United States District Court, S.D. Texas, Houston Division
MEMORANDUM AND ORDER
Rosenthal Chief United States District Judge
Property and Casualty Insurance Company sued Charlene Davis
and Robbin Holder, seeking a declaratory judgment that it has
no duty under the homeowner's insurance policy it issued
Davis to defend or indemnify her in an underlying state-court
lawsuit Holder filed against Davis in the 234th Judicial
District Court of Harris County, Texas. (Docket Entry No. 1).
In federal this suit, Davis asserted counterclaims against
United Property, seeking a declaratory judgment that United
Property must defend and indemnify her in the underlying
lawsuit and alleging breach of contract, breach of the duty
of good faith and fair dealing, and violations of the Texas
Insurance Code and the Texas Deceptive Trade Practices Act.
(Docket Entry No. 11). United Property has moved for judgment
on the pleadings as to Davis's counterclaims under
Federal Rule of Civil Procedure 12(c). (Docket Entry No. 29).
Davis has not responded, and the motion is ripe.
careful review of the pleadings, the motion, and the
applicable law, the court grants in part and denies in part
the motion for judgment on the pleadings. (Docket Entry No.
29). The court dismisses Davis's contract-breach
counterclaim based on United Property's alleged failure
to indemnify, without prejudice, because the duty to
indemnify has not arisen. The court grants United
Property's motion for judgment on the pleadings on
Davis's counterclaims under the federal Declaratory
Judgment Act, the Texas Insurance Code, and the Texas
Deceptive Trade Practices Act, and dismisses those
counterclaims, with leave to amend only the Texas Insurance
Code and Texas Deceptive Trade Practices Act claims. The
court dismisses Davis's Texas Declaratory Judgments Act
claim, with prejudice and without leave to amend, because
amendment would be futile. The court denies United
Property's motion for judgment on the pleadings as to
Davis's contract-breach counterclaim based on United
Property's alleged failure to defend Davis. Davis must
amend consistent with these rulings no later than
September 27, 2019.
reasons are set out in detail below.
Property issued Davis a homeowner's insurance policy for
her LaPorte, Texas residence. (Docket Entry No. 1 at ¶
3.5; Docket Entry No. 1-2; Docket Entry No. 11 at ¶ 10).
The policy period ran from September 28, 2016, to September
28, 2017. (Docket Entry No. 1 at ¶ 3.5; Docket Entry No.
11 at ¶ 10). In 2016, Doug Longron lived with Davis on
the insured property. (Docket Entry No. 11 at ¶ 9). On
October 13, 2016, Robbin Holder's vehicle was on the
property for Longron to repair. (See Id. at ¶
30). According to Davis, Holder arrived for her car and
refused to leave, leading to a physical fight between Davis
and Holder. (Id. at ¶ 31). Holder alleged in
the underlying litigation that, while she was on the
property, Davis hit her with the butt of a handgun, which
discharged. The bullet hit Holder. (Id. at ¶
33). Davis alleged self-defense. (Id. at
¶¶ 32, 36-38).
policy covered personal injury or property damage arising
from an “occurrence” on her property. (Docket
Entry No. 1 at ¶ 3.6; Docket Entry No. 11 at ¶ 11).
If an “occurrence” caused personal injury or
property damage, United Property was obligated to:
1. Pay up to our limit of liability for the damages for which
an “insured” is legally liable. Damages include
prejudgment interest awarded against an
2. Provide a defense at our expense by counsel of our choice,
even if the suit is groundless, false or fraudulent. We may
investigate and settle any claim or suit that we decide is
appropriate. Our duty to settle or defend ends when our limit
of liability for the “occurrence” has been
exhausted by payment of a judgment or settlement.
(Docket Entry No. 1-2 at 23). The policy excluded personal
liability coverage, but it did not extend to
“‘bodily injury' or ‘property
damage' which is expected or intended by an
‘insured[, '] even if the resulting ‘bodily
injury' or ‘property damage'” was
“of a different kind, quality, or degree than initially
expected or intended” or “a different person,
entity, or property than initially expected or
intended” sustained the damage. (Id. at 25).
The policy also excluded coverage for losses from injuries
resulting from a business on the covered property, and for
damages for physical or mental abuse. (Id.).
Property alleges that the homeowner's policy does not
cover the injuries or losses arising from the September 2016
incident because, while the policy covers damages from
accidents resulting in bodily injury, it does not cover
“expected or intended” bodily injury by the
policyholder. (Id. at ¶¶ 4.2, 4.3).
According to United Property, Davis's actions were not
accidental, excluding coverage. United Property also alleges
that because “Longron, a person living on the insured
premises, had been operating an automobile repair shop out of
the insured premises, ” the policy excludes coverage
for the claimed losses, including the costs of defending and
indemnifying Davis in the state-court case. (Id. at
¶ 4.4). United Property alleges that the policy's
exclusion of bodily injury arising from “physical or
mental abuse” also applies because “Davis
assaulted Holder.” (Id. at ¶ 4.5). United
Property seeks a declaratory judgment that it has no duty to
defend or indemnify Davis in the underlying lawsuit.
(Id. at ¶ 3.1).
first amended answer included counterclaims for breach of
contract, bad faith, and violations of the Texas Insurance
Code and the Texas Deceptive Trade Practices Act and seeking
damages and a declaratory judgment under the Texas
Declaratory Judgments Act and the federal Declaratory
Judgment Act. (Docket Entry No. 11 at ¶¶ 47-86).
She alleged that the policy covered her use of force against
Holder because “[t]he use of reasonable force in
defense of persons or property is specifically excepted from
the policy exclusion.” (Id. at ¶ 40
The Legal Standard
motion brought pursuant to Federal Rule of Civil Procedure
12(c) is designed to dispose of cases where the material
facts are not in dispute and a judgment on the merits can be
rendered by looking to the substance of the pleadings and any
judicially noticed facts.” Great Plains Tr. Co. v.
Morgan Stanley Dean Witter & Co., 313 F.3d 305, 312
(5th Cir. 2002). The Rule 12(c) standard for judgment on the
pleadings is the same as the standard under Rule 12(b)(6).
Gentilello v. Rege, 627 F.3d 540, 543-44 (5th Cir.
12(b)(6) requires dismissal if a plaintiff fails “to
state a claim upon which relief can be granted.”
Fed.R.Civ.P. 12(b)(6). Rule 12(b)(6) must be read in
conjunction with Rule 8's requirement of a “short
and plain statement of the claim showing that the pleader is
entitled to relief.” Fed. R. Civ. P.8(a)(2). A
complaint must contain “only enough facts to state a
claim to relief that is plausible on its face.”
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570
(2007). Rule 8 “does not require ‘detailed
factual allegations,' but it demands more than an
accusation.” Ashcroft v. Iqbal, 556 U.S. 662,
678 (2009) (quoting Twombly, 550 U.S. at 555).
“A claim has facial plausibility when the plaintiff
pleads factual content that allows the court to draw the
reasonable inference that the defendant is liable for the
misconduct alleged.” Id. (citing
Twombly, 550 U.S. at 556). “The plausibility
standard is not akin to a ‘probability
requirement,' but it asks for more than a sheer
possibility that a defendant has acted unlawfully.”
Id. (citing Twombly, 550 U.S. at 556).
withstand a Rule 12(b)(6) motion, a “complaint must
allege ‘more than labels and conclusions, '”
and “a formulaic recitation of the elements of a cause
of action will not do.” Norris v. Hearst Tr.,
500 F.3d 454, 464 (5th Cir. 2007) (quoting Twombly,
550 U.S. at 555). “Nor does a complaint suffice if it
tenders ‘naked assertion[s]' devoid of
‘further factual enhancement.'”
Iqbal, 556 U.S. at 678 (alteration in original)
(quoting Twombly, 550 U.S. at 557). “[A]
complaint ‘does not need detailed factual
allegations,' but must provide the plaintiff's
grounds for entitlement to relief-including factual
allegations that when assumed to be true ‘raise a right
to relief above the speculative level.'”
Cuvillier v. Taylor, 503 F.3d 397, 401 (5th Cir.
2007) (quoting Twombly, 550 U.S. at 555).
“Conversely, when the allegations in a complaint,
however true, could not raise a claim of entitlement to
relief, this basic deficiency should be exposed at the point
of minimum expenditure of time and money by the parties and
the court.” Id. (quotation marks and
considering a motion to dismiss under Rule 12(b)(6), “a
district court must limit itself to the contents of the
pleadings, including attachments.” Collins v.
Morgan Stanley Dean Witter, 224 F.3d 496, 498 (5th Cir.
2000). Documents “attache[d] to a motion to dismiss are
considered part of the pleadings, if they are referred to in
the plaintiff's complaint and are central to [the]
claim.” Id. at 498-99 (quoting Venture
Assocs. Corp. v. Zenith Data Sys. Corp., 987 F.2d 429,
431 (7th Cir. 1993)). The court may also “take judicial
notice of matters of public record.” Norris,
500 F.3d at 461 n.9.
plaintiff's complaint fails to state a claim, the court
should generally give the plaintiff a chance to amend under
Rule 15(a) before dismissing the action with prejudice,
unless it is clear that to do so would be futile. See
Carroll v. Fort James Corp., 470 F.3d 1171, 1175 (5th
Cir. 2006) (“[Rule 15(a)] evinces a bias in favor of
granting leave to amend.” (quotation omitted));
Great Plains Tr. Co. v. Morgan Stanley Dean Witter &
Co., 313 F.3d 305, 329 (5th Cir. 2002)
(“[D]istrict courts often afford plaintiffs at least
one opportunity to cure pleading deficiencies before
dismissing a case, unless it is clear that the defects are
incurable or the plaintiffs advise the court that they are
unwilling or unable to amend in a manner that will avoid
dismissal.”). A court may deny a motion to amend as
futile if an amended complaint would fail to state a claim