Court Opinion

ID: 9950738
Source: CourtListenerOpinion
Date Created: 2024-03-14 18:00:50.569584+00
Date Added: 2024-06-11T14:36:38.414705
License: Public Domain

Case: 23-30434           Document: 53-1         Page: 1      Date Filed: 03/14/2024

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

                                  ____________                                 FILED
                                                                         March 14, 2024
                                   No. 23-30434                           Lyle W. Cayce
                                  ____________                                 Clerk

Patrician Management, L.L.C.; New Orleans Navy
Housing, L.L.C.,

                                                               Plaintiffs—Appellants,

                                         versus

BXS Insurance, Incorporated,

                                            Defendant—Appellee.
                  ______________________________

                  Appeal from the United States District Court
                     for the Eastern District of Louisiana
                           USDC No. 2:22-CV-1487
                  ______________________________

Before Wiener, Haynes, and Higginson, Circuit Judges.
Per Curiam: *
      Plaintiffs-Appellants Patrician Management, LLC and New Orleans
Navy Housing, LLC (collectively, “Plaintiffs”) appeal the district court’s
dismissal of their complaint against their insurer, Defendant-Appellee BXS
Insurance. For the reasons set forth below, we AFFIRM.

      _____________________
      *
          This opinion is not designated for publication. See 5th Cir. R. 47.5.
 Case: 23-30434         Document: 53-1         Page: 2      Date Filed: 03/14/2024

                                     No. 23-30434

                                   I. Background
          Plaintiffs own several residential housing units at the Naval Air
Station Joint Reserve in Belle Chasse, Louisiana and in Federal City in
Algiers, Louisiana. 1 On April 23, 2020, Plaintiffs procured a one-year
insurance policy for those properties from BXS (“Policy 1”). At that time,
Plaintiffs’ properties were valued at $107,668,973—which Policy 1 refers to
as the “Statement of Values” or “SOV.” Policy 1 included a “Named Storm
Deductible” that established a 3% deductible for loss caused by named
storms, like hurricanes, calculated using the “Total Insurance Values at the
time of the loss at each Insured Location.” On October 28, 2020, Plaintiffs’
properties were damaged by Hurricane Zeta. Their deductible was
determined to be $3,230,069, which was calculated by the Underwriters
using the SOV rather than the value at the time of loss as dictated in the
Policy.
          Unhappy with a deductible of over three million dollars, Plaintiffs
sought coverage with a lower deductible for the period of April 23, 2021 to
April 23, 2022 (“Policy 2”). BXS proposed adding a “Per Building
Deductible Endorsement,” which would modify the Named Storm
Deductible as follows:

          _____________________
          1
         Because this case comes to us on review of a motion to dismiss, all facts in the
complaint are assumed to be true. See Lampton v. Diaz, 639 F.3d 223, 226 (5th Cir. 2011)
(quoting Kalina v. Fletcher, 522 U.S. 118, 122 (1997)).

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                                  No. 23-30434

BXS represented to Plaintiffs that this endorsement “would be more
beneficial in the event of a smaller loss where only some of the buildings at
the property locations, rather than all of them, are affected.” Plaintiffs agreed
to the modification, which was the only aspect that changed between Policy
1 and Policy 2. The value of the properties at the time that Policy 2 was
issued—Policy 2’s SOV—was determined to be $112,662,167.
       On August 29, 2021, all of Plaintiffs’ properties were damaged by
Hurricane Ida. Their deductible was assessed at $5,078,717.45, which was
calculated using the Underwriters’ estimated value of the properties at the
time of loss and was “based specifically on the ‘Per Building Deductible
Endorsement.’” The deductible would have been $3,379,865.01 had it been
calculated using the Policy’s SOV rather than the properties’ value at the
time of loss.
       Plaintiffs assert that BXS acted negligently and in breach of its
fiduciary duty by failing to apprise them of the impact of the Per Building
Deductible Endorsement on their Named Storm Deductible. The district
court dismissed Plaintiffs’ complaint and denied their motion for
reconsideration and leave to amend.
       The district court had jurisdiction over this case pursuant to 28 U.S.C.
§ 1332. We have appellate jurisdiction pursuant to 28 U.S.C. § 1291.

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                                  No. 23-30434

                            II. Motion to Dismiss
       We review a district court’s grant of a motion to dismiss de novo,
“accepting all well-pleaded facts as true and viewing those facts in the light
most favorable to the plaintiffs.” Meador v. Apple, Inc., 911 F.3d 260, 264 (5th
Cir. 2018) (quoting Dorsey v. Portfolio Equities, Inc., 540 F.3d 333, 338 (5th
Cir. 2008)). A complaint survives a motion to dismiss under Federal Rule of
Civil Procedure 12(b)(6) only if it “pleads factual content that allows the
court to draw the reasonable inference that the defendant is liable for the
misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). “Factual
allegations must be enough to raise a right to relief above the speculative
level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2008).
       The district court held that Plaintiffs failed to plead sufficient facts to
establish that BXS’s actions caused their alleged injury: “having a higher
deductible than expected.” We agree. The addition of the Per Building
Deductible Endorsement did not alter how Plaintiffs’ property was to be
valued in the event of a named storm. In both Policy 1 and Policy 2, the
Named Storm Deductible was to be calculated using the value of the property
“at the time of the loss.” An insured is charged with knowledge of its policy,
and those instant Policies expressly state that the Named Storm Deductible
will be based on the “Total Insurable Values at the time of the loss.” See
Isidore Newman Sch. v. J. Everett Eaves, Inc., 42 So.3d 352, 358–59 (La. 2010).
Even accepting Plaintiffs’ allegation that Underwriters calculated the
properties’ value after Hurricane Ida “based specifically on the ‘Per Building
Deductible Endorsement,’” that endorsement did not change the method of
valuation. As the district court explained, “[i]t was the increase in the
property valuation that caused the higher deductible, not the manner in
which the deductible was calculated per the endorsement.” And the property
valuation was conducted by the Underwriters rather than BXS—any mistake
that they made in calculating the Hurricane Zeta claim under Policy 1 is not

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                                  No. 23-30434

attributable to BXS. Because the complaint fails to plead facts that show that
BXS was responsible for Plaintiffs’ higher-than-expected deductible, the
district court did not err in granting BXS’s motion to dismiss.
                             III. Leave to Amend
       Denial of a request for leave to amend is reviewed for abuse of
discretion. Edionwe v. Bailey, 860 F.3d 287, 291 (5th Cir. 2017). Leave should
be freely given “when justice so requires.” Fed. R. Civ. P. 15(a). The
district court denied leave to amend because Plaintiffs did not (1) point to
new evidence that could not have been raised earlier; (2) identify evidence
which would “bridge the gap” between BXS’s actions and the higher-than-
expected deductible; or (3) raise any extraordinary circumstances justifying
relief. This does not reflect an “erroneous view of the law” or a “clearly
erroneous assessment of the evidence.” See Hesling v. CSX Transp., Inc., 396
F.3d 632, 638 (5th Cir. 2005). Plaintiffs’ motion for reconsideration did not
establish any reason why they could not have sought to amend their pleadings
after BXS filed its motion to dismiss and before the district court put time
and energy into resolving the motion. This court “consistently up[holds] the
denial of leave to amend where the party seeking to amend has not clearly
established that he could not reasonably have raised the new matter prior to
the trial court’s merits ruling.” Briddle v. Scott, 63 F.3d 364, 379 (5th Cir.
1995). Further, Plaintiffs failed to identify facts that they could have added to
their complaint to overcome the causation issue and plausibly state a claim as
required. See Edionwe, 800 F.3d at 294. The district court therefore had the
requisite “justifying reasons” for denying Plaintiffs’ request for leave to
amend and did not abuse its discretion in doing so. See Halbert v. City of
Sherman, 33 F.3d 526, 529 (5th Cir. 1994) (quoting Foman v. Davis, 371 U.S.
178, 182 (1962)).
       The judgment of the district court is AFFIRMED.

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