Mitsui Sumitomo Ins. Co.

Full title: MITSUI SUMITOMO INSURANCE, COMPANY (H.K.) LTD. v. P O PORTS LOUISIANA…

Court: United States District Court, E.D. Louisiana

Date published: Aug 28, 2007

CIVIL ACTION, No. 07-1538, SECTION: I/4 (E.D. La. Aug. 28, 2007)

Opinion

CIVIL ACTION, No. 07-1538, SECTION: I/4.

August 28, 2007

ORDER AND REASONS

LANCE AFRICK, Magistrate Judge

Before the Court is a motion to dismiss filed by defendant, Biehl Co., L.P., ("Biehl") pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. ¹ Defendant contends that plaintiff fails to state a claim upon which relief can be granted. For the following reasons, defendant's motion is DENIED.

1 Rec. Doc. No. 8.

BACKGROUND

Plaintiff, Mitsui Sumitomo Insurance Company (H.K.) Ltd. ("MSI"), is the subrogated insurer of Asia Minerals, Ltd., ("Asia Minerals"), an owner of cargo shipped aboard the M/V MATHAWEE NAREE.² MSI's complaint alleges that defendant, Biehl, contracted with Asia Minerals to discharge certain cargo into barges in order for the cargo to be carried upriver.³ MSI alleges that Biehl hired defendant, P O Ports of Louisiana, Inc. ("P O"), who is not a party to this motion to dismiss, to carry out the contract between Biehl and Asia Minerals, i.e., to discharge the cargo into barges.⁴

P O allegedly discharged Asia Minerals' cargo on or about January 21, 2006, during which the separate commodities being discharged were commingled.⁵ MSI alleges that Asia Minerals was a third-party beneficiary of the contract between Biehl and P O and that the breach of that contract subjected the cargo to damage.⁶ Further, MSI alleges that Biehl breached its obligations under its contract with Asia Minerals, thereby causing damage to the cargo.⁷

5 Id. para. 7.

6 Id. paras. 8-9.

7 Id.

MSI, as subrogated insurer for Asia Minerals, allegedly was presented with a claim from Asia Minerals for the damaged cargo; this claim was paid pursuant to the terms of the insurance policy.⁸ MSI alleges that because of its relationship with Asia Minerals, it is legally and contractually subrogated to the rights of Asia Minerals and that it suffered losses as detailed in the complaint.⁹

8 Id. para. 10.

9 Id. paras. 10-12. MSI alleges that its losses total $1,012,706.80. Id. para. 12.

On April 4, 2007, MSI filed its complaint in this Court, asserting breach of contract and tort claims under maritime and Louisiana law.¹⁰ MSI's complaint prays for monetary damages, as well as for interest, costs, and disbursements.¹¹

10 Id at pp. 1-6. With respect to defendant Biehl, MSI does not allege tort claims, but rather only a breach of contract claim.

11 Id para. 17.

Pursuant to Rule 12(b)(6), Biehl seeks to dismiss MSI's claims against it. Biehl contends that because (1) it was acting only as an agent for a disclosed principal in arranging the discharge, (2) it did not negotiate or enter into any contract with MSI, (3) MSI is unable to show any breach of contact by it, and (4) MSI acknowledges that defendant, P O, was the party causing actual damage to the cargo, MSI has failed to state a claim upon which relief may be granted.¹² MSI opposes the motion to dismiss¹³ and, further, alleges that Biehl's motion is actually a motion for summary judgment because Biehl "relies on documents attached to it's [sic] memorandum in support of its motion, and refers to documents which were not attached."¹⁴

12 Rec. Doc. No. 8.

13 Rec. Doc. No. 19.

14 Id. at pp. 1-2.

LAW AND ANALYSIS

I. Standards of Law A. Dismissal for Failure To State a Claim

A district court cannot dismiss a complaint, or any part of it, for failure to state a claim upon which relief can be granted unless the plaintiff has not set forth a factual allegation in support of his claim that would entitle him to relief. Bell Atl. Corp. v. Twombly, 127 S. Ct. 1955, 1964-65, 167 L. Ed. 2d 929 (2007) ("Factual allegations must be enough to raise a right to relief above the speculative level on the assumption that all allegations in the complaint are true (even if doubtful in fact)" (citations and footnote omitted)); Conley v. Gibson, 355 U.S. 41, 45-46, 78 S. Ct. 99, 101-02, 2 L. Ed. 2d 80 (1957); Blackburn v. Marshall, 42 F.3d 925, 931 (5th Cir. 1995). This Court will not look beyond the factual allegations in the pleadings to determine whether relief should be granted. See Spivey v. Robertson, 197 F.3d 772, 774 (5th Cir. 1999); Baker v. Putnal, 75 F.3d 190, 196 (5th Cir. 1996). In assessing the complaint, a court must accept all well-pleaded facts in the complaint as true and liberally construe all factual allegations in the light most favorable to the plaintiff. Spivey, 197 F.3d at 774; Lowrey v. Tex. A M Univ. Sys., 117 F.3d 242, 247 (5th Cir. 1997).

"However, `[i]n order to avoid dismissal for failure to state a claim, a plaintiff must plead specific facts, not mere conclusory allegations. . . .'" Guidry v. Bank of LaPlace, 954 F.2d 278, 281 (5th Cir. 1992) (quoting Elliott v. Foufas, 867 F.2d 877, 881 (5th Cir. 1989)). "`[C]onclusory allegations and unwarranted deductions of fact are not admitted as true' by a motion to dismiss." Id. (quoting Associated Builders, Inc. v. Ala. Power Co., 505 F.2d 97, 100 (5th Cir. 1974)). "`[T]he complaint must contain either direct allegations on every material point necessary to sustain a recovery . . . or contain allegations from which an inference fairly may be drawn that evidence on these material points will be introduced at trial.'" Campbell v. City of San Antonio, 43 F.3d 973, 975 (5th Cir. 1995) (quoting 5 Charles Alan Wright Arthur R. Miller, Federal Practice and Procedure § 1216, at 156-59 (3d ed. 2004)).

B. Converting a Motion To Dismiss into a Motion for Summary Judgment

Pursuant to Rule 12(b)(6), a party may seek to convert a motion to dismiss into a motion for summary judgment. Simmang v. Tex. Bd. of Law Examiners, 346 F. Supp. 2d 874, 890 (W.D. Tex. 2004). A court has complete discretion pursuant to Rule 12(b)(6) whether to accept and consider any material beyond the pleadings. Isquith v. Middle S. Utils., Inc., 847 F.2d 186, 194 n. 3 (5th Cir. 1988); 2 James Wm. Moore, Moore's Federal Practice § 12.34, at 12-72 (3d ed. 2002). Further, "[t]he mere fact that the defendants included such [extrinsic] matters in their memoranda to the court in support of their motion does not mean that the court in fact considered this material in any way when making its decision." Reid v. Hughes, 578 F.2d 634, 636 n. 2 (5th Cir. 1978). However, if the court decides to accept and consider these materials, the motion will be treated as one for summary judgment pursuant to the standard of Rule 56 of the Federal Rules of Civil Procedure. See Fernandez-Montes v. Allied Pilots Ass'n, 987 F.2d 278, 283 n. 7 (5th Cir. 1993).

A court may choose, in its discretion, not to convert a motion to dismiss into a summary judgment motion when there has been insufficient time for discovery. Isquith, 847 F.2d at 194 n. 3 ("`When the extra-pleading material is comprehensive and will enable a rational determination of a summary judgment motion, the court is likely to accept it, when it is scanty, incomplete, or inconclusive, the court probably will reject it.'" (citations omitted)); Elizondo v. Univ. of Tex., No. CIVASA-04-CA-1025-XR, 2005 WL 823353, at *7 (W.D. Tex. Apr. 7, 2005) (denying a request to treat a Rule 12(b)(6) motion as a motion for summary judgment when only limited discovery had occurred); see 5 Million Square Feet Cos. v. Crum Forster, Civil Action No. H-06-3956, 2007 WL 1964523, at *1 n. 7 (S.D. Tex. July 3, 2007) (noting that although an affidavit was submitted with a motion to dismiss, there had "been insufficient time for discovery . . . and summary judgment [was] not appropriate" at that time). At an early point in the litigation, converting a motion to dismiss into a motion for summary judgment may be inappropriate and likely to lead to continuances and delays pursuant to Federal Rule of Civil Procedure 56(f). Fed.R.Civ.P. 56(f) (stating that a court may allow a continuance in order for a party to adequately oppose a motion for summary judgment); see Wichita Falls Assocs. v. Banc One Corp., 978 F.2d 915, 919 n. 4 (5th Cir. 1992) (stating that a "`continuance of a motion for summary judgment for purposes of discovery should be granted almost as a matter of course'" (quoting Int'l Shortstop, Inc. v. Rally's, Inc., 939 F.2d 1257, 1267 (5th Cir. 1991))). Accordingly, converting a Rule 12(b)(6) motion into a Rule 56 motion, depending on the availability of outside materials and the amount of discovery already completed, may be inappropriate and inefficient.

At this stage of the proceedings, there has been no discovery. In fact, Biehl has not answered the complaint and it has only filed this motion to dismiss. Although Biehl relied on allegations not in the complaint in its motion to dismiss, and MSI, in turn, submitted documents outside of the pleadings, this Court has discretion to decide whether to accept and consider that material. Due to the early nature of this motion to dismiss, this Court declines the opportunity to convert this motion to dismiss into a motion for summary judgment. Having reviewed the memoranda of counsel, the Court deems it inappropriate to dismiss this case based on the pleadings, as the record must be developed and matters outside the pleadings considered prior to this Court determining whether dismissal is appropriate.

Accordingly, IT IS ORDERED that defendant's motion to dismiss pursuant to Rule 12(b)(6) is DENIED.