Robin Passaro LOUQUE, Individually and on behalf of all others similarly situated, Plaintiff-Appellant, v. ALLSTATE INSURANCE COMPANY, Defendant-Appellee.
No. 01-30857.
United States Court of Appeals, Fifth Circuit.
Dec. 13, 2002.
Rehearing Denied Jan. 24, 2003.
So far as Angleton‘s argument can be interpreted as requiring a substantial federal interest to keep
VI.
Angleton argues that collateral estoppel prevents the empaneling of a federal jury to decide factual questions already determined by a state jury. Collateral estoppel, or issue preclusion, requires that “when an issue of ultimate fact has once been determined by a valid and final judgment, that issue cannot again be litigated between the same parties in any future lawsuit.” Ashe v. Swenson, 397 U.S. 436, 443, 90 S.Ct. 1189, 25 L.Ed.2d 469 (1970) (emphasis added). Collateral estoppel is inapplicable here, because the United States and Texas, as separate sovereigns, are not the “same party.”
In Ashe, the Court held that collateral estoppel is embodied in the Double Jeopardy Clause. Id. at 445, 90 S.Ct. 1189. Because that clause does not bar the United States from prosecuting a defendant for the same conduct after an unsuccessful state prosecution, and because collateral estoppel is embodied in the clause, collateral estoppel does not bar Angleton‘s successive federal prosecution. Because two sovereigns are permitted to prosecute for the same crime, “it would be anomalous, indeed, if a sovereign were allowed the greater power of reprosecuting individuals for offenses for which they had been acquitted but were denied the lesser power of proving the underlying facts of such offenses.” United States v. Tirrell, 120 F.3d 670, 676 (7th Cir.1997).
The order of the district court, denying Angleton‘s motion to dismiss the indictment, is AFFIRMED, and this matter is REMANDED for further appropriate proceedings. As the government requests, in the interest of expediting this matter, the mandate shall issue forthwith.
Stanley Paul Baudin, Patrick W. Pendley (argued), Pendley Law Firm, Plaquemine, LA, Gregory J. Miller, Harold Dean Lucius, Miller, Lucius & Hampton, Baton Rouge, LA, for Plaintiff-Appellant.
Judy Y. Barrasso (argued), Mark Eric Jaffe, Stone, Pigman, Walther, Wittmann & Hutchinson, New Orleans, LA, for Defendant-Appellee.
Before JOLLY, JONES and BARKSDALE, Circuit Judges.
EDITH H. JONES, Circuit Judge:
BACKGROUND
Allstate insured Robin Louque, the named class representative, under an auto-mobile policy providing $10,000 in liability coverage. Louque alleges that she was in an automobile accident in which another person was injured, she was sued by the victim, and Allstate refused to settle. Judgment was entered against Louque and Allstate for $7569, including $5000 in statutory penalties for violations of
Louque contends that Allstate‘s policy was to refuse to settle minor-impact, soft-tissue injury (MIST) claims where the claimant was represented by an attorney, regardless of a claim‘s merit. The resulting delays and judgments adversely affected Allstate policy holders’ creditworthiness. Louque pleads that this practice effected a breach of contract, breach of Allstate‘s fiduciary obligations under the policies, and violation of
After Allstate removed this action to federal court based on diversity jurisdiction, it moved to dismiss. Louque sought to remand, asserting that the jurisdictional amount was not satisfied. The district court denied remand and held that this action is governed by
DISCUSSION
A. Removal Jurisdiction
The parties spar primarily over whether
This court reviews the denial of remand de novo. Manguno v. Prudential Prop. & Cas. Ins. Co., 276 F.3d 720, 722 (5th Cir.2002). Louisiana prohibits Louque from stating an ad damnum in her petition. Therefore, Allstate must establish the jurisdictional amount by a preponderance of the evidence. Id. at 723. This is accomplished if “(1) it is apparent from the face of the petition that the claims are likely to exceed $75,000, or, alternatively, (2) the defendant sets forth ‘summary judgment type evidence’ of facts in controversy that support a finding of the requisite amount.” Id. The district court held: “Because Louque intends to represent a nationwide class of ‘tens of thousands, if not hundreds of thousands of individuals’ and seeks both damages and penalties for each class member, the Court finds that Louque‘s attorneys’ fees will easily exceed the jurisdictional threshold.”
Along this line,
The court may allow the representative parties their reasonable expenses of litigation, including attorney‘s fees, when as a result of the class action a fund is made available, or a recovery or compromise is had which is beneficial, to the class.
Art. 595 (emphasis added). Citing In re Abbott Laboratories, 51 F.3d 524, 526-27 (5th Cir.1995), aff‘d by an equally divided court, 529 U.S. 333, 120 S.Ct. 1578, 146 L.Ed.2d 306 (2000), the district court held that,
[u]nder ... article 595, attorneys’ fees in a class action lawsuit are wholly allocable to the named plaintiff; and, when article 595 is coupled with a statutory provision mandating an award of attorneys’ fees, federal courts will consider that potential award when determining the amount in controversy.
District Court Opinion at 2. See Manguno, 276 F.3d at 723 (“For purposes of determining the amount in controversy in a Louisiana class action, it has been the belief of some courts that ... article 595 allocates to the class representative the aggregate attorney‘s fees sought for the entire class if a separate statute provides for recovery of attorney‘s fees as an element of damages.“) (citing Abbott Laboratories, supra) (emphasis added).
Recently, our court has clarified that because art. 595 gives a court discretion to award attorney‘s fees to a class representative as “expenses of litigation,” such fees are includable in a jurisdictional amount determination for diversity purposes regardless of the existence of separate statutory authorization of attorneys fees. Grant v. Chevron Phillips Chem. Co., 309 F.3d 864, 2002 U.S.App. LEXIS 21266 (5th Cir.2002). Unfortunately, this new decision does not assist the resolution of this case, because Allstate did not raise and preserve in the trial court the applicability of art. 595 alone to support an attorney‘s fee award.1 We must proceed according to a pre-Grant analysis.
In district court, Allstate maintained that Louque‘s claims are governed by the two earlier-described Louisiana statutes:
(1) All insurers ... shall pay the amount of any claim due any insured within thirty days after receipt of satisfactory proofs of loss from the insured or any party in interest.
(2) All insurers ... shall pay the amount of any third party property damage claim and of any reasonable medical expenses claim due any bona fide third party claimant within thirty days after written agreement of settlement of the claim from any third party claimant.
Failure to make such payment within thirty days after receipt of such satisfactory written proofs and demand therefor, as provided in [§] 22:658(A)(1), or within thirty days after written agreement or settlement as provided in [§] 22:658(A)(2) when such failure is found to be arbitrary, capricious, or without probable cause, shall subject the insurer to a penalty, ... together with all reasonable attorney fees for the prosecution and collection of such loss.
Louque sued under
An insurer ... owes to his insured a duty of good faith and fair dealing. The insurer has an affirmative duty to adjust claims fairly and promptly and to make a reasonable effort to settle claims with the insured or the claimant, or both.
[i]n addition to any general or special damages ... for breach of the imposed duty, the claimant may be awarded penalties assessed against the insurer in an amount not to exceed two times the damages sustained or five thousand dollars, whichever is greater.
This court, noting the similarity of these provisions, has permitted the same type of recovery under either one, even where one of the provisions was not expressly cited. In re Hannover Corp. of America, 67 F.3d 70, 75 (5th Cir.1995). On the basis of Hannover, Allstate maintained, and the district court held, that, even though Louque did not plead
On its face,
When Smith reached the Louisiana Supreme Court, one judge criticized, in dissent, the lower court‘s handling of attorneys’ fees and the caselaw on which the lower court relied. Smith, 679 So.2d at 378-80 (Calogero, J., dissenting). This is irrelevant. The Louisiana Supreme Court should not have reached this issue, as it decided the case on a dispositive antecedent ground. Moreover, we can hardly accord a solo dissenting opinion any weight as an expression of Louisiana law.
The concurrence suggests that the applicability of
Second, it is not for us to second-guess whether Louisiana courts will ultimately find the Smith-Maryland Casualty-Domangue line of cases congruent with, supplemental to, or contradicted by
there is no inconsistency in the district court‘s action of denying remand and then dismissing [plaintiff‘s] claims.... “Jurisdiction ... is not defeated ... by the possibility that the averments might fail to state a cause of action on which [plaintiff] could actually recover.”
Hawkins v. Nat. Ass‘n of Sec. Dealers, Inc., 149 F.3d 330, 331 (5th Cir.1998) (quoting Bell v. Hood, 327 U.S. 678, 682, 66 S.Ct. 773, 90 L.Ed. 939 (1946)).
Thus, the question before us is whether the complaint, fairly read, states a claim exceeding $75,000.3 A successful result for Louque on the merits of her claims that Allstate failed “to adjust all claims fairly and promptly and to make reasonable efforts to settle” would put her in line to recover class action attorney‘s fees far exceeding $75,000. The court accordingly had jurisdiction over her claim and, through its exercise of supplemental jurisdiction, over the claims of the class. See
B. Merits
Louque‘s challenge to the dismissal of her case is perfunctory. In two pages of briefing, she cites—once each—
Louque‘s arguments are, in any event, fully disposed of by the district court‘s opinion, which we quote:
a. Breach of Contract
To state a claim for breach of an insurance contract under Louisiana law, a plaintiff must allege a breach of a specific policy provision. See Bergeron v. Pan Am. Assurance Co., 731 So.2d 1037, 1045 (La.App. 4th Cir.1999). In the instant case, although Louque claims that Allstate refused to settle “valid” claims, she fails to cite any policy provision that requires Allstate to settle claims before trial. In fact, the only policy provision Louque cites provides that Allstate has unfettered discretion in deciding whether to settle cases:
We will defend an insured person sued as the result of a covered auto accident, even if the suit is groundless, false or fraudulent. We will choose the counsel. We may settle any claim if we believe it is proper.
Def.‘s Ex. A at 5.
In Employers’ Surplus Line Ins. Co. v. City of Baton Rouge, 362 So.2d 561, 564 (La.1978), the Louisiana Supreme Court construed a similar policy provi-
sion. The Employers’ policy provided that the insurance company was authorized to “make such investigation, negotiation and settlement of any claim or suit it deems expedient.” Id. at 565. The Louisiana Supreme Court explained that: This provision vests the insurer with absolute authority to settle claims within the limits of the policy with the insured‘s having no power to compel the insurer to make settlements or prevent it from doing so.
Id. As in Employers’ Surplus, Allstate is given absolute discretion over whether or not to settle a claim. Because Allstate‘s policy does not obligate it to settle any claim before trial, the Court finds that Louque fails to state a claim for breach of contract.
b. Breach of Fiduciary Obligation
Louque also alleges that Allstate breached a fiduciary obligation by failing to settle “valid claims” before trial. However, as stated above, Allstate was not contractually bound to settle Louque‘s claim; and Louisiana law does not recognize an extracontractual obligation where there is no risk of exposing the insured to excess liability. See, e.g., Ragas v. MGA Ins. Co., 1997 WL 79357, at *2 (E.D.La. Feb.21, 1997) (McNamara, J.) (holding that an insured has no cause of action against its insurer for bad faith refusal to settle in the absence of an adjudicated excess judgment against the insured). In the case at bar, Louque has neither an “adjudicated excess judgment” nor even any claim that Allstate‘s decision to go to trial exposed her to excess liability. To the contrary, Louque avers that prior to trial the “third party was claiming damages well below the $10,000 policy limits of [Louque‘s] policy.” Compl. at ¶ 15. Because Louque does not allege that Allstate‘s alleged refusal to settle exposed her to excess liability, the Court finds that she has failed to state a cause of action for breach of fiduciary obligation.
For these reasons, Louque‘s complaint against Allstate failed to state a claim upon which relief can be granted.
CONCLUSION
The district court correctly assumed removal jurisdiction and correctly entered judgment dismissing Louque‘s complaint.
AFFIRMED.
RHESA HAWKINS BARKSDALE, Circuit Judge, specially concurring:
I concur in the majority‘s holding: (1) Allstate did not preserve in district court the applicability of article 595 (therefore, our recent Grant decision is not applicable); and (2) pursuant to Rule 12(b)(6), Louque failed to state a claim upon which relief can be granted.
I have some misgivings, however, concerning whether the diversity jurisdictional amount is satisfied. Therefore, I concur dubitante in holding
Notes
Louque cannot rely on these cases for affirmative recovery while disavowing their applicability to the amount in controversy determination.Appellant respectfully suggests that the facts and damages as alleged by the Appellant are res nova and are no different than an excess judgment situation. In fact, Allstate‘s actions in these instances could be much more damaging than an excess judgment.