First American Bank v. First American Trans Title In

Filing

PUBLISHED OPINION FILED. [13-30888 Affirmed] Judge: RHB , Judge: EBC , Judge: PRO. Mandate pull date is 08/06/2014 [13-30888]

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IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit

No. 13-30888

FILED
July 16, 2014
Lyle W. Cayce
Clerk

FIRST AMERICAN BANK,
Plaintiff–Appellant,
v.

FIRST AMERICAN TRANSPORTATION TITLE INSURANCE COMPANY,
Defendant–Appellee.

Appeal from the United States District Court
for the Eastern District of Louisiana
Before BARKSDALE, CLEMENT, and OWEN, Circuit Judges.
PRISCILLA R. OWEN, Circuit Judge:
On remand from this court, the district court conducted a bench trial to
determine the extent of First American Transportation Title Insurance
Company’s (FATTIC) liability to First American Bank (First American) under
certain vessel title insurance policies. First American appeals the district
court’s final judgment, asserting that the court erred in calculating the amount
due under the policies by using the wrong date of valuation, miscalculating the
value of one of the insured vessels, and improperly making certain deductions.
First American also challenges the district court’s conclusion that FATTIC did
not act in bad faith under Louisiana law. We affirm.

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I
This case is before our court for the second time. 1 Titan Cruise Lines,
Inc. (Titan) defaulted on loans obtained from First American. As we previously
recounted, First American loaned Titan $28,000,000 to finance its operation of
a gaming vessel known as the Ocean Jewel. The loan was secured by a ship
mortgage on the Ocean Jewel as well as mortgages on the Emerald Express
(Emerald) and the Sapphire Express (Sapphire), two high speed catamarans
that transported customers to and from the Ocean Jewel.
FATTIC issued two title insurance policies to First American, one for the
Ocean Jewel and one for the Emerald and Sapphire (collectively, the Shuttles).
Both policies provide that FATTIC is liable for “actual loss or damage . . .
sustained or incurred by [the Insured] by reason of” nineteen enumerated
risks. Relevant to the issues before us, those risks include:
Lack of priority of the Mortgage insured hereunder over any
statutory lien for Necessaries (as that term is defined in 46 U.S.C.
§ 31301 or its equivalent under the law of [the vessels’ country of
registration]) provided to the Vessel[s] prior to or after the Date of
Policy whether or not the statutory lien for Necessaries arises prior
to or after the Date of Policy.
Section 7(a) of the policies provides the extent of FATTIC’s liability. It states,
in relevant part, that the company’s liability shall not exceed:
(iii) The difference between the value of the Title as insured and
the value of the Title subject to the defect, lien or encumbrance
insured against by this policy . . . .
Titan’s operations were unsuccessful and the company filed for
bankruptcy in August 2005. At that time, the Ocean Jewel and Shuttles were
encumbered by necessaries liens resulting from debts owed to suppliers of
necessaries for the vessels. Shortly after Titan’s filing, First American hired

1

See First Am. Bank v. First Am. Transp. Title Ins. Co., 585 F.3d 833 (5th Cir. 2009).

2

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Norman Dufour, a qualified marine surveyor and appraiser, to appraise the
three vessels. Dufour concluded that, as of August 2005, the Ocean Jewel had
a fair market value of $10,800,000; the Sapphire had a value of $2,000,000;
and the hull of the Emerald, which was under repair, was worth $200,000.
The bankruptcy court approved an agreement for Tampa Bay
Shipbuilding & Repair Company (TBSR) to provide berthing and related
services to Titan’s vessels. As security for payment, the court granted TBSR
perfected first-priority liens on each of the berthed vessels. The court also
approved a motion by Titan’s estate to sell the Ocean Jewel and the Sapphire.
Before the sale could be completed, however, the Sapphire sank at her
moorings. The estate negotiated with the purchaser to reduce the purchase
price by $500,000 and to exclude the Sapphire from the sale. The bankruptcy
court approved this agreement, and the Ocean Jewel was sold for $6,450,000.
With First American’s consent, the bankruptcy court ordered $1,110,000 of the
sale proceeds carved out for the benefit of the estate. Of the remaining balance
that was left after certain further payments, $1,162,815 was distributed to
holders of necessaries liens, leaving $4,172,215 to First American.
The bankruptcy court subsequently approved the estate’s abandonment
of the Sapphire. TBSR then filed an in rem action against the vessel in federal
court, asserting that it had a maritime lien as a result of providing necessaries.
Following the court’s entry of a default judgment against the Sapphire, the
U.S. Marshal seized the vessel and sold it at a public auction to TBSR for a
$99,227 credit-bid. Eastern Shipbuilding Group, Inc. (Eastern), meanwhile,
purchased the Emerald’s hull following that vessel’s abandonment for a
$10,000 credit-bid.
First American filed suit against FATTIC under the Shuttles policy after
the insurer claimed that its liability under that policy was limited to the
amounts paid to TBSR and Eastern in the foreclosure sales. Following several
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months of litigation, the district court granted FATTIC’s motion for partial
summary judgment. The court held that First American was not entitled to
recover consequential damages and that FATTIC’s liability was limited to the
amount by which the payments to necessaries lienholders reduced First
American’s recovery, thus confining the covered loss to the amount bid at the
foreclosure sales.
On interlocutory appeal, we affirmed in part and reversed in part. 2 We
agreed that First American was not entitled to consequential damages and
that its recovery was limited to the “difference between the value of First
American’s ship mortgages when unencumbered and the value of First
American’s ship mortgages subject to the necessaries liens.” 3 Nonetheless, we
held that this difference could not be ascertained solely by reference to the
proceeds from the foreclosure sale. Rather, Louisiana law required that “the
finder-of-fact . . . take into consideration all other relevant information when
valuing loss under a title insurance policy,” including “any appraisals, the
foreclosure proceeds, and other market data.” 4 Accordingly, we remanded to
the district court to determine the difference in value as well as “the proper
date of valuation.” 5
While the first appeal was pending, First American filed suit under the
Ocean Jewel policy. After negotiating or settling necessaries claims on First
American’s behalf, FATTIC had tendered $1,162,287 to the Bank, the
approximate amount paid to the necessaries lienholders out of the revenue
from the Ocean Jewel. FATTIC asserted that sum constituted the full amount

2

Id. at 839.

3

Id. at 837-39.

4

Id. at 838.

5

Id.

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due under the Ocean Jewel policy. First American disagreed, claiming that its
covered losses exceeded the amount received by the necessaries lienholders.
On remand from this court, the district court consolidated the cases and
permitted discovery. During discovery, the parties learned that Eastern had
sold the Emerald’s hull for $500,000 on the open market.

After making

deductions for the expenses Eastern incurred in preparing the hull for sale,
FATTIC remitted $450,139.50 to First American under the Shuttles policy.
The parties also discovered that the Sapphire had been sold for $500,000.
FATTIC, however, only paid First American $10,515.38, claiming that amount
represented the difference between the bank’s mortgage as unencumbered and
as subject to covered necessaries liens.
After a bench trial, the district court issued findings of fact and
conclusions of law. The court first concluded that the policies unambiguously
required the vessels to be valued as of the date of their judicial sales. Based
on those dates, the court found that the Ocean Jewel was worth the amount
for which it had sold at the foreclosure sale; accordingly, First American
incurred an insured loss of $1,162,287 under the Ocean Jewel policy. The court
concluded, however, that the Emerald’s foreclosure sale price was not a strong
indicator of that vessel’s value. Instead, it found that First American had
incurred an insured loss of $445,137.50, the amount of Eastern’s net proceeds
from the resale of the vessel’s hull on the open market. The court likewise
determined that the $500,000 resale price was the best evidence of the
Sapphire’s value. However, it held that First American was not entitled to
recover that amount; rather, the bank’s insured loss was limited to $411,288
because $88,712 of TBSR’s credit-bid consisted of uninsured “superpriority
claims.”
Prior to making its calculations, the district court concluded that this
court’s holding from the first appeal regarding the appropriate method of
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calculation under the Shuttles policy also applied to the Ocean Jewel.
Accordingly, in calculating the value of the three vessels, the district court
“note[d] for the record that it considered all available relevant evidence.”
However, it stated that it did not consider First American’s appraisals relevant
because they were conducted well in advance of the vessels’ sales.
Lastly, the court concluded that FATTIC did not act in bad faith. This
appeal followed.
II
Following a bench trial, “a district court’s findings of fact are reviewed
for clear error and its conclusions of law de novo.” 6 The court’s interpretation
of a contract, including whether the contract is ambiguous, “is a matter of law
reviewable de novo.” 7

The parties agree that Louisiana law governs the

policies in this case.
III
First American challenges the district court’s calculation of FATTIC’s
liability on several grounds.

First, it argues that the court erred in

determining the appropriate date of valuation. It contends that the policy is
ambiguous on this question and therefore should be construed against FATTIC
or, in the alternative, that the policy unambiguously requires valuation as of
the date the title defects were discovered.
Louisiana law provides that “[a]mbiguous policy provisions are generally
construed against the insurer and in favor of coverage.” 8 Such ambiguity only
exists if the “policy provision is susceptible to two or more reasonable

6

McLane Foodservice, Inc. v. Table Rock Rests., L.L.C., 736 F.3d 375, 377 (5th Cir.

7

Am. Totalisator Co. v. Fair Grounds Corp., 3 F.3d 810, 813 (5th Cir. 1993).

2013).

Cadwallader v. Allstate Ins. Co., 2002-1637, p. 4 (La. 6/27/03); 848 So. 2d 577, 580;
see also LA. CIV. CODE ANN. art. 2056 (2008).
8

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interpretations.” 9 By contrast, “[i]f the policy wording at issue is clear and
unambiguously expresses the parties’ intent, the insurance contract must be
enforced as written.” 10 A contract’s silence on an issue does not establish
ambiguity if there is only one reasonable interpretation of the parties’ intent. 11
The policies at issue do not specify a date of valuation. The district court
concluded, however, that the policies unambiguously require valuation of the
vessels as of the date of the foreclosure sales. We agree.
Although Louisiana courts have not addressed this issue, a majority of
courts from other jurisdictions have held that, in the absence of specific policy
language, a title insurer’s liability to a mortgagee should be measured using
the foreclosure date. 12

These courts have reasoned that this date is

appropriate because the foreclosure is when the insured actually incurs a
covered loss. 13 While a handful of courts have opted to use other dates in

9

Cadwallader, 848 So. 2d at 580 (emphasis in original).

10

Id.

See, e.g., Sims v. Mulhearn Funeral Home, Inc., 2007-0054, pp. 14-15 (La. 5/22/07);
956 So. 2d 583, 593.
11

See JOYCE D. PALOMAR, 1 TITLE INS. LAW § 10:16 (2013-14 ed.); Christopher B.
Frantze, Equity Income Partners LP v. Chicago Title Insurance Co. and Recovery Under a
Lender’s Title Insurance Policy in a Falling Real Estate Market, 48 REAL PROP. TR. & EST.
L.J. 391, 396 (2013); see also Associated Bank, N.A. v. Stewart Title Guar. Co., 881 F. Supp.
2d 1058, 1066 (D. Minn. 2012); First Internet Bank of Ind. v. Lawyers Title Ins. Co., No. 1:07CV-0869, 2009 WL 2092782, at *6 (S.D. Ind. July 13, 2009); RTC Mortg. Trust 1994 N-1 v.
Fidelity Nat. Title Ins. Co., 58 F. Supp. 2d 503, 535 (D.N.J. 1999); Marble Bank v.
Commonwealth Land Title Ins. Co., 914 F. Supp. 1252, 1254 (E.D.N.C. 1996).
12

See, e.g., First Internet, 2009 WL 2092782, at *6 (“First Internet bargained to have
perfect title in the event of a default and foreclosure, so the time of default and foreclosure is
when damages should be measured.”); Marble Bank, 914 F. Supp. at 1254 (“In the court’s
view, plaintiff did not suffer a loss until it foreclosed on the project. Since a lender suffers
loss only if the note is not repaid, the discovery of an insured-against lien does not trigger
recognition of that loss. Only the completion of foreclosure signifies that a lender will not
collect on its note.” (citation omitted)); PALOMAR, supra note 12, § 10:16; Frantze, supra note
12, at 394-95 (citing RTC Mortg. Trust, 58 F. Supp. 2d at 535).
13

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calculating the amount due a mortgagee, none has used the date of discovery. 14
Rather, they have generally used the date the loan was made and have
involved fact patterns in which there was a total failure of title. 15 The use of
the loan date has been justified in such instances on the ground that the
insured would not have made the loan if it had known the mortgage would be
unenforceable or valueless. 16 That rationale is not applicable to a case like this
in which the insured mortgagee could reasonably anticipate that its mortgage
would be encumbered by some necessaries liens. Although date-of-discovery is
the majority rule for owners’ policies, its use is generally justified on the
ground that the owner of property suffers a loss immediately upon discovery of
a defect, a rationale that is also not applicable to mortgagees. 17
As First American notes, however, some courts have held that language
practically identical to that at issue in this case is ambiguous. 18 We find these
cases unpersuasive and, making an Erie guess, conclude that the Louisiana
Supreme Court would adopt the majority view. 19 “A title insurance policy
See STEVEN PLITT ET AL., 12 COUCH ON INS. § 185:77 (3d ed. 2014); see also Citicorp
Sav. of Ill. v. Stewart Title Guar. Co., 840 F.2d 526, 530 (7th Cir. 1988); Equity Income
Partners LP v. Chi. Title Ins. Co., No. CV-11-1614-PHX-GMS, 2012 WL 3871505, at *4 (D.
Ariz. Sept. 6, 2012); G & B Invs., Inc. v. Henderson (In re Evans), 460 B.R. 848, 895-900
(Bankr. S.D. Miss. 2011).
14

See, e.g., Citicorp Sav., 840 F.2d at 527-28; Equity Income, 2012 WL 3871505, at *1;
Evans, 460 B.R. at 895-900.
15

See, e.g., Citicorp Sav., 840 F.2d at 530 (“As a practical matter, Citicorp would not
have extended $27,000 credit to Robinson on the basis of a voidable mortgage. No lender
would do so.”); Equity Income, 2012 WL 3871505, at *3.
16

PALOMAR, supra note 12, at § 10:16; Frantze, supra note 12, at 396; see also Allison
v. Ticor Title Ins. Co., 907 F.2d 645, 652 (7th Cir. 1990); Hartman v. Shambaugh, 630 P.2d
758, 762 (N.M. 1981); Overholtzer v. N. Cntys. Title Ins. Co., 253 P.2d 116, 125 (Cal. 1953).
17

18

See, e.g., First Internet Bank, 2009 WL 2092782, at *5; G&B Invs., 460 B.R. at 896.

Howe ex rel. Howe v. Scottsdale Ins. Co., 204 F.3d 624, 627 (5th Cir. 2000) (“If the
Louisiana Supreme Court has not ruled on this issue, then this Court must make an ‘Erie
guess’ and ‘determine as best it can’ what the Louisiana Supreme Court would decide.”
(quoting Krieser v. Hobbs, 166 F.3d 736, 738 (5th Cir. 1999))).
19

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provides for indemnity ‘only to the extent that [the insured’s] security is
impaired and to the extent of the resulting loss that it sustains.’” 20 It does not
“guarantee either that the mortgaged premises are worth the amount of the
mortgage or that the mortgage debt will be paid.” 21 As we recently held, a
mortgagee does not suffer a loss under a title insurance policy governed by
Louisiana law until its title actually fails. 22

This is so even when an

impairment prevents the insured from taking actions that could ultimately
mitigate its losses. 23 It would therefore be an unreasonable interpretation of
the policies to say that they provide for valuation as of the date of the discovery
since no loss occurs at that point.

The most appropriate date to use in

calculating First American’s losses is the date of the foreclosure sales, as that
is when First American incurred covered losses. Accordingly, the district court
did not err in selecting that date as the appropriate date of valuation.
IV
First American next argues that the district court erred in calculating
the value of the Ocean Jewel, even as of the date of foreclosure, because the
court failed to consider all available evidence of the vessel’s worth. As First
American concedes, the district court specifically stated for the record that it
considered “all relevant evidence” of the Ocean Jewel’s fair market value in
calculating damages. Nonetheless, First American asks us to examine what

Gibraltar Sav. v. Commonwealth Land Title Ins. Co., 905 F.2d 1203, 1205 (8th Cir.
1990) (alteration in original) (quoting Diversified Mortg. Inv. v. U.S. Life Title Ins. Co. of N.Y.,
544 F.2d 571, 574 n.2 (2d Cir. 1976)).
20

21

Blackhawk Prod. Credit Ass’n v. Chi. Title Ins. Co., 423 N.W.2d 521, 525 (Wis. 1988).

Amzak Capital Mgmt. v. Stewart Title of La. (In re West Feliciana Acquisition,
L.L.C.), 744 F.3d 352, 358 (5th Cir. 2014).
22

See id.; see also First Am. Bank v. First Am. Transp. Title Ins. Co., 585 F.3d 833,
838-39 (5th Cir. 2009) (holding that First American may not recover consequential damages,
including losses “arising from the results of damage rather than from the damage itself”
(quoting BLACK’S LAW DICTIONARY 964 (8th ed. 2004))).
23

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the court did, rather than what it said.

First American contends that,

notwithstanding the district court’s statements, it did not actually measure the
Ocean Jewel’s fair market value based on all available evidence since the
district court disregarded the testimony of First American’s expert appraisers
and relied exclusively on the price the vessel commanded at the foreclosure
sale.
As mentioned, we held during the first appeal that Louisiana law
required the district court to calculate the value of the Shuttles based on “all
. . . relevant information,” including “any appraisals, the foreclosure proceeds,
and other market data.” 24 We did not address, however, whether Louisiana
law requires the same method to be used to calculate the value of a vessel when
the sale proceeds exceed the amount of necessaries liens. Nor need we decide
the question in this case, for even assuming that the district court was required
to consider “all relevant evidence,” it engaged in that analysis and made a
factual finding supported by the record.
Under our precedent, “the trier of fact is not bound by expert
testimony.” 25 While the court is not “at liberty to disregard arbitrarily the
unequivocal, uncontradicted and unimpeached testimony of an expert
witness,” it may “weigh the credibility of the witness” and “substitute its own
common-sense judgment for that of the experts.” 26 The district court rejected
First American’s appraisers’ valuations on the ground that the appraisals were
done “well in advance of the vessel[s’] sales” and that the Ocean Jewel had lost
value as a result of “Titan’s abysmal business performance and . . . the passage

24

First Am. Bank, 585 F.3d at 838.

25

Webster v. Offshore Food Serv., Inc., 434 F.2d 1191, 1193 (5th Cir. 1970).

Id.; see also Caboni v. General Motors Corp., 398 F.3d 357, 361 (5th Cir. 2005) (“The
trier of fact . . . is not bound by expert testimony and is entitled to weigh the credibility of all
witnesses, expert or lay.”).
26

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of time.” This conclusion is certainly reasonable, especially considering that
the Sapphire sold on the open market for $500,000, 75% less than the $2
million First American’s appraiser claimed it was worth at the time of the
bankruptcy. Aside from the appraisals, the only available evidence of the
Ocean Jewel’s value was the foreclosure sale price. As we made clear in the
first appeal, that price is relevant evidence of the vessel’s fair market value
that the district court must consider. 27 It was not error, much less clear error,
to find that the vessel’s value equaled its foreclosure sale price under the
circumstances.
V
First American next contends that, even if the district court correctly
calculated the value of the Ocean Jewel, it erroneously determined the amount
due under the policy that insured that vessel. First American argues that the
district court should have calculated the amount due under the Ocean Jewel
policy by taking the value of the Ocean Jewel ($6,450,000) and subtracting
from that figure the amount First American received from the foreclosure sale
($4,172,215). This calculation, First American asserts, would have yielded a
figure of $2,277,785, an amount well in excess of the $1,162,287 to which the
district court held First American was entitled.
As we have discussed, the Ocean Jewel policy does not provide for
FATTIC to pay First American the difference between the value of the ship
and the amount First American received from the foreclosure. Instead, the
policy lists nineteen covered risks and provides that the insurer’s liability shall
not exceed “[t]he difference between the value of the Title as insured and the
value of the Title subject to the defect, lien or encumbrance insured against by
this policy.”
27

First Am. Bank, 585 F.3d at 838.

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Although the Ocean Jewel sold for $6,450,000, the bankruptcy court,
with First American’s consent, ordered that $1,110,000 be carved out for the
benefit of the estate and that certain further funds be used to pay other
creditors. First American has not explained how this carve-out or the other
payments fall into one of the nineteen covered risks or were otherwise insured
under the policy.
VI
As its last challenge to the district court’s calculations, First American
asserts that the court erroneously deducted $88,712 from the value of the
Sapphire in calculating the amount due under the Shuttles policy. The district
court subtracted that sum on the ground that it equaled the extent of TBSR’s
credit-bid that “was designated as superpriority claims by the bankruptcy
court.” Such claims, the court reasoned, were not covered under the policy if
they were created after the policy’s date of issuance.
First American does not dispute that the bankruptcy court granted
TBSR a “superpriority” lien on the Sapphire or that such a lien is excluded
from coverage. It argues, however, that TBSR did not use the “superpriority”
lien to obtain the vessel but instead relied on its maritime lien resulting from
the provision of necessaries. Because the policies cover such necessaries liens,
the argument proceeds, the district court’s deduction of $88,712 from the
Sapphire’s value was in error.
Based on our review of the record, TBSR does not appear to have
asserted its “superpriority” lien in the in rem action against the Sapphire.
Rather, in its pleadings, TBSR consistently stated that it had a claim to the
vessel by virtue of its maritime lien from the provision of necessaries.
Likewise, when it requested permission to bid on the Sapphire, it asked to be
permitted to bid “in the amount of its maritime lien claims, $99,227.38.”
Nevertheless, even if the claims TBSR asserted against the Sapphire stemmed
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from its maritime liens, that does not mean that the district court’s finding as
to the value of First American’s covered loss is clearly erroneous.
As we have discussed, First American is due “the difference between the
value of First American’s ship mortgages when unencumbered and the value
of First American’s mortgages subject to the [covered] necessaries liens.” 28
Because of the bankruptcy court’s order, TBSR could have levied against the
Sapphire on the basis of its first-priority lien. The value of First American’s
mortgages as unencumbered (by covered defects) was thus not the full value of
the Sapphire since First American would not have been able to recover that
amount.

Rather, First American could only recover the full value of the

Sapphire minus the extent of the uncovered liens on the vessel. First American
does not dispute that TBSR held a first-priority lien for $88,712. Accordingly,
the district court did not commit reversible error in deducting that figure to
determine the amount due under the Shuttles policy.
VII
In addition to challenging the district court’s calculation of damages,
First American argues that the court erred in finding that FATTIC did not act
in bad faith in violation of Louisiana Revised Statutes § 22:1892.

First

American asserts that FATTIC acted arbitrarily in the processing of First
American’s claims because it did not remit payment under the Shuttles policy
until months after this court’s ruling in the first appeal.
Under Louisiana law, “A cause of action for penalties . . . requires a
showing that (1) an insurer has received satisfactory proof of loss, (2) the
insurer fails to tender payment within thirty days of receipt thereof, and (3)

28

Id. at 837.

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the insurer’s failure to pay is arbitrary, capricious or without probable cause.” 29
“The phrase ‘arbitrary, capricious, or without probable cause’ . . . describe[s]
an insurer whose willful refusal of a claim is not based on a good-faith
defense.” 30 As the Louisiana Supreme Court has clarified, “an insurer need
not pay a disputed amount in a claim for which there are substantial,
reasonable and legitimate questions as to the extent of the insurer’s liability
or of the insured’s loss.” 31

Whether an insured’s conduct is arbitrary or

capricious “depends on the facts known to the insurer at the time of its action.
. . . Because the question is essentially a factual issue, the trial court’s finding
should not be disturbed on appeal absent manifest error.” 32
The district court found that “FATTIC fulfilled most of its obligations
under the policies to the Bank, and that it did so in as timely a fashion as could
be expected in a case as complex as this.” This finding is not manifestly
erroneous. When Titan filed for bankruptcy, FATTIC promptly hired counsel
to represent First American’s interests. After counsel negotiated and settled
the necessary lien claims on the Ocean Jewel down to approximately
$1,162,287, FATTIC remitted that sum to First American. The payments for
the Shuttles took longer, but that delay was due to the greater factual and legal
uncertainty regarding the extent of coverage. Indeed, within three months of
learning that the Emerald had generated net proceeds of approximately
$445,137.50, FATTIC tendered that amount to the bank. That timeline was

Levy Gardens Partners 2007, L.P. v. Commonwealth Land Title Ins. Co., 706 F.3d
622, 635 (5th Cir. 2013) (alteration in original) (quoting La. Bag Co. v. Audubon Indem. Co.,
2008-0453, pp. 11-12 (La. 12/2/08); 999 So. 2d 1104, 1112-13).
29

30

Id. (alteration in original) (quoting La. Bag Co., 999 So. 2d at 1114).

31

La. Bag Co., 999 So. 2d at 1116.

Levy Gardens, 706 F.3d at 635 (alteration in original) (quoting Reed v. State Farm
Mut. Auto. Ins. Co., 2003-0107, p. 14 (La. 10/21/03); 857 So. 2d 1012, 1021).
32

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not arbitrary considering FATTIC paid the sum only fifteen days after
discovery concluded. Although FATTIC refused to tender $500,000 to First
American for the Sapphire, that refusal was based on good-faith claims
regarding the extent of First American’s coverage and the actual value of the
vessel. Accordingly, the district court did not commit manifest error in finding
that First American was not due any penalties under § 22:1892.
*

*

*

For the foregoing reasons, the judgment of the district court is
AFFIRMED.

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