen, owner of APS, reported the Loss to Liberty, who assigned it claim number HD000-043416892-01 Doc. 35-2 Declaration of Shane Heinen. Prior to Hurricane Laura, the Property was used as rental property and APS derived rental income therefrom. Id. Plaintiff now argues that Liberty has failed to tender insurance proceeds sufficient to restore the Property to its pre-loss condition, and that Liberty has failed to compensate Plaintiff for its loss of use. Doc. 35 Memorandum in Opposition to Motion for Summary Judgment.
On January 17, 2021, Plaintiff filed suit alleging a Breach of Insurance Contract as well as Bad Faith damages in violation of La. R.S. §§ 22:1973 and 22:189.
Under Rule 56(a), “[t]he court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” The moving party is initially responsible for identifying portions of pleadings and discovery that show the lack of a genuine issue of material fact. Tubacex, Inc. v. M/V Risan, 45 F.3d 951, 954 (5th Cir. 1995). He may meet his burden by pointing out “the absence of evidence supporting the nonmoving party's case.” Malacara v. Garber, 353 F.3d 393, 404 (5th Cir. 2003). The non-moving party is then required to go beyond the pleadings and show that there is a genuine issue of material fact for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). To this end he must submit “significant probative evidence” in support of his claim. State Farm Life Ins. Co. v. Gutterman, 896 F.2d 116, 118 (5th Cir. 1990). “If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted.” Anderson, 477 U.S. at 249 (citations omitted).
A court may not make credibility determinations or weigh the evidence in ruling on a motion for summary judgment. Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000).
The court is also required to view all evidence in the light most favorable to the non-moving party and draw all reasonable inferences in that party's favor. Clift v. Clift, 210 F.3d 268, 270 (5th Cir. 2000). Under this standard, a genuine issue of material fact exists if a reasonable trier of fact could render a verdict for the nonmoving party. Brumfield v. Hollins, 551 F.3d 322, 326 (5th Cir. 2008).
Liberty argues that since Plaintiff did not have ownership of the Property at the time that the Trust Agreement was executed, as a matter or law the Credeur Trust is an absolute nullity. Doc. 38 Defendant's Reply in Support of Motion for Summary Judgment. Liberty points out that the Property was not conveyed to Credeur Trust's Trustee until five days after the Trust Agreement was signed. Liberty argues that this renders the trust an absolute nullity because a contemporaneous transfer of property is required for valid formation of a trust. To support this assertion, Liberty cites G.E. Oil & Gas, LLC v. Waguespack, 523 F.Supp.3d 926, 933, which notes the Louisiana Trust Code defines a trust as “the relationship resulting from the transfer of title to property.”
Plaintiffs refute this argument and cite La. R.S. § 9:1822 which states “[a]n inter vivos trust is...
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