Harrington v. State Farm Fire & Cas. Co.

• Decision Date: 20 March 2009
• Docket Number: No. 08-30536.,No. 08-30339.,No. 08-30349.,08-30339.,08-30349.,08-30536.
• Citation: 563 F.3d 141
• Parties: Lawrence HARRINGTON; Sandra Harrington Fayard; Wilfred Montegue; Christina Montegue; Teri Waggoner; Judith A. Young, Plaintiffs-Appellants, v. STATE FARM FIRE & CASUALTY COMPANY, Defendant-Appellee. Justin Benit; Audrey Benit; Georgia Bigelow; Clarence Bourg; Ruth Bourg; et al., Plaintiffs-Appellants, v. State Farm Fire & Casualty Company, Defendant-Appellee. Andria Arceneaux; Jay Bohrer; Maurice Olivier; Pamela Pitre; Keith Pitre; Adrian Sapia, Sr.; Janet Sapia, Plaintiffs-Appellants, v. State Farm Fire & Casualty Company, Defendant-Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

563 F.3d 141

Lawrence HARRINGTON; Sandra Harrington Fayard; Wilfred Montegue; Christina Montegue; Teri Waggoner; Judith A. Young, Plaintiffs-Appellants, v. STATE FARM FIRE & CASUALTY COMPANY, Defendant-Appellee.

Justin Benit; Audrey Benit; Georgia Bigelow; Clarence Bourg; Ruth Bourg; et al., Plaintiffs-Appellants, v. State Farm Fire & Casualty Company, Defendant-Appellee.

Andria Arceneaux; Jay Bohrer; Maurice Olivier; Pamela Pitre; Keith Pitre; Adrian Sapia, Sr.; Janet Sapia, Plaintiffs-Appellants, v. State Farm Fire & Casualty Company, Defendant-Appellee.

No. 08-30339.

No. 08-30349.

No. 08-30536.

United States Court of Appeals, Fifth Circuit.

March 20, 2009.

George Frazier (argued), New Orleans, LA, for Plaintiffs-Appellants.

David A. Strauss (argued), Christian Albert Garbett, Sr. and Sarah S. Monsour, King Krebs & Jurgens PLLC, New Orleans, LA, for Defendants-Appellees.

Appeals from the United States District Court for the Eastern District of Louisiana.

Before GARWOOD, DAVIS and DENNIS, Circuit Judges.

W. EUGENE DAVIS, Circuit Judge:

Plaintiffs-Appellants ("Appellants") in these consolidated cases sought recovery under their respective homeowner's policies for damage to their homes from Hurricane Katrina. The district courts read Appellants' complaints as seeking damage caused only by flood and dismissed the complaints under FED.R.CIV.P. 12(b)(6). We disagree with the district courts' interpretation of the complaints and conclude that Appellants also sought recovery for unpaid wind damage. We therefore reverse and remand for further proceedings.

I. FACTS AND PROCEDURAL BACKGROUND

This consolidated appeal challenges judgments in three separate cases: Harrington v. State Farm Fire & Casualty Company, No. 08-30339; Benit v. State Farm Fire & Casualty Company, No. 08-30349; and Arceneaux v. State Farm Fire & Casualty Company, No. 08-30536.¹ All three suits sought to recover from Defendant-Appellee State Farm Fire & Casualty Company ("State Farm") under each plaintiff's homeowner's policy for damage to each plaintiff's home sustained in Hurricane Katrina. The complaints, amended complaints, and motions in all three cases are identical in all relevant respects. Harrington and Benit share nearly identical procedural histories, while Arceneaux differs slightly.

Each suit was first filed in state court and later removed to the federal district court. In each of the cases, Appellants filed identical complaints, which attributed their property damage to "wind, wind driven rain, storm surge, overflowing of canals and breaches of levees." Appellants alleged that State Farm was responsible for the damage and that, instead of paying the full policy limits, "Defendant made only partial payment based upon wind and wind driven rain alone."

At the time they filed their complaints, this Court had ruled, a few weeks earlier, that standard homeowner insurance policies, like the policies at issue here, did not cover flood damage from Hurricane Katrina. In re Katrina Canal Breaches Litig., 495 F.3d 191, 214 (5th Cir.2007).² Relying on this case, State Farm filed a motion to dismiss under Fed.R.Civ.P. 12(b)(6) in each of the suits for failure to state a claim upon which relief can be granted, arguing that this ruling foreclosed Appellants' only theory of recovery.³ After filing its motion but before Appellants responded, State Farm filed an answer in each of the cases on January 3, 2008.

In each of the cases, Appellants filed what was labeled an "Opposition" to State Farm's Rule 12(b)(6) motion in mid-January 2008. At the same time Appellants filed a First Amended Complaint to clarify that they sought to recover for unpaid wind damage as well as flood damage. Appellants' opposition to the Rule 12(b)(6) motion expressly declined to address the merits of State Farm's motions. Instead, Appellants relied on the clarification in their First Amended Complaint making it clear that their suits sought unpaid wind damage in addition to flood damage.⁴ However, because State Farm had already filed an answer in each of the cases (a fact that Appellants overlooked) and Appellants had not obtained the necessary leave of court or State Farm's consent, the clerk advised Appellants that the First Amended Complaint was deficient.

The district court eventually granted State Farm's Rule 12(b)(6) motion in each case, finding that the original complaint did not seek unpaid wind damage; that the complaint in effect conceded that State Farm had discharged its obligation to pay for wind damage when it stated "Defendant made only partial payment based upon wind and wind driven rain alone"; and that Appellants had never properly amended the complaint to state an additional claim. Therefore, the district court concluded that appellants' claims were based solely upon flood damage under Louisiana's Valued Policy Statute, LA.REV. STAT. ANN. § 22:695 (2005). The above discussion explains generally what transpired in the district courts in all three suits. We now turn to the procedural differences between Harrington and Benit on the one hand and Arceneaux on the other.

A. Harrington and Benit

In Harrington and Benit, Appellants attempted to file their First Amended Complaint (along with the "Opposition") on January 8, 2008. The clerk issued a deficiency notice the next day and gave appellants until January 16, 2008 to cure the deficiency by seeking leave of court and refiling their amended complaint. Id. On January 15, Appellants tried to cure the deficiency by attempting to file a "Supplemental Opposition to Motion to Dismiss," which, despite its title, consisted almost entirely of a request for leave to amend their original complaint.⁵ The following day, on January 16, the district court held a hearing on the Rule 12(b)(6) motions in both cases. It granted the motion as to Appellants' flood damage claims but, upon the request of Appellants' counsel, agreed to defer ruling on the motion with respect to all other claims until the magistrate judge ruled on what Appellants represented was a pending motion for leave to amend their complaint filed the day before.

In fact, however, that motion to amend was never properly filed with the court. That very same day (January 16), the district clerk designated the document deficient because Appellants entitled their motion a "Supplemental Opposition," a pleading which cannot be filed without leave of court under the district court's local rules. See LR7.5E. Thus, the district court had deferred ruling upon Appellee's motion to dismiss under the mistaken belief that a motion for leave to amend the complaint was pending before the magistrate judge. When Appellants received that second deficiency notice, they believed that they still had until January 24, the date specified by the clerk, to cure that deficiency and properly amend their complaint in an effort to defeat the Rule 12(b)(6) motion. However, when the district court discovered that no motion to amend was accepted by the clerk or properly before the magistrate judge, it granted State Farm's 12(b)(6) motion as to all claims on January 22, 2008, two days before the clerk's cure date.

The court entered an initial judgment in Benit on January 23 but filed an amended judgment in Benit and the original judgment in Harrington the next day, on January 24.⁶ On Saturday, February 23, 2008, Appellants filed a motion for extension of time in which to file a notice of appeal, which the district court granted on Monday, February 25, allowing Appellants 30 additional days in which to file their notice of appeal. Appellants did not file a Rule 59(e) motion to amend or alter the judgment, but instead on March 13, 2008 filed a Rule 60 motion to vacate, which the district court denied on March 25. On March 26, 2008 (30 days after the district court's order granting a 30 day extension to appeal), Appellants filed a notice of appeal in each case. The notices of appeal sought review of the judgments dismissing the suits (the January 24 original judgment in Harrington and amended judgment in Benit, and the original January 23 judgment in Benit) and the March 25 denial of the Rule 60 motions.

B. Arceneaux

Arceneaux proceeded along a slightly different path. In Arceneaux, Appellants attempted to file their First Amended Complaint on January 15, 2008. The next day, the clerk's office issued a deficiency notice for failure to obtain leave of court and set the deficiency cure date for January 24, one day after the scheduled hearing on State Farm's motion to dismiss. On January 22, appellants attempted to file a "Sur-Reply Memorandum in Opposition to Defendant's Motion to Dismiss." This opposition proceeded on the theory that their Amended Complaint had been properly filed and was before the court. In this opposition Appellants did not attempt to cure the Amended Complaint's deficiency by requesting leave to amend. Nor did Appellants obtain leave of court to file the "Sur-Reply" itself, so it was also deemed deficient by the clerk.

On January 24, the day established by the clerk to cure Appellants' deficiency, the district court granted State Farm's Rule 12(b)(6) motion. Appellants later filed a Motion for Leave to File a First Amended Complaint, which the magistrate judge denied on April 3, 2008 because the case had already been dismissed. That same day, the district court entered judgment dismissing the suit. On April 17, Appellants timely filed a Rule 59(e) motion to amend or alter the judgment and a Rule 60(b) motion to vacate the judgment, both of which the district court denied on May 14. On May 21, 2008, Appellants filed a notice of appeal, seeking review of the April 3 judgment and the May 14 order denying their Rule 59(e) and Rule 60(b) motions.

II. ISSUES ON APPEAL

Appellants in all three cases argue first that they sufficiently pled a claim for State Farm's failure to pay for unpaid wind damage (hereinafter "wind claim") in their original complaint, and the...