Wells v. State Farm Fire and Casualty Company

Filing 115

ORDER denying defendant's 45 Motion for Partial Summary Judgment, as stated herein. Signed by Judge Susie Morgan on 11/12/2013. (tsf)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
MCREYNOLD WELLS,
Plaintiff

CIVIL ACTION

VERSUS

NO. 13-120

STATE FARM FIRE AND
CASUALTY COMPANY,
Defendant

SECTION “E”

ORDER
Before the Court is Defendant’s motion for partial summary on its counterclaim
against Plaintiff for nonpayment of the mortgage note on the property at issue, which note
Defendant received after it paid off the original mortgage holder.1 Plaintiff opposes the
motion, and his opposition is well taken.2 The amount, if any, Defendant is entitled to
recover in its suit on the note turns on the determination of the disputed issue whether
Defendant was entitled to deny Plaintiff’s insurance claim. If the jury finds Plaintiff
committed arson, then Defendant may be entitled to collect under the terms of the note.
If the jury finds Plaintiff did not commit arson and Defendant wrongfully withheld
insurance payment, causing the note to be assigned to Defendant and various penalties and
interest to accrue, Defendant would, at a minimum, not be entitled to collect the penalties
and interest under the note that Defendant’s wrongful actions caused to accrue.3
1

R. Doc. No. 45.

2

R. Doc. No. 61.

3

The policy between Plaintiff and Defendant itself contemplates this result.
Defendant becomes “subrogated to all the rights of the mortgagee granted
under the mortgage” and is entitled to “pay to the mortgagee the whole
principal on the mortgage plus any accrued interest . . . . [and] receive a
full assignment and transfer of the mortgage and all securities held as
collateral to the mortgage debt” only if Defendant “pay[s] the mortgagee”
after (implicitly, properly) “deny[ing] payment to” Plaintiff. To allow
1

Accordingly, Defendant’s motion for summary judgment is DENIED.4
IT IS SO ORDERED.
New Orleans, Louisiana, this 12th day of November, 2013.

_____________________________
SUSIE MORGAN
UNITED STATES DISTRICT JUDGE

Defendant wrongfully to withhold payment under the policy but still take
advantage of this provision would be unconscionable and against public
policy.
4

Defendant’s request, though not a motion, to strike certain exhibits from
Plaintiff’s opposition is DISMISSED AS MOOT. The exhibits were not
necessary to resolution of Defendant’s motion.
2