Case: 20-60783 Document: 00515750005 Page: 1 Date Filed: 02/19/2021
United States Court of Appeals
for the Fifth Circuit United States Court of Appeals
Fifth Circuit
FILED
February 19, 2021
No. 20-60783
Lyle W. Cayce
Summary Calendar Clerk
Ethan Hoggatt; Eric Hoggatt, DDS; Plaintiffs 3-29,
Allstate Insureds sold similar bogus “Dummy”
insurance policies,
Plaintiffs—Appellants,
versus
Allstate Insurance, By its agent, Andy Dyson; Andy Dyson,
Individually and in any corporate capacity; Mrs. Hand, Tupelo Allstate
Employee,
Defendants—Appellees.
Appeal from the United States District Court
for the Northern District of Mississippi
USDC No. 1:19-CV-14
Before Wiener, Southwick, and Duncan, Circuit Judges.
Per Curiam:*
*
Pursuant to 5th Circuit Rule 47.5, the court has determined that this
opinion should not be published and is not precedent except under the limited
circumstances set forth in 5th Circuit Rule 47.5.4.
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No. 20-60783
Ethan Hoggatt was involved in a car wreck while driving his parent’s
vehicle. After a dispute over insurance coverage arose, Ethan and his father,
Eric Hoggatt, sued Allstate Insurance Company, the agency through which
the family purchased its Allstate insurance, and certain individuals at that
agency. The Hoggatts are represented by Victoria Hoggatt, Eric’s wife and
Ethan’s mother. This suit is very much a family affair. The district court
denied the Hoggatts’ motion to amend their complaint and dismissed the
lawsuit for failure to state a claim. The court also imposed financial penalties
on the Hoggatts. We AFFIRM.
The defendants move in this court for additional financial penalties
against the plaintiffs. That motion is DENIED.
FACTUAL AND PROCEDURAL BACKGROUND
In December 2018, the Hoggatts filed suit in state court in Monroe
County, Mississippi, against Allstate, the Dyson Agency, certain individuals,
as well as others now dismissed from the suit. The defendants timely
removed the suit to the United States District Court for the Northern
District of Mississippi based on federal-question jurisdiction. See 28 U.S.C.
§ 1441(c).
Our understanding of the complaint is that it claims that Ethan
Hoggatt, the adult son of Eric and Victoria Hoggatt, was involved in an auto
accident with his own vehicle in March 2018. He telephoned the Dyson
Agency to change his Allstate policy, seeking to remove his now-totaled
vehicle and to cover him only as a driver. The Hoggatts claim a Dyson
employee told Ethan that he could not cancel his existing policy but that the
premium would be lowered. Unfortunately, in September of the same year,
Ethan while driving his parent’s car was involved in another wreck. Ethan,
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though, was not shown as an authorized driver on that vehicle’s policy, and
his own Allstate coverage did not cover him as a driver in a non-owned car.
This lawsuit followed, which includes such claims as fraud, violations
of the Racketeer Influenced and Corrupt Organizations (“RICO”) Act, and
other claims. In time, the district court imposed monetary penalties on the
Hoggatts for failure to use the formal discovery process and for vexatious
behavior. The district court denied the Hoggatts’ motion to amend their
complaint and granted the defendants’ motion to dismiss for failure to state
a claim. The Hoggatts appealed.
DISCUSSION
We review three district court rulings: (1) the dismissal order, (2) the
denial of the motion to amend, and (3) the sanctions order. There may be
other issues, but the Hoggatts have not adequately explained them in their
briefing.
I. Motion to dismiss
The district court determined that the magistrate judge properly
dismissed all claims in the complaint. We give de novo review to an order
dismissing a suit pursuant to Rule 12(b)(6). Harris Cnty. Tex. v. MERSCORP
Inc., 791 F.3d 545, 551 (5th Cir. 2015). In our review, all well-pled facts are
accepted as true, and we consider “those facts in the light most favorable to
the plaintiff.” Id. (quoting Toy v. Holder, 714 F.3d 881, 883 (5th Cir.2013)).
As to fraud, the district court concluded that the allegations did not
support that anyone with the insurance agency “made any representation
that [Ethan’s] new policy would cover collision damage to a non-owned
vehicle” and instead it was clear the policy covered only Ethan’s now-totaled
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vehicle. We find nothing in the complaint to the contrary. Dismissal was
appropriate.
As to the RICO claim, the district court concluded that the complaint
failed to plead a RICO enterprise, which is an “essential element.” Bonner
v. Henderson, 147 F.3d 457, 459 (5th Cir. 1998). The Hoggatts offer no
meaningful response. We agree with the dismissal.
The district court then generally addressed the remaining claims that
may have been part of the complaint. There was no error in the district
court’s granting of the motion to dismiss for failure to state a claim on
possible remaining theories, as the allegations were not adequate to present
other theories of liability.
II. Motion to amend
The district court described the Hoggatts’ desired amendment to the
complaint as one that would “add defense counsel as parties to this suit in
what appears to be retaliation for their refusal to produce documents outside
of discovery and rebukes counsel for filing ‘fraudulent and dilatory motions
to dismiss.’” The district court denied leave to amend, concluding the
amendment would be futile.
In their motion, the Hoggatts cited Mississippi’s version of Federal
Rule of Civil Procedure 15(d). We will accept this as a minor citation error
and analyze the motion under the equivalent federal rule, which allows
supplementing a complaint with claims that arose after the original
complaint’s filing. Fed. R. Civ. P. 15(d). “We review the district court’s
denial of leave to file a supplemental complaint for abuse of discretion.”
Burns v. Exxon Corp., 158 F.3d 336, 343 (5th Cir. 1998). When a district court
denies a motion to amend based only on futility, though, we review de novo.
Thomas v. Chevron U.S.A., Inc., 832 F.3d 586, 590 (5th Cir. 2016). As one
panel notes, the standard of review for denials based on futility under Rule
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15(a) and 15(d) may be different. Connor v. Castro, 719 F. App’x 376, 380 n.1
(5th Cir. 2018). The Hoggatts argue here for de novo review. Without
deciding the appropriate standard, we find that the district court’s decision
was proper even under a de novo review of the denial.
The district court came to two conclusions: (1) “to the extent [the
Hoggatts] seek to amend the complaint to add defense counsel as parties, the
Magistrate Judge’s decision is affirmed”; and (2) “the host of ‘new’ claims
referenced in the proposed amended complaint . . . appear repetitious or
directly related to the discovery dispute.”
In their reply brief, the Hoggatts argue that the attorneys representing
Allstate are “appropriate Negligence per Se defendants.” What we see in
the offered amendments is a description of attorney efforts to represent their
clients, utilizing the available procedural tools. Amendment would have been
futile.
III. Sanctions
The magistrate judge granted sanctions in the form of attorneys’ fees.
The district court agreed with the award. The district court then awarded
attorneys’ fees required to respond to the Hoggatts seeking the court’s
review of the magistrate judge’s decision.
The magistrate judge’s rationale for awarding attorneys’ fees was that
the Hoggatts attempted to circumvent the discovery process by seeking
documents outside of formal discovery. The Hoggatts’ only response is that
their request for documentation was pursuant to Section 612 of the Fair
Credit Reporting Act, as it was based on the cancellation of a policy different
from that which is the subject of the lawsuit. The Hoggatts generally state
that the documents requested were pursuant to the non-renewal of Dr. and
Mrs. Hoggatts’ automobile insurance with Allstate, which is not the policy at
issue in this case. If there is any merit to that distinction, the Hoggatts have
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not sought to explain it through legal argument in their brief. We do not
independently research the point. The district court did not abuse its
discretion in awarding attorneys’ fees.
We DENY the appellees’ motion for additional attorneys’ fees
during this appeal.
AFFIRMED.
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