United States Fire Insurance Company et al v. Parish, Jr. et al, No. 4:2021cv03715 - Document 21 (S.D. Tex. 2022)
Court Description: MEMORANDUM OPINION AND ORDER - For reasons explained, the court concludes that Parish has not stated a plausible claim to an accounting. Accordingly, Plaintiffs/Counter-Defendants' 17 Partial MOTION to Dismiss Defendants/Counter-Plaintiffs Amended Counterclaim is GRANTED. (Signed by Judge Sim Lake) Parties notified.(sanderson, 4)
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United States Fire Insurance Company et al v. Parish, Jr. et al Doc. 21 Case 4:21-cv-03715 Document 21 Filed on 06/28/22 in TXSD Page 1 of 7 United States District Court Southern District of Texas ENTERED IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION UNITED STATES FIRE INSURANCE COMPANY and THE NORTH RIVER INSURANCE COMPANY, June 28, 2022 Nathan Ochsner, Clerk § § § § Plaintiffs, § § CIVIL ACTION NO. H-21-3715 § V. § CYRIL ELMO PARISH, JR. and C.E. PARISH GENERAL AGENCY, INC. § § § I § Defendants. § MEMORANDUM OPINION and ORDER Pending before the court is Plaintiffs / Counter-Defendants' Partial Motion to Dismiss Defendants / Counter-Plaintiffs' Amended Counterclaim ("Plaintiffs' Motion") (Docket Entry No. 17) filed by United States Fire Insurance Company and The North River Insurance Company. For reasons explained below, Plaintiffs' Motion will be granted. I. Factual Background On October 26, 2006, plaintiffs United States Fire Insurance Company ("US (collectiv ely, Fire") and The North Ri v er Insurance Company "Plaintiffs") entered into a Producer Underwriting Agreement and three subsequent addendums (the "Agreement") with defendants Cy ril Elmo Parish, Jr. and C.E. Parish General Agency, Dockets.Justia.com Case 4:21-cv-03715 Document 21 Filed on 06/28/22 in TXSD Page 2 of 7 Inc. (collectively , Agreement, "Parish") 1 Pursuant to the terms Parish operated as a bail bond producer, functioned as a surety for the bonds. 2 of the and US Fire On November 12, 2021, Plai ntiffs filed this action against Defendants alleging claims for breach of contract, breach of fiduciary duty, indemnification, and attorneys' fees. 3 On December 29, Parish 2021, filed Defendants' Answer to Plai ntiffs' Original Complaint (Docket Entry No. 8) and Defendants' Counterclaim equitable January ("Counterclaim") accounting 20, 2022, US and Fire (Docket Entry No. attorney s' filed a fees 9) , from Partial US Motion which seeks Fire. 4 On to Dismiss, request i ng the court dismiss Parish's Counterclaim for failure to state a claim. 5 Counterclaim. 6 On February 9, 2022, Parish amended its The Fi rst Amended Counterclaim alleges that Parish is entitled to an accounting because the Original Complaint is "a 1 Agreement, Ex hibit C to Plaintiff's Original Complaint ("Original Complaint"), Docket Entry No. 1-1, p. 5 . For purposes of identification all page numbers reference the pagination imprinted at the top of the page by the court's Electronic Case Filing ("ECF") system. 2 Id. at 1 11 1 -2. 3 Original Complaint, Docket Entry No. 1, pp. 4 Counterclaim, Docket Entry No. 9, p. 3 11 9-14 11 25-46. 8-9. 5 Plaintiffs / Counter-Defendants United States Fire Insurance Company and The North Ri v er Insurance Company 's Partial Motion to Dismiss ( "First Motion to Dismiss") , Docket Entry No. 10, p. 2 1 6. 6 Defendants' First Amended Counterclaim claim"), Docket Entry No. 11. -2- ( "Amended Counter- Case 4:21-cv-03715 Document 21 Filed on 06/28/22 in TXSD Page 3 of 7 one- sided endeavor to interpret the Agreement, with no account detail as to how [Plaintiffs] arrived at the dollar amounts alleged to be owed in the Complaint." 7 On February 15, 2022, the court denied the First Motion to Dismiss because the Amended Counterclaim made the motion moot. 8 Plaintiffs filed the pending motion on February 22, 2022. 9 filed a response on March 15, 2022. 10 Parish Plaintiffs filed a reply on March 22, 2022. 11 II. Standard of Review Federal Rule of Civil Procedure 12(b) (6) permits a party to move that the court dismiss a complaint for "failure to state a claim upon which relief can be granted." To survive a Rule 12(b) (6) motion, a plaintiff's" [f]actual allegations must be enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact)." S. Ct. 1955, 1965 ~ (2 007) Bell Atlantic Corp. v. Twombly, 127 (internal quotations 7 Id. at 2 8 Order, Docket Entry No. 14. 9 Plaintiffs' Motion, Docket Entry No. 17, p. 3 and citations 6. 10 Response to Second Partial Response"), Docket Entry No. 18. 11 Motion to ~ Dismiss 7. ("Parish's Plaintiffs/Counter-Defendants' Reply to Defendants/CounterPlaintiff s' Response to Second Mot ion to Dismiss, Docket Entry No. 19. -3- Case 4:21-cv-03715 Document 21 Filed on 06/28/22 in TXSD Page 4 of 7 omitted) . "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Ashcroft v . Iqbal, 129 S. Ct. 1937, 1949 (2009). Courts deciding on Rule 12(b) (6) motions may consider "documents incorporated into the complaint by reference, and matters of which a court may take judicial notice." Tellabs, Inc. v. Makor Issues & Rights, Ltd., 127 S. Ct. 2499, 2509 (2007) III. Analysis Plaintiffs argue that Parish's Amended Counterclaim "fails to adequately plead a "fails to allege claim for or provide equitable any accounting" factual basis because that it has it a contractual or fiduciary relationship with US Fire entitling them to an accounting[,]" and "fails to allege how the information it is seeking is so complex that it cannot be determined through normal discovery procedures." 12 "To be entitled to an accounting, a plaintiff must have either a contractual or fiduciary relationship with the party from whom a plaintiff seeks an accounting." Davis v. Seterus, Inc . , Cause No. SA-17-CV-233-OLG, 2017 WL 10841350, at *2 (W.D. Tex. April 26, 2017) (citing T.F.W. Management, Inc. v . Westwood Shores Property Owners Association, 79 S.W.3d 712, 717 Dist.] 2002, pet. denied)). has fiduciary or contractual dut y a 12 (Tex. App. - Houston [14th Parish fails to allege that US Fire to provide an accounting. Plaintiffs' Motion, Docket Entry No. 17, p. 4 - 4- 1 10. Case 4:21-cv-03715 Document 21 Filed on 06/28/22 in TXSD Page 5 of 7 Plaintiff states in its Original Complaint that it is not a fiduciary to Parish, 13 and nothing in the Agreements suggests that US Fire has a duty to provide a full accounting to Parish. 14 Parish does not allege that Plaintiffs have a contractual duty to provide an accounting. Parish's sole argument that Plaintiffs have a duty to provide an accounting is that Plaintiffs brought a claim for breach of fiduciary duty, and "the first element of a breach of fiduciary duty claim is that a fiduciary relationsh ip exists between the parties." 15 Parish appears to argue that if it owed a fiduciary duty to Plaintiffs, then Plaintiffs must have owed a fiduciary duty to it in return. support for this contention. But Parish cites no legal A party can owe a fiduciary duty to another party without the other party owing a fiduciary duty in return. See, e.g., Houston [14th Dist.] law in the Lee v. Hasson, 2007) attorney-client 286 S.W.3d 1, 14 (Tex. App.- (fiduciary duty arises as a matter of rel ationship) ; Johnson v. Pritchard, P.C., 73 S.W.3d 193, 199 (Tex. 2002) Brewer & (a trustee owes a fiduciary duty to a beneficiary of the trust, an executor owes a See Original Complaint, Docket Entry No. 1, p. 5 1 13 ( "The Parish Defendants were an independent contractor of US FIRE. The Parish Defendants owe fiduciary duties to US FIRE in relation to the conduct of their business; however, US FIRE is not the fiduciary of the Parish Defendants."). 13 14 Agreement, No. 1-1. Exhibit C to Original Complaint, 15 Docket Entry Parish's Response, Docket Entry No. 18, pp. 1 -2 (citing Bos v . Smith, 556 S.W.3d 293, 303 (Tex. 2018 )). -5- Case 4:21-cv-03715 Document 21 Filed on 06/28/22 in TXSD Page 6 of 7 fiduciary dut y to the beneficiaries of an estate, an attorney owes a fiduciary duty to a client). has a fiduciary or Parish has not shown that US Fire contractual dut y to provide it with an accounting. Moreov er, Parish has not pled facts sufficient to show that the information it seeks could not be obtained through discov ery. Courts find that an "[a]ccounting is appropriate when 'the facts and accounts presented are so complex [that] not be obtained at law.'" adequate relief may Williams v . Wells Fargo Bank, N.A., 560 F. App' x 2 33, 243 (5th Cir. 2014) (quoting T.F.W . Management, Inc. v. Westwood Shores Property Owners Association, 79 S.W.3d 712, 717 (Tex. App. - Houston [14th Dist.] 2002, pet. denied)). "But '[w]hen a party can obtain adequate relief at law through the use of standard discovery procedures, such as requests for production and interrogatories, a trial court does not err in not ordering an accounting.'" Watson v. Citimortgage, Inc . , 814 F. Supp. 2d 726 , 738 (E.D. Tex. 2011) (quoting T . F.W . Management, Inc., 79 S.W.3d at 717-18). Parish argues that the facts are complex because this case inv olv es "hundreds if not thousands of multiple types of account transact i ons without [Parish's] and payments made directly [Plaintiffs] knowledge , as well as negotiations with state and / or county authorities and subagents . 16 to 11 16 Tak en as true, Parish's Response, Docket Entry No. 18, pp. 2-3 -6 - ~ 3. Case 4:21-cv-03715 Document 21 Filed on 06/28/22 in TXSD Page 7 of 7 these assertions still do not explain why Parish cannot obtain the information it needs through "the use of standard discovery procedures, such as requests for production and interrogatories," and therefore the court will not order an accounting. See Watson, 814 F. Supp. 2d at 738. IV. Conclusion and Order For reasons explained above, the court concludes that Parish has not stated a plausible claim to an accounting. Accordingly, Plaintiffs/Counter-Defendants' Partial Motion to Dismiss Defendants/ Counter-Plaintiffs' Amended Counterclaim (Docket Entry No. 17) is GRANTED. SIGNED at Houston, Texas, on this the 28th day of June, 2022. SIM LAKE SENIOR UNITED STATES DISTRICT JUDGE -7-
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