Taghavi v. Brooklyn Specialty Insurance Company RRG Inc

IN THE UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
MAGHSOUD TAGHAVI, 	§
§
Plaintiff, 	§
§
V. 	§ 	No. 3:25-cv-1735-S-BN
§
BROOKLYN SPECIALTY INSURANCE §
COMPANY RRG, INC., 	§
§
Defendant. 	§
FINDINGS, CONCLUSIONS, AND RECOMMENDATION OF THE
UNITED STATES MAGISTRATE JUDGE
Plaintiff Maghsoud Taghavi filed a complaint against Defendant Brooklyn
Specialty Insurance Company Risk Retention Group, Inc.’s (“BSIC”) asserting claims
for breach of contract, violation of the Texas Insurance Code, and Stowers liability
and requesting a declaratory judgment under 28 U.S.C. § 2201. See Dkt. No. 1.
United States District Judge Karen Gren Scholer referred this lawsuit to the
undersigned United States magistrate judge for pretrial management under 28
U.S.C. § 636(b). See Dkt. No. 6.
BCIS simultaneously answered the complaint and moved to dismiss its
substantive claims under Federal Rule of Civil Procedure 12(b)(6). See Dkt. Nos. 11
& 12. Taghavi responded to the motion and moved for leave to amend his complaint,
and BCIS replied and responded to the motion for leave to amend. See Dkt. Nos. 14-
16.
For the reasons and to the extent set out below, the Court should grant the
motion to dismiss, deny as futile the motion for leave to amend, and dismiss this
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lawsuit.
Legal Standards
A motion under Rule 12(b)(6) is “not meant to resolve disputed facts or test the
merits of a lawsuit” but “instead must show that, even in the plaintiff’s best-case
scenario, the complaint does not state a plausible case for relief.” Sewell v. Monroe
City Sch. Bd., 974 F.3d 577, 581 (5th Cir. 2020).
Considering such a motion, the Court “accepts all well-pleaded facts as true,
viewing them in the light most favorable to the plaintiff.” In re Katrina Canal
Breaches Litig., 495 F.3d 191, 205-06 (5th Cir. 2007).
But a plaintiff still must plead “enough facts to state a claim to relief that is
plausible on its face” and must plead those facts with enough specificity “to raise a
right to relief above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544,
570, 555 (2007).
“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.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
So a court’s “obligation [is] to accept [the] complaint’s factual allegations as
true and assess whether those facts permit a reasonable inference that [a defendant]
is liable.” Sewell, 974 F.3d at 581; cf. Bryant v. Ditech Fin., L.L.C., No. 23-10416, 2024
WL 890122, at *3 (5th Cir. Mar. 1, 2024) (“[J]ust as plaintiffs cannot state a claim
using speculation, defendants cannot defeat plausible inferences using speculation.”).
This “plausibility standard is not akin to a ‘probability requirement,’ but it
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asks for more than a sheer possibility that a defendant has acted unlawfully.” Iqbal,
556 U.S. at 678.
So, “[w]here a complaint pleads facts that are merely consistent with a
defendant’s liability, it stops short of the line between possibility and plausibility of
entitlement to relief.” Id. (cleaned up; quoting Twombly, 550 U.S. at 557); see, e.g.,
Parker v. Landry, 935 F.3d 9, 17 (1st Cir. 2019) (Where “a complaint reveals random
puffs of smoke but nothing resembling real signs of fire, the plausibility standard is
not satisfied.”).
And, while Federal Rule of Civil Procedure 8(a)(2) does not mandate detailed
factual allegations, it does require that a plaintiff allege more than labels and
conclusions.
So, while a court must accept a plaintiff’s factual allegations as true, it is “not
bound to accept as true a legal conclusion couched as a factual allegation.” Iqbal, 556
U.S. at 678 (quoting Twombly, 550 U.S. at 555).
Consequently, a threadbare or formulaic recitation of the elements of a cause
of 	action, 	supported 	by 	mere 	conclusory 	statements, 	will 	not 	suffice. 	See 	id.;
Armstrong v. Ashley, 60 F.4th 262, 269 (5th Cir. 2023) (“[T]he court does not ‘presume
true a number of categories of statements, including legal conclusions; mere labels;
threadbare recitals of the elements of a cause of action; conclusory statements; and
naked assertions devoid of further factual enhancement.’” (quoting Harmon v. City of
Arlington, Tex., 16 F.4th 1159, 1162-63 (5th Cir. 2021))).
Summed up, “to survive” dismissal under Twombly and Iqbal, plaintiffs must
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“plead 	facts 	sufficient 	to 	show” 	that 	the 	claims 	asserted 	have 	“substantive
plausibility” by stating “simply, concisely, and directly events” that they contend
entitle them to relief. Johnson v. City of Shelby, Miss., 574 U.S. 10, 12 (2014) (per
curiam) (citing FED . R. CIV. P. 8(a)(2)-(3), (d)(1), (e)).
Federal Rule of Civil Procedure 15 requires that leave to amend be granted
freely “when justice so requires.” FED . R. CIV. P. 15(a)(2).
Because this rule provides a “strong presumption in favor of granting leave to
amend,” Fin. Acquisition Partners, LP v. Blackwell, 440 F.3d 278, 291 (5th Cir. 2006),
the Court must do so “unless there is a substantial reason to deny leave to amend,”
Dussouy v. Gulf Coast Inv. Corp., 660 F.2d 594, 598 (5th Cir. Nov. 1981).
One such reason is futility. That is, “[i]f the complaint, as amended, would be
subject to dismissal, then amendment is futile and the district court [is] within its
discretion to deny leave to amend.” Martinez v. Nueces Cnty., Tex., 71 F.4th 385, 391
(5th Cir. 2023) (quoting Ariyan, Inc. v. Sewage & Water Bd. of New Orleans, 29 F.4th
226, 229 (5th Cir. 2022)).
In this regard, the Court must “ask whether, in his proposed amended
complaint, [a plaintiff] has pleaded ‘factual content that allows the court to draw the
reasonable inference that [a] defendant is liable for the misconduct alleged.’” Id.
(quoting Iqbal, 556 U.S. at 678); cf. Peña v. City of Rio Grande City, 879 F.3d 613, 618
(5th Cir. 2018) (“Where the district court’s denial of leave to amend was based solely
on futility, [the United States Court of Appeals for the Fifth Circuit] applies a de novo
standard of review identical, in practice, to the standard used for reviewing a
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dismissal under Rule 12(b)(6).” (cleaned up)).
Aside from “matters of which judicial notice may be taken under Federal Rule
of Evidence 201,” Inclusive Communities Project, Inc. v. Lincoln Prop. Co., 920 F.3d
890, 900 (5th Cir. 2019) (citations omitted), a court cannot look beyond the pleadings
in deciding a Rule 12(b)(6) motion, see Spivey v. Robertson, 197 F.3d 772, 774 (5th
Cir. 1999); see also Basic Capital Mgmt., Inc. v. Dynex Capital, Inc., 976 F.3d 585,
589 (5th Cir. 2020) (Federal Rule of Evidence 201(d) “expressly provides that a court
‘may take judicial notice at any stage of the proceeding,’ and our precedents confirm
judicially noticed facts may be considered in ruling on a 12(b)(6) motion.” (citations
omitted)).
Pleadings in the Rule 12(b)(6) context include attachments to the complaint.
In re Katrina Canal Breaches Litig., 495 F.3d 191, 205 (5th Cir. 2007); see also Gill
as Next Friend of K.C.R. v. Judd, 941 F.3d 504, 511 (11th Cir. 2019) (“The Civil Rules
provide that an attachment to a complaint generally becomes ‘part of the pleading for
all purposes,’ including for ruling on a motion to dismiss.” (quoting FED . R. CIV. P.
10(c); citations omitted)).
And, “[w]hen an allegation is contradicted by the contents of an exhibit
attached to the pleading,” “the exhibit and not the allegation controls.” Rogers v. City
of Yoakrum, 660 F. App’x 279, 285 n.6 (5th Cir. 2016) (per curiam) (cleaned up;
quoting United States ex rel. Riley v. St. Luke’s Episcopal Hosp., 355 F.3d 370, 377
(5th Cir. 2004) (citing Simmons v. Peavy-Welsh Lumber Co., 113 F.2d 812, 813 (5th
Cir. 1940))).
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Documents “attache[d] to a motion to dismiss are considered to be part of the
pleadings, if they are referred to in the plaintiff’s complaint and are central to her
claim.” Collins v. Morgan Stanley Dean Witter, 224 F.3d 496, 498-99 (5th Cir. 2000)
(quoting Venture Assocs. Corp. v. Zenith Data Sys. Corp., 987 F.2d 429, 431 (7th Cir.
1993)).
And, while the Fifth Circuit “has not articulated a test for determining when
a document is central to a plaintiff’s claims, the case law suggests that documents are
central when they are necessary to establish an element of one of the plaintiff’s
claims. Thus, when a plaintiff’s claim is based on the terms of a contract, the
documents constituting the contract are central to the plaintiff’s claim.” Kaye v. Lone
Star Fund V (U.S.), L.P., 453 B.R. 645, 662 (N.D. Tex. 2011).
But, “if a document referenced in the plaintiff’s complaint is merely evidence
of an element of the plaintiff’s claim, then the court may not incorporate it into the
complaint.” Id.
Analysis
Where Taghavi has submitted a proposed first amended complaint with his
response to the motion to dismiss [Dkt. No. 15-1] and BSIC has responded to that
proposed pleading by arguing that Taghavi’s “requested amendment would be futile
because no additional facts can possibly create a legally cognizable cause of action for
Stowers Liability, Breach of Contract, or Insurance Code Claims,” Dkt. No. 16 at 1,
the Court should review the proposed amended complaint under the standards of
Rule 12(b)(6) to determine if leave to amend is futile.
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This lawsuit is related to a prior action in this Court, brought by Taghavi
against Defendants Enrique Leblanc, Y&S Trucking (“Y&S”), and Ignacio Iser, in
which the Court entered default judgment and awarded Taghavi $1,746,017.03 in
damages, jointly and severally, against Leblanc, Y&S, and Iser, see Taghavi v. Soto,
No. 3:21-cv-2557-S-BN, 2024 WL 4191731 (N.D. Tex. Aug. 21, 2024), rec. accepted,
2024 WL 4194326 (N.D. Tex. Sept. 13, 2024), and then granted Taghavi’s motion
under Federal Rule of Civil Procedure 64 and Section 31.002 of the Texas Civil
Practice and Remedies Code for a turnover order awarding to him all rights and title
to Leblanc, Y&S, and Iser’s causes of action against BSIC, its subsidiaries, and any
entity having an ownership stake of at least 51% in BSIC, see Taghavi v. Soto, No.
3:21-cv-2557-S-BN, 2025 WL 1773008 (N.D. Tex. June 4, 2025), rec. accepted, 2025
WL 1798942 (N.D. Tex. June 26, 2025).
Through his proposed amended complaint, Taghavi “seeks a declaratory
judgment that [BSIC] provided coverage under the MCS-90 endorsement attached to
the policy … to its insured, Y&S Trucking, LLC,” and he characterizes this as a direct
action authorized by federal law under 49 U.S.C. § 13906 and 49 C.F.R. § 387. Dkt.
No. 15, ¶¶ 1.3 & 1.4.
And, so, the undersigned agrees with BSIC that, as pleaded, Taghavi’s action
is based on the MCS-90 endorsement. See also id., ¶ 8.2 (seeking a “judgment
declaring that [t]he insurance policy issued by [BSIC] was in effect at the time of the
underlying crash; [t]he insurance policy issued by [BSIC]was issued with an MCS-90
endorsement; [t]he MCS-90 endorsement is applicable to the Judgment; and [BSIC]
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is obligated to pay the Judgment under the MCS-90 endorsement” (cleaned up)).
An “MCS-90 endorsement is not insurance. Instead, it ‘creates a suretyship,
which obligates an insurer to pay certain judgments against the insured, even though
the insurance contract would have otherwise excluded coverage.” Wesco Ins. Co. v.
Rich, No. 22-60283, 2023 WL 166418, at *2 (5th Cir. Jan. 12, 2023) (per curiam)
(cleaned up; quoting Canal Ins. Co. v. Coleman, 625 F.3d 244, 247 (5th Cir. 2010);
citing 49 C.F.R. §§ 387.3; 387.7).
This endorsement, “required under the federal Motor Carrier Act,” “is intended
to protect the public by requiring registered interstate motor carriers to file with the
Department of Transportation proof of insurance ‘sufficient to pay ... for each final
judgment against the registrant for bodily injury to, or death of, an individual
resulting from the negligent operation, maintenance, or use of motor vehicles, or for
loss or damage to property.’” Progressive Com. Cas. Ins. Co. v. Xpress Transp.
Logistics, LLC, Civ. A. No. H-21-2683, 2022 WL 103555, at *3 (S.D. Tex. Jan. 11,
2022) (quoting 49 U.S.C. § 13906(a)(1)).
To 	ensure 	that 	motor 	carriers 	have 	the 	minimum 	levels 	of
financial 	responsibility 	required, 	the 	Motor 	Carrier 	Act 	and 	its
accompanying 	regulations 	provide 	that 	obtaining 	an 	MCS-90
endorsement in a policy is one of the ways that a motor carrier can
submit 	proof 	of 	the 	required 	financial 	responsibility. 	49 	C.F.R. 	§
387.7(d). This endorsement requires the insurer to pay “any final
judgment recovered against the insured for public liability resulting
from negligence in the operation ... or use of motor vehicles ... regardless
of whether [it] is specifically described in the policy.” See 49 C.F.R. §
387.15. The endorsement then allows the insurer to seek reimbursement
from the insured. Id.
Id. (parenthetical omitted).
And, so, “[t]he endorsement does not protect the insured, but the public, by
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filling an insurance gap; it guarantees a source of recovery when a registered motor
carrier negligently injures a member of the public and coverage does not otherwise
apply.” Id. at *4.
Taghavi asserts several claims that he contends the Court has turned over to
him: (1) that BSIC breached its agreement with the judgment debtors (Leblanc, Y&S,
and Iser) by failing to defend and indemnify them; (2) that, in various ways, BSIC
violated Chapters 541 and 542 of the Texas Insurance Code; and (3) that BSIC failed
to comply with the duties required of an insurer provided with a Stowers demand
letter and thus failed to act with ordinary prudence and exposed Y&S to the judgment
against it.
And, to the extent that Taghavi seeks a declaratory judgment under Section
2201, “the law makes clear that – although the Declaratory Judgment Act provides a
remedy different from an injunction – it does not provide an additional cause of action
with respect to the underlying claim.” Okpalobi v. Foster, 244 F.3d 405, 423 n.31 (5th
Cir. 2001) (citation omitted).
So, because “[a] request for declaratory judgment is not itself a cause of action,”
“a claim for a declaratory judgment necessarily fails if there is no underlying cause
of action.” Wesner as Tr. of Charles Wesner, Jr. Living Tr. v. Southall, No. 3:22-cv-
927-B, 2023 WL 7107123, at *3 (N.D. Tex. Sept. 22, 2023) (cleaned up); see also Val-
Com Acquisitions Tr. v. CitiMortgage, Inc., 421 F. App’x 398, 400-01 (5th Cir. 2011)
(per curiam) (“In a declaratory judgment action, the parties litigate the underlying
claim, and the declaratory judgment is merely a form of relief that the court may
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grant.” (citing Collin Cnty., Tex. v. Homeowners Ass’n for Values Essential to
Neighborhoods (HAVEN), 915 F.2d 167, 171 (5th Cir. 1990))).
As to the underlying claims, BSIC argues that the Stowers claim should be
dismissed because Taghavi alleges that BSIC “is obligated to pay the [default]
judgment under the MCS-90 endorsement,” e.g., Dkt. No. 15-1, ¶ 1.6(c), and, while
his Stowers claim is based on BSIC’s failure to pay a pre-judgment demand, see id.,
¶¶ 7.1-7.3, the MCS-90 endorsement only provides for payment of final judgments,
see Dkt. No. 11, Ex. A.
First, it’s undisputed that the applicable policy in this case has an MCS-90
endorsement. See generally Dkt. No. 1 & Dkt. No. 15-1 (referencing the endorsement);
Dkt. No. 11, Ex. A (actual endorsement attached to motion to dismiss). And, so, it’s
proper to consider the MCS-90 endorsement attached to the motion to dismiss, as it’s
referenced in Taghavi’s operative (and proposed amended) complaint and central to
his claims. See Collins, 224 F.3d at 498-99; Kaye, 453 B.R. at 662.
The court in Xpress addressed the intersection of a Stowers claim and a
federally mandated MCS-90 endorsement:
Under Texas law, an insurer has a Stowers duty, “to exercise
ordinary care in the settlement of claims to protect its insureds against
judgments in excess of policy limits.” Am. Physicians Ins. Exch. v.
Garcia, 876 S.W.2d 842, 843 n.2 (Tex. 1994). The “duty is not activated
by a settlement demand unless: (1) the claim against the insured is
within the scope of coverage, (2) there is a demand within policy limits,
and (3) the terms of the demand are such that an ordinarily prudent
insurer would accept it, considering the likelihood and degree of the
insured’s potential exposure to an excess judgment.” Am. Guarantee &
Liability Ins. Co. v. ACE Am. Ins. Co., 990 F.3d 842, 847 (5th Cir. 2021)
(citing Tex. Farmers Ins. Co. v. Soriano, 881 S.W.2d 312, 314 (Tex.
1994)). “This well-recognized duty arises from the obligations to defend
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and indemnify pursuant to the insurance contract and the control the
policy grants to the insurer over the insured’s defense.” St. Paul Fire &
Marine Ins. Co. v. Convalescent Servs., Inc., 193 F.3d 340, 342 (5th Cir.
1999) (citation omitted).
The Fifth Circuit treats the MCS-90 endorsement as a suretyship,
rather than an indemnity relationship between an insurer and insured.
See Travelers Indem. Co. of Ill. v. W. Am. Specialized Transp. Servs.,
Inc., 409 F.3d 256, 260 (5th Cir. 2005) (“The prevailing law ... is that the
MCS-90 endorsement imposed a suretyship obligation on [the insurer]
to the [public].”). “A suretyship is a three-party relationship where the
surety undertakes to perform to an obligee if the principal fails to do so.
The surety stands in the shoes of the principal and must complete any
obligation due the obligee at the time of default.” 74 AM. JUR. 2d
SURETYSHIP § 1 (2021 Update).
The MCS-90 endorsement is a “safety net” for the public, and “not
an ordinary insurance provision to protect the insured.” Travelers
Indem., 409 F.3d at 260. The reasons behind a duty to settle in the
indemnity-insurance context, in which the insurer has a duty to defend
and indemnify the insured, do not apply to the MCS-90 endorsement
context, in which the insurer owes only an obligation to pay the
remaining 	debt 	of 	an 	insured 	after 	the 	insured’s 	debt 	has 	been
established. See John Deere Ins. Co. v. Truckin’ U.S.A., 122 F.3d 270,
275 (5th Cir. 1997) (the MCS-90 endorsement did not create a duty to
indemnify among the insurers); T.H.E. Ins. Co. v. Larsen Intermodal
Servs., Inc., 242 F.3d 667, 677 (5th Cir. 2001) (recognizing that the MCS-
90 endorsement does not itself create a duty to defend the insured).
Xpress, 2022 WL 103555, at *6.
Under this authority, the court in Xpress then rejected the argument that the
insurer “has a duty to settle under the MCS-90 endorsement.” Id. at *7.
And, to the extent that Taghavi has brought this lawsuit under the premise
that BSIC “is obligated to pay the judgment under the MCS-90 endorsement” – and
because Taghavi alleges no other contractual terms that could apply to this claim –
the Court should dismiss this claim with prejudice for the reasons set out in Xpress.
Cf. 2022 WL 103555, at *7 (“The outcome might be different if the insurance contract,
by terms other than those in the MCS-90 endorsement, imposed a duty to defend and
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indemnify on [the insurer] that encompassed claims brought under the MCS-90
endorsement. See T.H.E. Ins. Co., 242 F.3d at 677 (‘[A]lthough the MCS-90 itself does
not impose a duty to defend upon the insurer, neither does it negate such a duty that
might fall upon the insurer under the Policy as interpreted according to state law.’).
But that is not what [was] pleaded in [the] counterclaim [there].”).
For these reasons, Taghavi also has not plausibly pleaded a breach of contract
claim where he seeks coverage under the MCS-90 endorsement, centers this claim on
that BCIS “breached the contract by failing to defend and indemnify the Judgment
Debtors, causing them to sustain damages,” and alleges no other provisions under
which the contractual duty could arise nor that he presented BSIC with the
applicable final judgment. Dkt. No. 15-1, ¶ 5.2; see T.H.E. Ins. Co., 242 F.3d at 677
(“agree[ing] with [the insurer] that the MCS-90 does not impose a duty to defend on
the insurer where such a duty would not have otherwise existed”).
Turning next to the Texas Insurance Code claims,
Chapter 	541 	of 	the 	Insurance 	Code 	prohibits 	“unfair 	methods 	of
competition” and “unfair or deceptive acts or practices.” TEX. INS . CODE
§ 541.001(1); Lyda Swinerton Builders, Inc. v. Okla. Sur. Co., 903 F.3d
435, 450 (5th Cir. 2018). The overlapping common law duty of good faith
and fair dealing prohibits an insurer from denying or delaying payment
of a claim when it lacks a “reasonable basis” for doing so or “should have
known that no such basis existed.” Wells v. Minn. Life Ins. Co., 885 F.3d
885, 897 (5th Cir. 2018) (citation omitted).
Peterson v. Safeco Ins. Co. of Ind., No. 3:21-cv-2186-K, 2024 WL 3378393, at *5 (N.D.
Tex. July 11, 2024).
And the undersigned agrees with BSIC that, like claims under the Texas
Deceptive Trade Practices Act (“DTPA”), Chapter 541 claims cannot be assigned (or
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turned over). See Great Am. Ins. Co. v. Fed. Ins. Co., No. 3:04-cv-2267-H, 2006 WL
2263312, at *10 (N.D. Tex. Aug. 8, 2006) (“Like the DTPA, the Insurance Code
remedies are personal and punitive in nature. See Stewart Title Guar. Co. v. Sterling,
822 S.W.2d 1, 9 (Tex. 1991) (holding Insurance Code treble damages to be punitive
and designed to deter Code violations). Like the DTPA, the Insurance Code makes no
provision for assignability. Like the DTPA treble damages, Insurance Code damages
are intended to encourage suits by aggrieved consumers. See id. In fact each and
every policy argument articulated by the Texas Supreme Court against assignment
of a DTPA claim applies with equal force to a claim brought under the Texas
Insurance Code.”); Goin v. Crump, No. 05-18-00307-CV, 2020 WL 90919, at *15 (Tex.
App. – Dallas Jan. 8, 2020) (“As with the DTPA, Chapter 541 provides remedies that
are personal and punitive in nature. See Stewart Title Guar. Co. v. Sterling, 822
S.W.2d 1, 9 (Tex. 1991) (noting that treble damages provision in predecessor statute
to Insurance Code section 541.152(b) is punitive in nature and designed to deter
violations of the Code).”).
Chapter 542 is entitled ‘Processing and Settlement of Claims,’” and “[a]
violation of Chapter 542 is not of the same character as a violation of Chapter 541.”
Goin, 2020 WL 90919, at *16 (citing Berkley Reg’l Ins. Co. v. Phila. Indem. Ins. Co.,
No. A-10-CA-362-SS, 2011 WL 9879170, at *9 (W.D. Tex. Apr. 27, 2011) (“Because
the rationale of [PPG Indus., Inc. v. JMB/Houston Ctr. Partners Ltd., 146 S.W.3d 79
(Tex. 2004),] does not seem to apply with great force to Chapter 542 of the Texas
Insurance Code, the Court declines to extend the holding of that case to claims under
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that chapter.”), rev’d on other grounds, 690 F.3d 342 (5th Cir. 2012)).
But, because Taghavi’s pleaded claim – for reimbursement of a judgment – is
a third-party claim, it cannot fall under Chapter 542. See, e.g., W.W. Rowland
Trucking Co., Inc. v. Max Am. Ins. Co., 559 F. App’x 253, 258 (5th Cir. 2014) (per
curiam) (“By its terms, the Prompt Payment Statute only applies to first-party claims.
[TEX. INS . CODE] § 542.051 …. The Prompt Payment Statute does not define first-
party claims, but Texas law distinguishes between first-party and third-party claims
‘based on the claimant’s relationship to the loss.’ Evanston Ins. Co. v. ATOFINA
Petrochemicals, Inc., 256 S.W.3d 660, 674 (Tex. 2008). In a first-party claim, the
insured ‘seeks recovery for the insured’s own loss’; in a third-party claim, the insured
‘seeks coverage for injuries to a third party.’ Id. at 674.”).
And, so, because Taghavi has not plausibly pleaded an “underlying cause of
action,” his “claim for a declaratory judgment necessarily fails.” Wesner, 2023 WL
7107123, at *3.
For these reasons, granting Taghavi leave to file the proposed amended
complaint would be futile, as the amended claims would not survive a challenge under
Rule 12(b)(6). The Court should therefore grant the motion to dismiss, deny the
motion for leave to amend, and dismiss this case with prejudice.
That is because Taghavi has now shown how he would amend his claims
confronted with a motion to dismiss and has not shown that the claims as amended
would be plausibly pleaded, so the Court should conclude that he has now stated his
best case and need not allow further leave to amend. See, e.g., Allen v. Navy Fed.
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Credit Union, No. 3:24-cv-949-L-BN, 2025 WL 484818, at *13 (N.D. Tex. Feb. 13,
2025) (“Granting leave to amend … is not necessary when the plaintiff has pleaded
his or her ‘best case’ after being apprised of pleading deficiencies. Likewise, a district
court need not grant a motion to amend if doing so would be an exercise in futility.”
(citations omitted)).
But the opportunity to file objections to these findings, conclusions, and
recommendation (as further explained below) allows Taghavi another opportunity to
show that this case should not be dismissed with prejudice and that the Court should
instead grant leave to amend. See Scott v. U.S. Bank Nat’l Ass’n, 16 F.4th 1204, 1209
(5th Cir. 2021) (per curiam) (“A court should freely give leave to amend when justice
so requires, but a movant must give the court at least some notice of what his or her
amendments would be and how those amendments would cure the initial complaint’s
defects. If the plaintiff does not provide a copy of the amended complaint nor explain
how the defects could be cured, a district court may deny leave.” (citations omitted)).
Recommendation
The Court should grant Defendant Brooklyn Specialty Insurance Company
Risk Retention Group, Inc.’s motion to dismiss [Dkt. No. 11], deny as futile Plaintiff
Maghsoud Taghavi’s motion for leave to amend [Dkt. No. 15], and, unless Taghavi
through timely objections to these recommendations shows a basis to amend to allege
a plausible claim, the Court should dismiss this lawsuit with prejudice for failure to
state a claim on which relief may be granted.
A copy of these findings, conclusions, and recommendation shall be served on
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all parties in the manner provided by law. Any party who objects to any part of these
findings, conclusions, and recommendation must file specific written objections
within 14 days after being served with a copy. See 28 U.S.C. § 636(b)(1); FED . R. CIV.
P. 72(b). In order to be specific, an objection must identify the specific finding or
recommendation to which objection is made, state the basis for the objection, and
specify the place in the magistrate judge’s findings, conclusions, and recommendation
where the disputed determination is found. An objection that merely incorporates by
reference or refers to the briefing before the magistrate judge is not specific. Failure
to file specific written objections will bar the aggrieved party from appealing the
factual findings and legal conclusions of the magistrate judge that are accepted or
adopted by the district court, except upon grounds of plain error. See Douglass v.
United Servs. Auto. Ass’n, 79 F.3d 1415, 1417 (5th Cir. 1996).
DATED: February 9, 2026
_________________________________________
DAVID L. HORAN
UNITED STATES MAGISTRATE JUDGE
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