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Category: Bad Faith Claim

  • Louisiana Court Upholds Insurer’s Position in Uninsured Motorist Claim Dispute

    In a recent ruling, the Louisiana Court of Appeal, Third Circuit, affirmed a trial court’s decision denying Amanda Bertrand’s claim for penalties and attorney fees against her underinsured/uninsured motorist (UM) insurer, Progressive Security Insurance Company. The case stemmed from a dispute over the timeliness of Progressive’s payment following Ms. Bertrand’s demand for the limits of her UM coverage.

    Ms. Bertrand was injured in a car accident in 2012. The at-fault driver’s insurance company, Farm Bureau, tendered its policy limits of $15,000 in early 2013. Subsequently, Ms. Bertrand notified Progressive, her UM insurer, of the accident and demanded payment of her $15,000 UM policy limits.

    Progressive received Ms. Bertrand’s demand letter but requested an additional medical record from her treating physician. Upon receiving this record, Progressive promptly issued payment. However, due to a communication issue, Ms. Bertrand’s attorney indicated that the payment had not been received, leading Progressive to stop the initial payment and reissue it.

    Ms. Bertrand’s attorney then raised concerns about the language on the reissued check and accompanying release document, suggesting they constituted a conditional tender rather than the unconditional tender required by law. Progressive assured Ms. Bertrand’s counsel that the tender was unconditional.

    Ms. Bertrand eventually negotiated the check but later filed a lawsuit against Progressive, claiming they failed to issue an unconditional tender within the statutory timeframe and seeking penalties, attorney fees, and costs.

    The Court of Appeal focused on two key issues:

    1. Satisfactory Proof of Loss: The court determined that Progressive did not receive a satisfactory proof of loss until it received the additional medical record from Ms. Bertrand’s physician. This record was crucial in confirming the extent of Ms. Bertrand’s injuries and their relation to the accident.

    2. Unconditional Tender: The court concluded that Progressive’s subsequent communication clarifying the unconditional nature of the payment constituted an unconditional tender.

    Furthermore, the court addressed procedural objections raised by Ms. Bertrand regarding the evidence presented by Progressive. It determined that Progressive’s submissions complied with the relevant legal requirements.

    Based on its analysis, the Court of Appeal affirmed the trial court’s judgment, dismissing Ms. Bertrand’s claims against Progressive. It held that Ms. Bertrand failed to prove that Progressive’s actions were arbitrary, capricious, or without probable cause, which is necessary to recover penalties and attorney fees.

    This case highlights the importance of clear communication and complete documentation in insurance claims, particularly when dealing with UM coverage. It emphasizes the insurer’s right to request additional information to assess the claim’s validity and the insured’s obligation to provide a satisfactory proof of loss. Additionally, the ruling underscores the necessity of demonstrating an insurer’s bad faith to recover penalties and attorney fees.

    Additional Sources:AMANDA BERTRAND VERSUS PROGRESSIVE SECURITY INSURANCE COMPANY

    Written by Berniard Law Firm

    Other Berniard Law Firm Articles on Bad Faith Insurance Lawsuits: Court of Appeals Awards Bad Faith Damages Against Insurance Company Who Refused to Pay and Bad Faith Insurance Claim Dismissed Due To Waiting Too Long To File

  • Seeking Liability for Water Damage: A Case Study on Responsibility and Legal Remedies

    Mardi Gras, a time of joyous celebration, took an unexpected turn for a store near a French Quarter hotel when a sprinkler head malfunctioned, resulting in significant water damage. Despite the storeowner’s insurance covering the damages, a lawsuit ensued to determine the hotel’s liability for the losses incurred. This case highlights the complexities of determining responsibility and legal remedies in property damage cases, emphasizing the importance of seeking legal counsel to navigate such situations effectively.

    Hotel Management of New Orleans (“HMNO”) owned and operated the French Market Inn. A sprinkler head located in the hotel was triggered during Mardi Gras, which caused a water leak and flooding in the store two floors below. The storeowner claimed water leaked into its store for approximately two hours. During that time, HMNO did not try to turn off the sprinkler but instead waited for the fire department to turn off the sprinkler. This caused damage to the store.

    State Farm insured the storeowner and paid the storeowner approximately $41k under its policy. State Farm then filed a lawsuit against HMNO and its insurer, Companion Property, and Casualty Insurance Company, seeking repayment of the $41k it paid to the storeowner under its policy. The trial court found in favor of State Farm and ordered HMNO and Companion to pay the stipulated damages of $41k. HMNO and Companion appealed, arguing that the trial court erred in finding that HMNO knew or should have known the sprinkler was defective, HMNO employees were negligent, and denying HMNO’s motion for involuntary dismissal. 

    In civil cases such as this, an appellate court cannot set aside a factual finding unless the trial court’s finding is clearly wrong or manifestly erroneous. An appellate court also applies the manifest error standard in reviewing a motion for involuntary dismissal. Under La. C.C. art. 2316, a person is responsible for damage caused by their negligence. 

    Here, there was no dispute that the water that leaked from HMNO’s sprinkler damaged the store. The parties also agreed to damages of $42k. In Louisiana, a business does not have a duty to protect nearby buildings from water from a fire sprinkler system. However, there is a duty to use reasonable care to avoid injuring others. Here, the evidence showed that HMNO’s employees followed the appropriate procedure in requiring the fire department to turn off the activated sprinkler. State Farm did not present any evidence that requiring the fire department to turn off the sprinkler created an unreasonable risk of harm. Further, there was no evidence that the sprinkler was defective. Therefore, the appellate court found that State Farm did not establish HMNO was negligent. 

    HMNO and its insurer also argued that the trial court erred in denying their motion for involuntary dismissal. Under La. C.C.P art. 1672(B), a defendant can move for an involuntary dismissal following a bench trial where the plaintiff has not shown a right to relief. Because the appellate court found the trial court committed manifest error in finding in favor of State Farm, it was also not entitled to an involuntary dismissal. 

    In the case of State Farm v. Hotel Management of New Orleans, the appellate court reversed the trial court’s ruling and found that the hotel, HMNO, was not negligent for the water damage suffered by the store. While the hotel’s sprinkler malfunctioned during Mardi Gras, causing water leakage and subsequent damage, the evidence demonstrated that HMNO’s employees followed standard procedures by waiting for the fire department to handle the situation. 

    Moreover, there was no evidence of a defective sprinkler or any unreasonable risk of harm created by the hotel’s actions. As a result, the appellate court found in favor of HMNO and its insurer, Companion Property, and Casualty Insurance Company, denying the repayment of damages sought by State Farm. When faced with property damage, seeking the guidance of a knowledgeable attorney can help you understand your legal options and pursue appropriate remedies to recover for the losses you have suffered.

    Additional Sources: State Farm Fire and Casualty Co. v. Hotel Management of New Orleans, LLC

    Written by Berniard Law Firm

    Additional Berniard Law Firm Article on Liability for Water Leaks: Homeowners Recover Full Amount of Wood Floor Damages, and Home Insurance Company is Sanctioned for Delay

  • Trial Court Judgment Amended in Baton Rouge Workplace Incident, Shows Importance of Diligent Lawyering

    Court cases are contentious, polarizing atmospheres between the parties. Stubbornness is ripe, and the opposing parties are staunchly in, unsurprisingly, opposition. However, sometimes even opposing parties can agree. Any party can take issue with a court’s judgment, and sometimes ALL parties can take issue with a court’s decision–even if these issues are different. But when multiple parties raise various errors in a trial court judgment, how can the higher courts resolve such allegations of error?

     In 2001, a workplace incident occurred between the plaintiff, Bradley W. Smith, and the defendant, then-coworker Paul Babin. Smith alleged that while the two parties were in the parking lot at their workplace, Babin intentionally hit Smith with his vehicle. In his 2002 lawsuit, Smith claimed that Babin was liable for Smith’s damages and later amended the lawsuit to include Shelter Mutual Insurance Company (Shelter) as Babin’s liability insurer. 

    In late 2014, a trial court heard Smith’s lawsuit on liability, causation, and damages and then heard Babin’s crossclaims. At the beginning of the trial, the parties entered a pretrial stipulation that determined Smith’s past medical expenses caused by Babin’s act totaled $338,556.27, for which both Shelter and Babin would get worker’s compensation credit. 

     After hearing all issues and crossclaims, the trial court determined that Smith incurred past medical expenses of $782.43 and that Shelter had no duty to defend Babin under his policy and did not deny this duty in bad faith. Following the final judgment, the parties raised a series of issues concerning the determination of past medical expenses: Shelter and Smith filed numerous proposed judgments, Smith filed for a new trial that was denied, and all parties raised alleged errors with the trial court’s decision.

     Shelter appealed the final judgment from the trial court, alleging that the court was wrong in its description of the judicial interest owed to Smith and that the court was wrong in finding that Smith’s damages caused by Babin’s act were not expected from Babin’s perspective. Smith answered the appeal, alleging that the trial court was wrong to include certain documents in the record and finding that Shelter’s policy was not ambiguous regarding judicial interest. Babin also answered by saying the trial court erred in deciding that Shelter had no duty to defend him and that Shelter did not deny its duty to defend in bad faith.

     The appellate court took each of the issues raised by the parties one by one:

    Shelter’s allegation that the trial court’s description of judicial interest was wrong was found compelling by the appellate court. As described above, before the trial, the parties had agreed on what Smith’s past medical expenses were. It was wrong for the trial court to leave this issue to jury determination when the parties had already decided. As such, the trial court judgment was amended to be consistent with the stipulation the parties entered beforehand. 

    Shelter also took issue with the trial court’s determination that Babin could not expect Smith’s injuries from the car incident. However, this issue was not for the appellate court to decide. This particular issue of expectation or intent is relevant to insurance coverage and not liability questions at issue here. This analysis of expectation or intention is too abstract and hypothetical to be a valid issue before this court. Louisiana State Board of Nursing v. Gautreaux, 2009-1758, p. 4 (La. App. 1 Cit. 6/11/10), 39 So.3d 806,811.

     Smith alleged that the trial court committed evidentiary error by allowing a copy of Shelter’s insurance policy on the record because the document in question described an insurance policy that was not effective at the time of the incident. Regarding this particular issue, a trial court is given fairly broad discretion over evidence. An appellate court tends to disturb a trial court’s evidentiary determinations only if there is a clear error or undue prejudice against a party. Wright v. Bennett, 2004-1994, pp. 6-7 (La. App. 1 Cir. 9/28/05), 924 So.2d 178,183. 

    A reversal of an evidentiary determination by the trial court is only reversible if the effect of that inappropriate evidence is clear and significant. La. Code Evid. art. 103(A). The appellate court found that, although the introduced evidence represented an outdated policy held by Babin, it was clear. The trial court agreed that the evidence showed the same policy that Babin had renewed and thus held at the time of the incident. Hence, the incorrect date was irrelevant, the evidence permissible, and this raised error was dismissed. 

    Smith also alleged that the trial court incorrectly determined Shelter’s policy was ambiguous when Smith moved for summary judgment on that issue. In this summary judgment review, the appellate court considered the issue based on the facts without consideration of the trial court’s determinations, deciding if there was any issue of material fact and whether Smith was entitled to summary judgment. Jones v. Clesi Foundations, L.L.C., 2015-0157, p. 4 (La. App. 1 Cir. 11/3/15), 183 So.3d 532, 534. In assessing contract language, the court considered it at its plain, ordinary meaning. See La. Civ. Code art. 2047. Under that assessment, the appellate court found that the policy was unambiguous and affirmed the trial court’s denial of Smith’s motion.

     Babin alleged that Shelter owed him a duty to defend under state law in negligence actions. However, Shelter argued that Babin’s act was intentional, and the policy does not cover intentional acts. Smith’s initial petition alleged that Babin’s action was intentional and that Babin had a history of harassing the plaintiff before the specific incident at issue. It was not until Smith began adding insurers to his petition that he began raising theories of negligence. As such, the appellate court affirmed that Babin’s act was intentional, not negligent, thus Shelter was under no obligation to defend Babin under the policy. 

     Ultimately, the appellate court partially amended the trial court’s judgment to create consistency with the pretrial stipulation and affirmed the rest of the extensive trial court judgment. 

     This case highlights, more than anything, the importance of diligent recordkeeping. When cases take years to resolve, issues can arise at any point. Therefore, it is prudential to have representation that pays attention, remembers all the steps, and can successfully argue any issues with the court. 

    In this case, Shelter’s representation successfully did so–Shelter pointed out the trial court’s inconsistency with the pretrial stipulation regarding judicial interest and called it out. As a result, the appellate court fixed the final judgment based on Shelter’s argument. By keeping a diligent record of all steps in the litigation process and being a diligent advocate, Shelter convinced the court.

     Additional Sources: Smith v. Babin 

     Written by Berniard Law Firm Writer: Callie Ericksen

    Additional Berniard Law Firm Articles on Amended Final Judgments: Decretal Language: Last Words in a Final Judgment

  • New Orleans Car Accident with Out of State Insurance Policy, Which State’s Laws Apply to the Lawsuit?

    Automobile insurance claims are complex enough, as it is unlikely that all parties involved will immediately agree on a settlement amount. These claims become even more convoluted when there are questions as to what state law should apply or when the insured isn’t fully aware of what his policy entails. Unfortunately, this is precisely what happened when a man was involved in an accident in New Orleans. 

    Jones was involved in a motor vehicle accident in Orleans Parish, and the other driver, insured by Allstate, was found to be at fault. Jones settled with Allstate and then attempted to recover under his own uninsured/underinsured motorist claim from GEICO. GEICO denied his claim stating that Jones was in direct violation of his Georgia-issued policy and statutory law when he failed to obtain GEICO’s approval before settling with and releasing Allstate. 

    Jones then brought a claim against GEICO, where he, in part, filed a motion for summary judgment seeking a judicial determination that Louisiana law applied, not Georgia’s. The Civil District Court of Orleans Parish granted Jones’ partial summary judgment claim and found that Louisiana law applied. GEICO then appealed the Trial Court’s ruling to the Louisiana Fourth Circuit Court of Appeal, where the issue focused on whether the Trial Court correctly granted Jones’ motion for partial summary judgment. 

    Jones alleged GEICO acted in bad faith when it failed to pay for his uninsured/underinsured motorist claim. The record showed that GEICO rejected Jones’ claim because he was issued a Georgia insurance policy. Under Georgia law, Jones waived his claim when he settled the underlying tort case with Allstate. Both parties agreed that Jones’ claim would be distinguished under Georgia law but disagreed on which state’s law should apply. 

    The Court of Appeal found that a legitimate question existed as to which state’s law applied and, on its face, was considered a substantial legal issue. The Court of Appeal then found that GEICO did not act in bad faith in pursuing judicial determination on the choice of law and ruled for GEICO on that issue. 

    Jones’ second claim was that GEICO acted in bad faith when it omitted pertinent facts regarding his uninsured/underinsured motorist coverage and violated La R.S. 22:1973(B)(1). That law states there is a breach in the insurer’s duties to act in good faith and fair dealing if the insurance company misrepresents pertinent facts or policy provisions relating to any coverages at issue. The overarching crux of Jones’ bad faith claim focused on GEICO’s failure to notify him or his counsel that a specific release was required and that GEICO induced him to waive his uninsured/underinsured motorist claim to avoid tendering payment.

    Jones also claimed he was unaware that he was issued a Georgia policy. However, GEICO maintained that Jones identified Georgia as his address when applying for coverage and repeatedly renewed his policy based on the Georgia address.   

    The Court of Appeal found that the parties’ differing interpretation of the events and whether Jones’ contentions were plausible were questions of fact and, therefore, were not appropriate for summary judgment. The Court of Appeal then reversed the Trial Court’s ruling of summary judgment with respect to  Jones’ bad faith claim, as it found that the parties’ accounts of the facts and circumstances required additional weighing of the evidence and for the determination of credibility. The Court of Appeal then remanded the matter for further proceedings. 

    As can be seen, summary judgment is not always appropriate, especially when there are competing arguments as to what state law should apply in one case. Additionally, this case demonstrates the importance of understanding your specific car insurance policy and what it covers. Issues such as these can become extremely tedious and confusing, requiring the help of an attorney with experience in these types of claims.  

     Additional Sources: WILLIE JONES VERSUS GOVERNMENT EMPLOYEES INSURANCE COMPANY

    Written by Berniard Law Firm Blog Writer: Samantha Calhoun

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