Court Opinion

ID: 4661593
Source: CourtListenerOpinion
Date Created: 2021-02-19 19:00:20.024486+00
Date Added: 2024-06-11T08:02:14.487684
License: Public Domain

Case: 20-60783     Document: 00515750005         Page: 1     Date Filed: 02/19/2021

              United States Court of Appeals
                   for the Fifth Circuit                               United States Court of Appeals
                                                                                Fifth Circuit

                                                                              FILED
                                                                      February 19, 2021
                                  No. 20-60783
                                                                         Lyle W. Cayce
                                Summary Calendar                              Clerk

   Ethan Hoggatt; Eric Hoggatt, DDS; Plaintiffs 3-29,
   Allstate Insureds sold similar bogus “Dummy”
   insurance policies,

                                                           Plaintiffs—Appellants,

                                       versus

   Allstate Insurance, By its agent, Andy Dyson; Andy Dyson,
   Individually and in any corporate capacity; Mrs. Hand, Tupelo Allstate
   Employee,

                                                         Defendants—Appellees.

                  Appeal from the United States District Court
                    for the Northern District of Mississippi
                             USDC No. 1:19-CV-14

   Before Wiener, Southwick, and Duncan, Circuit Judges.
   Per Curiam:*

          *
            Pursuant to 5th Circuit Rule 47.5, the court has determined that this
   opinion should not be published and is not precedent except under the limited
   circumstances set forth in 5th Circuit Rule 47.5.4.
Case: 20-60783      Document: 00515750005          Page: 2    Date Filed: 02/19/2021

                                    No. 20-60783

          Ethan Hoggatt was involved in a car wreck while driving his parent’s
   vehicle. After a dispute over insurance coverage arose, Ethan and his father,
   Eric Hoggatt, sued Allstate Insurance Company, the agency through which
   the family purchased its Allstate insurance, and certain individuals at that
   agency. The Hoggatts are represented by Victoria Hoggatt, Eric’s wife and
   Ethan’s mother. This suit is very much a family affair. The district court
   denied the Hoggatts’ motion to amend their complaint and dismissed the
   lawsuit for failure to state a claim. The court also imposed financial penalties
   on the Hoggatts. We AFFIRM.
          The defendants move in this court for additional financial penalties
   against the plaintiffs. That motion is DENIED.

                FACTUAL AND PROCEDURAL BACKGROUND
          In December 2018, the Hoggatts filed suit in state court in Monroe
   County, Mississippi, against Allstate, the Dyson Agency, certain individuals,
   as well as others now dismissed from the suit. The defendants timely
   removed the suit to the United States District Court for the Northern
   District of Mississippi based on federal-question jurisdiction. See 28 U.S.C.
   § 1441(c).
          Our understanding of the complaint is that it claims that Ethan
   Hoggatt, the adult son of Eric and Victoria Hoggatt, was involved in an auto
   accident with his own vehicle in March 2018. He telephoned the Dyson
   Agency to change his Allstate policy, seeking to remove his now-totaled
   vehicle and to cover him only as a driver. The Hoggatts claim a Dyson
   employee told Ethan that he could not cancel his existing policy but that the
   premium would be lowered. Unfortunately, in September of the same year,
   Ethan while driving his parent’s car was involved in another wreck. Ethan,

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                                    No. 20-60783

   though, was not shown as an authorized driver on that vehicle’s policy, and
   his own Allstate coverage did not cover him as a driver in a non-owned car.
          This lawsuit followed, which includes such claims as fraud, violations
   of the Racketeer Influenced and Corrupt Organizations (“RICO”) Act, and
   other claims. In time, the district court imposed monetary penalties on the
   Hoggatts for failure to use the formal discovery process and for vexatious
   behavior. The district court denied the Hoggatts’ motion to amend their
   complaint and granted the defendants’ motion to dismiss for failure to state
   a claim. The Hoggatts appealed.

                                  DISCUSSION
          We review three district court rulings: (1) the dismissal order, (2) the
   denial of the motion to amend, and (3) the sanctions order. There may be
   other issues, but the Hoggatts have not adequately explained them in their
   briefing.
   I.     Motion to dismiss
          The district court determined that the magistrate judge properly
   dismissed all claims in the complaint. We give de novo review to an order
   dismissing a suit pursuant to Rule 12(b)(6). Harris Cnty. Tex. v. MERSCORP
   Inc., 791 F.3d 545, 551 (5th Cir. 2015). In our review, all well-pled facts are
   accepted as true, and we consider “those facts in the light most favorable to
   the plaintiff.” Id. (quoting Toy v. Holder, 714 F.3d 881, 883 (5th Cir.2013)).
          As to fraud, the district court concluded that the allegations did not
   support that anyone with the insurance agency “made any representation
   that [Ethan’s] new policy would cover collision damage to a non-owned
   vehicle” and instead it was clear the policy covered only Ethan’s now-totaled

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                                    No. 20-60783

   vehicle. We find nothing in the complaint to the contrary. Dismissal was
   appropriate.
          As to the RICO claim, the district court concluded that the complaint
   failed to plead a RICO enterprise, which is an “essential element.” Bonner
   v. Henderson, 147 F.3d 457, 459 (5th Cir. 1998). The Hoggatts offer no
   meaningful response. We agree with the dismissal.
          The district court then generally addressed the remaining claims that
   may have been part of the complaint. There was no error in the district
   court’s granting of the motion to dismiss for failure to state a claim on
   possible remaining theories, as the allegations were not adequate to present
   other theories of liability.
   II.    Motion to amend
          The district court described the Hoggatts’ desired amendment to the
   complaint as one that would “add defense counsel as parties to this suit in
   what appears to be retaliation for their refusal to produce documents outside
   of discovery and rebukes counsel for filing ‘fraudulent and dilatory motions
   to dismiss.’” The district court denied leave to amend, concluding the
   amendment would be futile.
          In their motion, the Hoggatts cited Mississippi’s version of Federal
   Rule of Civil Procedure 15(d). We will accept this as a minor citation error
   and analyze the motion under the equivalent federal rule, which allows
   supplementing a complaint with claims that arose after the original
   complaint’s filing. Fed. R. Civ. P. 15(d). “We review the district court’s
   denial of leave to file a supplemental complaint for abuse of discretion.”
   Burns v. Exxon Corp., 158 F.3d 336, 343 (5th Cir. 1998). When a district court
   denies a motion to amend based only on futility, though, we review de novo.
   Thomas v. Chevron U.S.A., Inc., 832 F.3d 586, 590 (5th Cir. 2016). As one
   panel notes, the standard of review for denials based on futility under Rule

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                                       No. 20-60783

   15(a) and 15(d) may be different. Connor v. Castro, 719 F. App’x 376, 380 n.1
   (5th Cir. 2018). The Hoggatts argue here for de novo review. Without
   deciding the appropriate standard, we find that the district court’s decision
   was proper even under a de novo review of the denial.
             The district court came to two conclusions: (1) “to the extent [the
   Hoggatts] seek to amend the complaint to add defense counsel as parties, the
   Magistrate Judge’s decision is affirmed”; and (2) “the host of ‘new’ claims
   referenced in the proposed amended complaint . . . appear repetitious or
   directly related to the discovery dispute.”
             In their reply brief, the Hoggatts argue that the attorneys representing
   Allstate are “appropriate Negligence per Se defendants.” What we see in
   the offered amendments is a description of attorney efforts to represent their
   clients, utilizing the available procedural tools. Amendment would have been
   futile.
   III.      Sanctions
             The magistrate judge granted sanctions in the form of attorneys’ fees.
   The district court agreed with the award. The district court then awarded
   attorneys’ fees required to respond to the Hoggatts seeking the court’s
   review of the magistrate judge’s decision.
             The magistrate judge’s rationale for awarding attorneys’ fees was that
   the Hoggatts attempted to circumvent the discovery process by seeking
   documents outside of formal discovery. The Hoggatts’ only response is that
   their request for documentation was pursuant to Section 612 of the Fair
   Credit Reporting Act, as it was based on the cancellation of a policy different
   from that which is the subject of the lawsuit. The Hoggatts generally state
   that the documents requested were pursuant to the non-renewal of Dr. and
   Mrs. Hoggatts’ automobile insurance with Allstate, which is not the policy at
   issue in this case. If there is any merit to that distinction, the Hoggatts have

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                                   No. 20-60783

   not sought to explain it through legal argument in their brief. We do not
   independently research the point. The district court did not abuse its
   discretion in awarding attorneys’ fees.
          We DENY the appellees’ motion for additional attorneys’ fees
   during this appeal.
          AFFIRMED.

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