Insured Advocacy Group, LLC v. Spartan Services Corp.

Background

Insured Advocacy Group, LLC moved for reconsideration of the court’s July 16, 2024 Opinion and Order, which had granted in part and denied in part the defendants’ motion to dismiss. The motion concerned Count VI of the Second Amended Complaint.

The court had dismissed Count VI because it understood the count to assert a separate equitable claim for an accounting. Under the court’s description of Texas law, that type of claim is proper only when the accounts are sufficiently complex that legal relief and ordinary discovery are inadequate. The court previously concluded that Insured Advocacy Group had not pleaded those facts.

Arguments and Analysis

Insured Advocacy Group argued that, despite the count’s title—“Demand for Accounting”—the allegations stated a breach-of-contract claim based on the agreement’s accounting provision. The relevant allegations stated that Article 2.4.1 required the defendants to provide certain monthly reports and that the defendants failed to provide them despite repeated requests.

The court observed that Count VI was pleaded as a request for relief rather than expressly as a breach-of-contract claim. It did not plead the elements of breach of contract or use the term “breach of contract,” while other counts were expressly titled claims for breach of the agreement. Nevertheless, the court agreed that the facts in Count VI sounded in breach of contract and that Insured Advocacy Group sought specific performance as a remedy.

The court declined to rewrite the complaint or treat a substantive change as a mere correction to the count’s title. It also noted that Insured Advocacy Group was not representing itself without a lawyer, so the court was not required to read additional causes of action into the complaint as it might broadly construe a self-represented litigant’s pleading.

Ruling

The court granted in part and denied in part the motion for reconsideration. It did not reinstate Count VI as pleaded or change the count by interlineation. Instead, the court allowed Insured Advocacy Group to amend its complaint solely to plead the facts stated in Count VI as a breach-of-contract cause of action based on the agreement’s accounting provision. The court found that this amendment would not unfairly burden or prejudice the defendants because the proposed claim relied on facts already pleaded and known to them.

Insured Advocacy Group was directed to file the amended complaint by August 27, 2024. The Clerk of Court was directed to close Docket Nos. 37 and 39. Judge Lewis J. Liman signed the order on August 20, 2024.