Bickerstaff et al v. Bickerstaff et al, No. 2:2015cv03639 - Document 52 (E.D. La. 2016)
Court Description: ORDER & REASONS granting 41 Motion to Dismiss for Failure to State a Claim without Prejudice. Party Charles Hausknecht, Jr and Pailet, Meunier and LeBlanc, L.L.P. dismissed. Signed by Judge Sarah S. Vance on 12/28/2016. (mmm)
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Bickerstaff et al v. Bickerstaff et al Doc. 52 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA LORETTA LOIS BICKERSTAFF APPEARING HEREIN THROUGH HER LEGALLY APPOINTED AGENT IN FACT AND MANDATARY, GERALD GREGORY BICKERSTAFF CIVIL ACTION VERSUS NO. 15-3639 CAROLYN KRIDER BICKERSTAFF, ET AL. SECTION “R” (3) ORD ER AN D REASON S Defendants Charles “Benny” Hausknecht, J r. and Pailet, Meunier and LeBlanc, L.L.P. m ove to dism iss plaintiff Loretta Bickerstaff’s claim s against them .1 Because plaintiff cannot proceed with her claim s against defendants until she com plies with the Louisiana Accountancy Act, the Court GRANTS defendants’ m otion. I. BACKGROU N D This diversity action arises out of a property ownership dispute. Plaintiff Loretta Bickerstaff alleges that she is the valid legal owner of a beach house in Gulf Shores, Alabam a. According to plaintiff’s com plaint, Loretta 1 R. Doc. 41. Dockets.Justia.com Bickerstaff purchased the Alabam a beach house in J uly 1993.2 In February 20 10 , plaintiff granted her brother, Richard Bickerstaff, power of attorney, giving him m anagem ent and control of her affairs.3 Plaintiff alleges that Richard Bickerstaff then concocted a schem e to take ownership of the house him self.4 She also alleges that defendants Charles “Benny” Hausknecht, J r., a certified public accountant, and Hausknecht’s accounting firm , Pailet, Meunier, and LeBlanc, L.L.P. participated in the schem e.5 This participation occurred despite the Pailet defendants’ representation of plaintiff in tax m atters and the “various fiduciary, legal, and ethical duties” that they allegedly owed to plaintiff. 6 Plaintiff also alleges that Richard Bickerstaff7 and the Pailet defendants filed unauthorized claim s on plaintiff’s behalf against British Petroleum after the 20 10 Deepwater Horizon rig explosion, in an attem pt to collect settlem ent proceeds for the loss of rental revenue and dim inished value of the beach house.8 Further, plaintiff contends that the Pailet defendants were involved in confecting a second m ortgage on the beach house to secure a 2 3 4 5 6 7 8 R. Doc. 1 at 3 ¶ 13. Id. ¶ 14. Id. at 3 ¶¶ 30 -31. R. Doc. 21 at 4 ¶ 53. Id. at 3 ¶¶ 50 -51. R. Doc. 1 at 7-8 ¶¶ 33-34. R. Doc. 21 at 3 ¶ 52. 2 sham loan to her brother, Richard, from his wife, defendant Carolyn Bickerstaff.9 Additionally, plaintiff alleges that the Pailet defendants prepared and filed unauthorized federal and state tax returns on her behalf relating to the transfer of the beach house.10 On August 19, 20 15, plaintiff, through her current legally appointed agent-in-fact and m andatary Gerald Gregory Bickerstaff, filed this lawsuit against Carolyn Bickerstaff and her attorneys.11 The Court dism issed plaintiff’s claim s against the attorneys for lack of personal jurisdiction on April 7, 20 16.12 On April 29, 20 16, plaintiff filed her First Supplem ental and Am ending Com plaint, which added the Pailet defendants as parties.13 Plaintiff asks the Court to rescind the Second Mortgage and award plaintiff dam ages, including pain and suffering.14 At the sam e tim e as plaintiff filed her am ended com plaint, plaintiff m oved the Court to stay the case pending the resolution of a review of plaintiff’s com plaints against Hausknecht by the State Board of Certified Public Accountants of Louisiana in accordance with Louisiana Revised 9 10 11 12 13 14 Id. at 9-10 ¶¶ 84-89. Id. at 4-6 ¶¶54-63. R. Doc. 1 at 3 ¶ 7. R. Doc. 16. R. Doc. 21. Id. at 10 -11. 3 Statutes §§ 37:10 1-124.15 As sum m arized by plaintiff, Section 37:10 5 sets forth that “any action against a certified public accountant, the firm , or the insurer, m ay not be filed in any court prior to presenting the claim s to an accountant review panel.”16 The Court stayed the case,17 reopening it after the State Board concluded its proceedings.18 The Pailet defendants now m ove the Court, pursuant to Federal Rule of Civil Procedure 12(b)(6), to dism iss plaintiff’s claim s against them because the claim s are prem ature.19 Defendants argue that Section 37:10 5 requires claim s against accountants be reviewed by the Society of Louisiana Certified Public Accountants, not the State Board of Certified Public Accountants of Louisiana, before a plaintiff m ay proceed in court. The Pailet defendants further argue that because plaintiff has not obtained a review of her claim s against them from the proper entity, Section 37:10 5 bars plaintiff’s suit.20 Plaintiff argues that Section 37:10 5 does not apply because she was not a client of Hausknecht or his firm at the tim e of the actions com plained of, and 15 16 17 18 19 20 R. Doc. 19. R. Doc. 19-2 at 2. R. Doc. 22. R. Doc. 25-3; R. Doc. 26. R. Doc. 41. R. Doc. 41-4 at 4-5. 4 because she asserts claim s of fraud, negligence, and breach of fiduciary duty, not accountant m alpractice.21 II. LEGAL STAN D ARD To survive a Rule 12(b)(6) m otion to dism iss, the plaintiff m ust plead “enough facts to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 697 (20 0 9) (quoting Bell Atl. Corp. v. Tw om bly , 550 U.S. 544, 570 (20 0 7)). A claim is facially plausible when the plaintiff pleads facts that allow the court to “draw the reasonable inference that the defendant is liable for the m isconduct alleged.” Id. at 678. A court m ust accept all well-pleaded facts as true an d m ust draw all reasonable inferences in favor of the plaintiff. See Lorm and v. US Unw ired, Inc., 565 F.3d 228, 239 (5th Cir. 20 0 9); Baker v. Putnal, 75 F.3d 190 , 196 (5th Cir. 1996). A legally sufficient com plaint m ust establish m ore than a “sheer possibility” that the plaintiff’s claim is true. Iqbal, 556 U.S. at 678. It need not contain detailed factual allegations, but it m ust go beyond labels, legal conclusions, or form ulaic recitations of the elem ents of a cause of action. Id. In other words, the face of the com plaint m ust contain enough factual m atter to raise a reasonable expectation that discovery will reveal evidence of each 21 R. Doc. 45 at 2. 5 elem ent of the plaintiff’s claim . Lorm and, 565 F.3d at 257. If there are insufficient factual allegations to raise a right to relief above the speculative level, or if it is apparent from the face of the com plaint that there is an insuperable bar to relief, the claim m ust be dism issed. Tw om bly , 550 U.S. at 555. In considering a m otion to dism iss for failure to state a claim , a court m ust typically lim it itself to the contents of the pleadings, including their attachm ents. Collins v. Morgan Stanley Dean W itter, 224 F.3d 496, 498 (5th Cir. 20 0 0 ). “If, on a m otion under 12(b)(6) . . . m atters outside the pleadings are presented to and not excluded by the court, the m otion m ust be treated as one for sum m ary judgm ent under Rule 56.” Fed. R. Civ. P. 12(d). Nevertheless, uncontested docum ents referred to in the pleadings m ay be considered by the Court without converting the m otion to one for sum m ary judgm ent even when the docum ents are not physically attached to the com plaint. See Great Plains Trust Co. v. Morgan Stanley Dean W itter & Co., 313 F.3d 30 5, 313 (5th Cir. 20 0 2). The Court m ay also consider docum ents attached to a m otion to dism iss without converting the m otion into one for sum m ary judgm ent if the docum ents are referred to in the com plaint and are central to the plaintiff’s claim . Causey v. Sew ell Cadillac– Chevrolet, Inc., 394 F.3d 285, 288 (5th Cir. 20 0 4). 6 III. D ISCU SSION Louisiana law requires a public accountant review panel to review all claim s against certified public accountants or accounting firm s. La. Stat. Ann. § 37:10 2(A) (20 16). In order to initiate the review, a claim ant m ust subm it a request to the Society of Louisiana Certified Public Accountants. See La. Stat. Ann. §§ 37:10 1, 37:10 2(B). A claim ant m ay not bring an action in court against an accountant or accounting firm before a panel has either issued an opinion or, a claim ant’s request for review has existed for m ore than twelve m onths without a panel opinion. La. Stat. Ann. § 37:10 5-10 6. The proper response to such a prem ature suit is dism issal without prejudice for failure to state a claim upon which relief m ay be granted under Federal Rule of Civil Procedure 12(b)(6). See, e.g., Barrack Children’s Irrevocable Trust v. Pailet, No. 12-0 0 784, 20 12 WL 2513682, at *1-2 (E.D. La. J une 27, 20 12) (holding that dism issal under Rule 12(b)(6) is proper when plaintiff files prem ature claim s against accountant without subm itting claim s to review panel before filing suit). Plaintiff has not received an opinion from a properly constituted review panel of the Society of Louisiana Certified Public Accountants. Although plaintiff did obtain a review of her claim s from the State Board of 7 Certified Public Accountants of Louisiana, 22 Section 10 5 of the Louisiana Accountancy Act requires review by the Society of Louisiana Certified Public Accountants, a separate entity. See La. Stat. Ann. §§ 37:10 1, 37:10 2(B). Thus, to the extent that plaintiff’s claim s against the accountant defendants are covered by the statute, they are prem ature and m ust be dism issed. Plaintiff does not dispute that La. Stat. Ann. § 37:10 5 requires that claim s against accountants arising from the engagem ent of the accountants proceed before the specified review panel before those claim s can be litigated in any other court. At issue here is whether plaintiff’s claim s arise from the engagem ent of the Pailet defendants and are therefore covered by the statute. Because the Court finds that plaintiff’s claim s are covered by the statute, the Court dism isses plaintiff’s claim s against the Pailet defendants as prem ature. Ignoring the plain text of the statute, plaintiff argues that the Louisiana Accountancy Act covers only claim s for accountant m alpractice, and only those that arise specifically from an ongoing accountant-client relationship. Because her claim s are for fraud, negligence, and breach of fiduciary duties, plaintiff argues they are not claim s for accountant m alpractice. Further, despite the plain allegations of her com plaint, plaintiff asserts in her brief 22 R. Doc. 23 at 1. 8 that she was not a client of the Pailet defendants when the com plained of actions occurred. The clear text of the statute is at odds with plaintiff’s argum ents. In Louisiana, “[l]egislation is a solem n expression of legislative will,” La. C.C. art. 2, and thus is “superior to any other source of law.” La. C.C. art. 1. cm t. (c). Therefore, “the starting place in interpreting any statute is the language of the statute itself.” Moss v. State, 925 So. 2d 1185, 1197 (La. 20 0 6). The Louisiana Accountancy Act provides that “[a]ll claim s against certified public accountants or firm s, other than claim s validly agreed for subm ission to a lawfully binding arbitration procedure, shall be reviewed by a public accountant review panel established pursuant to R.S. 37:10 9.” La. Stat. Ann. § 37:10 2 (em phasis added). “Claim ” is defined as any cause of action against a certified public accountant or firm , regardless of the legal basis of the claim , including but not lim ited to tort, fraud, breach of contract, or any other legal basis, arising out of any engagem ent to provide professional services, including but not lim ited to the following: (a) The providing of attest services as defined in R.S. 37:73(1)(a). (b) The providing of business or financial advice. (c) Advice relative to plans or actions to qualify for tax benefits or otherwise reduce the am ounts of tax owed. (d) Advice relative to the structuring of pension or retirem ent or insurance plans or other em ployee benefits. (e) The provision, including design, of com puter software for accounting or bookkeeping functions. (f) Any other advice relative to the conduct of any business whether conducted for profit or not. 9 Id. § 37:10 1 (em phasis added). Therefore, the plain language of the statute would appear to cover any and all claim s by plaintiff against the Pailet defendants as long as they arise out of “any engagem ent to provide professional services.” Id. In arguing that the statute is im plicitly lim ited to m alpractice actions related to an ongoing-client relationship, plaintiff analogizes to claim s for legal and m edical m alpractice.23 Her reliance is m isplaced. Although courts have lim ited legal and m edical m alpractice actions arising under Louisiana law to those stem m ing from a client relationship, thus far no courts have sim ilarly lim ited the scope of the Louisiana Accountancy Act. In fact, case law supports finding the scope as broad as the text im plies, without lim itations as to m alpractice or accountant-client relationship. See Adam s v. Kern, 987 So. 2d 879, 880 -81 (La. App. 5 Cir. 20 0 8) (noting that a review panel heard claim s by form er m em ber of LLC against LLC’s accountant even though plaintiff was not client of accountant); Ortego v. Hickerson, 989 So. 2d 777, 780 -81 (La. App. 3 Cir. 20 0 8) (noting that lower court had found defam ation suit against accounting firm by non-client plaintiff to be prem ature because there had been no review as required by the Louisiana Accountancy Act); Sigm a Delta, LLC v. George, No. 0 7-5427, 20 0 8 WL 23 R. Doc. 45 at 4, 11-14. 10 174480 1, at *1 (E.D. La. Apr. 11, 20 0 8) (rejecting argum ent that accountantclient relationship is necessary under Louisiana Accountancy Act and finding that “[t]he term ‘any engagem ent’ supports [defendant]’s position that the review panel requirem ent applies even when the engagem ent was not with the party who eventually files suit.”); Barrack Children’s, 20 12 WL 2513682, at *1-2 (dism issing breach of contract and negligence claim s against accountants as prem ature because plaintiffs did not first proceed before the review panel pursuant to the Louisiana Accountancy Act). Plaintiff correctly notes that the Louisiana Accountancy Act is a statute in derogation of the rights of tort victim s, and therefore “‘the coverage of the act should be strictly construed.’” Tay lor v. Ochsner Clinic Found., No. 111926, 11-2221, 20 11 WL 6140 885, at *4 (E.D. La. Dec. 9, 20 11) (quoting W illiam son v. Hosp. Serv. Dist. N o. 1, 888 So. 2d 782, 786 (La. 20 0 4). However, this canon of construction does not override the plain, unam biguous text of the statute, an d this Court will not read an im plied lim itation into an unam biguous Louisiana state law without any instruction from the Louisiana courts or legislature. Because the plain text of the Louisiana Accountancy Act covers any claim s arising from any engagem ent to provide accounting services, plaintiff’s claim s will be dism issed if they arise from the engagem ent of the Pailet defendants. 11 From a review of the factual allegations in plaintiff’s com plaint (which m ust be accepted as true if well-pleaded), it is clear that her claim s against the Pailet defendants arise from their engagem ent. Plaintiff alleges that the Pailet defendants are liable for fraud, negligence, and breach of fiduciary duties.24 Specifically, plaintiff alleges that, given her status “as a client, the Paliet [d]efendants owed the [plaintiff] various fiduciary, legal, and ethical duties, which duties included refraining from any self-dealing or activity that was contrary to the [plaintiff]’s best interests. The acts of the Pailet [d]efendants as described herein violated the fiduciary, legal, and ethical duties owed to [plaintiff] . . . causing the [plaintiff] great harm and dam ages.”25 Plaintiff plainly alleges that defendants “fiduciary, legal, and ethical” duties to her arose from their representation of her as accountants and the conduct com plained of violated those duties.26 Plaintiff cannot im peach the allegations of her own com plaint, which m ust be accepted as true, by attaching an affidavit to her response in opposition to this m otion 24 R. Doc. 21 at 3 ¶ 48. Id. ¶¶ 50 -51. 26 To the extent that any of plaintiff’s claim s arise out of the second m ortgage on the property at issue, these claim s arise out of the engagem ent of the Pailet defendants by defendant Carolyn Bickerstaff. See id. at 9 ¶¶ 87, 88. Thus, the Pailet defendants’ role as accountants would be a com ponent of the alleged wrongdoing and the claim would also require review by the Society before it could be filed in any court. See In re Easterly Const. Co., Inc., 40 8 B.R. 627, 631 (Bankr. M.D. La. 20 0 9). 12 25 attesting that she was not a client of the Pailet defendants because the Court’s review is lim ited at this stage to the content of the pleadings. See Collins, 224 F.3d at 498. Because plaintiff brings claim s against a certified public accountan t and his firm that arise out of an engagem ent to provide professional services, by law her claim s m ust be brought before the Society of Louisiana Certified Public Accountants before they can be filed in any court. Because plaintiff failed to do, her claim s against the Pailet defendants m ust be dism issed. IV. CON CLU SION For the foregoing reasons, the Court GRANTS defendants’ m otion to dism iss and dism isses plaintiff’s claim s against the Pailet defendants WITHOUT PREJ UDICE. 28th New Orleans, Louisiana, this _ _ _ day of Decem ber, 20 16. ___________________________________ SARAH S. VANCE UNITED STATES DISTRICT J UDGE 13
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