Dubois et al v. Southern Fidelity Insurance Company

Filing 32

ORDER AND REASONS granting 15 Motion for Partial Summary Judgment. Signed by Judge Ivan L.R. Lemelle. (ijg)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
RACHEL DUBOIS, ET AL.

CIVIL ACTION

VERSUS

NO. 15-1097

SOUTHERN FIDELITY INSURANCE
COMPANY

SECTION "B"(2)

ORDER AND REASONS
I.

NATURE OF MOTION AND RELIEF SOUGHT
Before the Court is Defendant’s, Southern Fidelity Insurance

Company (“SFIC”), “Motion for Partial Summary Judgment” (Rec. Doc.
15), Plaintiffs’, Adrien Dubois and Rachel Dubois, opposition
thereto (Rec. Doc. 27), as well as Defendant’s reply (Rec. Doc.
31). Defendant SFIC seeks partial summary judgment pursuant to
Fed. R. Civ. P. 56(c), dismissing with prejudice at Plaintiffs’
costs Plaintiffs’ claims for statutory penalties and attorney fees
pursuant to La. Rev. Stat. § 22:1892 and La. Rev. Stat. § 22:1973.
As set forth more fully below, IT IS ORDERED that Defendant’s
Motion is GRANTED.
II.

FACTS AND PROCEDURAL HISTORY
The undisputed facts are as follows. Plaintiffs allege that

they

own

immovable

Properties”),

for

property

which

they

in

Jefferson

purchased

Parish

Louisiana

(“the

homeowners

policies of insurance from SFIC (“the Policies”). (Rec. Doc. 1-3

at 1).1 On February 24, 2013, the Properties allegedly suffered
extensive damages as a result of a hailstorm and Plaintiffs
subsequently met with adjusters assigned to them by SFIC. (Rec.
Doc. 1-3 at 2; Rec. Doc. 15-4 at 1). As will be discussed in
further detail, SFIC paid to Plaintiffs the undisputed amounts
that were published in the adjusters’ reports and, approximately
fifteen

months

later,

Plaintiffs

made

formal

demands

for

additional payment under the Policies. (Rec. Doc. 15-4 at 1-5).2
Plaintiffs have not received payment for those demands. (Rec. Doc.
1-3 at 1).
Prior

to

the

hailstorm

damage,

the

Properties

allegedly

sustained damages during Hurricane Isaac on August 29, 2012. (Rec.
Doc. 15-4 at 4). The Properties were then damaged by the hailstorm
approximately six months later and the respective notice of losses
for this event were filed on March 29, 2013 and April 2, 2013.
(Rec. Doc. 15-4 at 1-4). Pursuant to those notices, SFIC contacted
National Claims Adjusters, LLC to inspect the Properties and the
inspections subsequently took place on April 1, 2013 and April 4,
2013. (Rec. Doc. 15-4 at 1-4). On April 4, 2013 and April 5, 2013,

1

The properties and policies are as follows: 2832 Barataria Boulevard, Marrero,
Louisiana (Policy No. LVD 10060170117), 2838 Barataria Boulevard, Marrero,
Louisiana (Policy No. LVD 10060180117), 2900 Barataria Boulevard, Marrero,
Louisiana (Policy No. LVD 10060190117), 2904 Barataria Boulevard, Marrero,
Louisiana (Policy No. LVD 10079590017), and 2953 Mt. Kennedy Drive, Marrero,
Louisiana (Policy No. LVD 10051100117). (Rec. Doc. 1-3 at 1-2).
2 As will be discussed later, these demands reference the date of the hailstorm,
but state that they are pursuant to the “evaluation of the Hurricane Isaac
damage[.]” (Rec. Doc. 1-5 at 1; Rec. Doc. 1-6 at 1; Rec. Doc. 1-7 at 1; Rec.
Doc. 1-8 at 1; Rec. Doc. 1-9 at 1).
2

SFIC paid the undisputed amounts of damages listed in the reports,
less the recoverable depreciations and the deductibles. (Rec. Doc.
15-4 at 1-4).
After SFIC made payment to Plaintiffs, Plaintiffs contacted
Wolfman Construction on May 9, 2013 to prepare estimates for the
hailstorm

damage

to

the

Properties.

(Rec.

Doc.

15-4

at

5).

Plaintiffs did not immediately provide these estimates to SFIC and
instead

instituted

legal

proceedings

that

same

day,

seeking

payment for the Hurricane Isaac damages. (Rec. Doc. 15-4 at 4).
See also Dubois v. S. Fid. Ins. Co., No. 13-4859 (E.D. La.
dismissed Apr. 30, 2014). Though this suit was filed in the 24th
Judicial District Court for the Parish of Jefferson, it was removed
to this Court, where it was first dismissed without prejudice
pursuant to a settlement agreement on November 22, 2013, and later
dismissed with prejudice on April 30, 2014. See Notice of Removal,
Dubois, No. 13-4859 (Rec. Doc. 1-3 at 1); Order of Dismissal,
Dubois, No. 13-4859 (Rec. Doc. 11); Order, Dubois, No. 13-4859
(Rec. Doc. 14).
It was not until over two months after this final dismissal,
on July 10, 2014, that Plaintiffs made formal demands for payment
for hailstorm damages and provided SFIC with Wolfman’s estimates
– over one year after their initial preparation. (Rec. Doc. 15-4
at 5). Those demands referenced the date of the hailstorm, but
stated that they were pursuant to the “evaluation of the Hurricane

3

Isaac damage[.]” (Rec. Doc. 1-5 at 1; Rec. Doc. 1-6 at 1; Rec.
Doc. 1-7 at 1; Rec. Doc. 1-8 at 1; Rec. Doc. 1-9 at 1). On September
23, 2014, SFIC replied that Plaintiffs’ “claims [for Hurricane
Isaac damages against SFIC] were all settled during a settlement
conference conducted by the Magistrate Judge.” (Rec. Doc. 15-33 at
1). SFIC further stated that it was “investigating these hailstorm
claims while reserving all of its rights under the Policy.” (Rec.
Doc. 15-33 at 1). The communication from SFIC also referenced the
Plaintiffs’ duties under the Policies to submit to an examination
under oath (“EUO”), keep an accurate record of repair expenses,
and provide records and documents requested by SFIC. (Rec. Doc.
15-33 at 1). The Policies each have a provision that states that
“[n]o action can be brought [against SFIC] unless the policy
provisions have been complied with and the action is started within
two

years

after

the

date

of

loss.”

(Rec.

Doc.

15-4

at

6).

Plaintiffs do not dispute this provision nor do they dispute that
they provided no documentation at their EUOs. (Rec. Doc. 15-4 at
5).
On February 24, 2015, exactly two years after the hailstorm,
Plaintiffs filed suit in the 24th Judicial District Court for the
Parish

of

Jefferson.

(Rec.

Doc.

1-3;

Rec.

Doc.

15-4

at

1).

Plaintiffs allege that they are entitled to compensation for the
hailstorm damage under the Policies and that they are likewise
entitled to statutory penalties and attorney fees because SFIC

4

acted in an arbitrary and capricious manner by failing to make a
good

faith

tender

on

covered

losses.

(Rec.

Doc.

1-3

at

2).

Defendant SFIC removed the action to this Court based on 28 U.S.C.
§ 1331(a) and 28 U.S.C. § 1441(a), (b), as Plaintiff is domiciled
in Louisiana, Defendant is a foreign insurer that is incorporated
and has its principal place of business in Florida, and the
Plaintiffs’ estimate of damages exceeds $75,000,000. (Rec. Doc. 1
at 2-3).
III. CONTENTIONS OF MOVANT
Defendant argues that Plaintiffs have not provided sufficient
facts in order to recover statutory penalties and attorney fees,
primarily

because

they

have

not

proven

that

Defendant

acted

arbitrarily, capriciously, or without probable cause. In support
of this argument, Defendant maintains that it timely initiated
loss adjustment and timely evaluated and paid the claim. Defendant
also avers that Plaintiffs’ bad faith claim cannot be predicated
on a legitimate coverage dispute. Finally, Defendant argues that
Plaintiffs breached the Policies so as to manufacture the instant
claims.
IV.

CONTENTIONS OF OPPONENTS
Plaintiffs argue that Defendant’s motion lacks support as it

is based on the affidavit of an affiant with no personal knowledge
of the factual issues of the case, because he did not actually
inspect the Plaintiffs’ properties. Further, Plaintiffs aver that

5

Defendant’s conduct in failing to take action was clearly arbitrary
and capricious as Plaintiffs submitted proof of a claim with
documented

damages.

Alternatively,

Plaintiffs

contend

that

Defendant’s motion is premature because discovery in the case is
ongoing.
V.

SUMMARY JUDGMENT STANDARD
Summary judgment is proper if the pleadings, depositions,

interrogatory

answers,

and

admissions,

together

with

any

affidavits, show that there is no genuine issue as to any material
fact and that the moving party is entitled to judgment as a matter
of law.

Fed. R. Civ. P. 56; see also Celotex Corp. v. Catrett,

477 U.S. 317, 327 (1986).
would

allow

nonmovant.
(1986).

a

A genuine issue exists if the evidence

reasonable

jury

to

return

a

verdict

for

the

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248

Although the Court must consider the evidence with all

reasonable inferences in the light most favorable to the nonmoving
party, the nonmovant must produce specific facts to demonstrate
that a genuine issue exists for trial.

Webb v. Cardiothoracic

Surgery Assocs. of N. Texas, 139 F.3d 532, 536 (5th Cir. 1998).
The

moving

party

bears

the

initial

responsibility

of

informing the district court of the basis for its motion. Celotex,
477 U.S. at 323. The movant must point to “portions of ‘the
pleadings, depositions, answers to interrogatories, and admissions
on file, together with affidavits’ which it believes demonstrate

6

the absence of a genuine issue of material fact.” Id. (citing Fed.
R. Civ. P. 56). If and when the movant carries this burden, the
nonmovant must then go beyond the pleadings and use affidavits,
depositions,

interrogatory

responses,

evidence to establish a genuine issue.

admissions,

or

other

Matsushita Elec. Indus.

Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986).
“[W]here the non-movant bears the burden of proof at trial,
the movant may merely point to an absence of evidence, thus
shifting to the non-movant the burden of demonstrating by competent
summary judgment proof that there is an issue of material fact
warranting trial. . . . Only when ‘there is sufficient evidence
favoring the nonmoving party for a jury to return a verdict for
that party’ is a full trial on the merits warranted.” Lindsey v.
Sears Roebuck and Co., 16 F.3d 616, 618 (5th Cir. 1994) (citations
omitted). Accordingly, conclusory rebuttals of the pleadings are
insufficient to avoid summary judgment.

Travelers Ins. Co. v.

Liljeberg Enter., Inc., 7 F.3d 1203, 1207 (5th Cir. 1993).
VI.

DISCUSSION
Under Louisiana law, when an insurer fails to timely pay or

make an offer to settle an insured’s property damage claim, an
insured may recover statutory penalties and attorney fees in
addition to the amount found due. Such recovery is only permitted
in certain circumstances as governed by La. Rev. Stat. § 22:1892

7

and La. Rev. Stat. § 22:1973.3 Those statutes state, in relevant
part:
A. (1) All insurers issuing any type of
contract . . . shall pay the amount of any
claim due any insured within thirty days after
receipt of satisfactory proofs of loss from
the insured or any party in interest. . . .
(4) All insurers shall make a written offer to
settle any property damage claim, including a
third-party claim, within thirty days after
receipt of satisfactory proofs of loss of that
claim.
B. (1) Failure to make such payment within
thirty days after receipt of such satisfactory
written proofs and demand therefor or failure
to make a written offer to settle any property
damage claim . . . within thirty days after
receipt of satisfactory proofs of loss of that
claim, . . . when such failure is found to be
arbitrary, capricious, or without probable
cause, shall subject the insurer to a penalty,
in addition to the amount of the loss . . .
fifty percent of the difference between the
amount paid or tendered and the amount found
to be due as well as reasonable attorney fees
and costs [payable to the insured].
La. Stat. Ann. § 22:1892.
A. An insurer . . . owes to his insured a duty
of good faith and fair dealing. The insurer
has an affirmative duty to adjust claims
fairly and promptly and to make a reasonable
effort to settle claims with the insured or
the claimant, or both. Any insurer who
breaches these duties shall be liable for any
damages sustained as a result of the breach.
B. Any one of the following acts, if knowingly
committed
or
performed
by
an
insurer,
constitutes a breach of the insurer's duties
. . .
(5) Failing to pay the amount of any claim due
any person insured by the contract within
3

Previously cited as La. Rev. Stat. § 22:658 and La. Rev. Stat. § 22:1892,
respectively.
8

sixty days after receipt of satisfactory proof
of loss from the claimant when such failure is
arbitrary, capricious, or without probable
cause. . . .
C. In addition to any general or special
damages to which a claimant is entitled for
breach of the imposed duty, the claimant may
be awarded penalties assessed against the
insurer in an amount not to exceed two times
the damages sustained or five thousand
dollars, whichever is greater.
La. Stat. Ann. § 22:1973. An insured “seeking to recover under
these two statutes has the burden of establishing three things: 1)
that the insurer received a satisfactory proof of loss, 2) that
the insurer failed to pay the claim within the applicable statutory
period, and 3) that the insurer's failure to pay was arbitrary and
capricious.” Iteld v. Four Corners Const., L.P., 2013-0692, p. 16
(La. App. 4 Cir. 1/30/14); 133 So. 3d 312, 322; see also Anco
Insulations, Inc. v. Nat'l Union Fire Ins. Co. of Pittsburgh, Pa.,
787 F.3d 276, 285 (5th Cir. 2015).
Here, we need not assess the first two prongs of this test,
because Plaintiffs have failed to prove the third requirement –
that Defendant’s failure to pay was arbitrary, capricious, or
without probable cause. “The sanctions of penalties and attorney
fees are not assessed unless a plaintiff's proof is clear that the
insurer was in fact arbitrary, capricious, or without probable
cause in refusing to pay.” Lemoine v. Mike Munna, L.L.C., 20132187, p. 13 (La. App. 1 Cir. 6/6/14); 148 So. 3d 205, 215 (citing
Reed v. State Farm Mut. Auto. Ins. Co., 2003-0107, p. 13 (La.

9

10/21/03);
capricious,

857
or

So.

2d

without

1012,

1021).

probable

“The

cause’

phrase
is

‘arbitrary,

synonymous

with

‘vexatious,’ and a ‘vexatious refusal to pay’ means ‘unjustified,
without reasonable or probable cause or excuse.’” Id. (citing
Louisiana Bag Co. v. Audubon Indem. Co., 2008-0453, p. 14 (La.
12/2/08); 999 So. 2d 1104, 1114).
“An insurer does not act arbitrarily or capriciously when its
refusal to pay a claim is based on a genuine dispute over coverage
or the amount of the loss.” In re Chinese Manufactured Drywall
Products Liab. Litig., 759 F. Supp. 2d 822, 853 (E.D. La. 2010)
(citing Reed, 2003-0107, p. 13; 857 So. 2d at 1021). Accordingly,
“penalties should not be assessed when the insurer has a reasonable
basis to defend the claim and acts in good-faith reliance on that
defense.” Lemoine, 2013-2187, pp. 13-14; 148 So. 3d at 215 (citing
Louisiana Bag Co., 2008-0453, p. 14; 999 So. 2d at 1114). “[W]hen
there is a reasonable and legitimate question as to the extent and
causation of a claim, bad faith should not be inferred from an
insurer's failure to pay within the statutory time limits when
such reasonable doubts exist.” Id. at 14; 148 So. 3d at 215 (citing
Reed, 2003-0107, p. 13; 857 So. 2d at 1021). “In those instances
where there are substantial, reasonable, and legitimate questions
as to the extent of an insurer's liability or an insured's loss,
failure to pay within the statutory time period is not arbitrary,

10

capricious or without probable cause.” Id. (citing Louisiana Bag
Co., 2008-0453, p. 14; 999 So. 2d at 1114).4
Here, Plaintiffs have not come forth with any evidence to
support

the

capriciously,

assertion
or

without

that

Defendant

probable

cause.

acted

arbitrarily,

Plaintiffs’

initial

complaint and opposition to the instant motion are fleeting efforts
to

recover

evidence

additional

or

law.

funds

without

Plaintiffs’

only

providing
argument

any

supporting

revolves

around

challenging Defendant’s affiant who merely attests to the validity
of records supplied by Defendant. (Rec. Doc. 27 at 2). However, it
is not necessary that this Court assess the appropriateness of any
of

Defendant’s

affidavits

for

summary

judgment

grounds

when

Defendant has highlighted that Plaintiffs have not come forth with
any

evidence

to

support

the

allegation

that

Defendant

acted

arbitrarily, capriciously, or without probable cause. See Skotak
v. Tenneco Resins, Inc., 953 F.2d 909, 920 (5th Cir. 1992) (quoting
Fontenot v. Upjohn Co., 780 F.2d 1190, 1195 (5th Cir. 1986); citing
Celotex, 477 U.S. at 324) (“When the record is bare of evidence
that would support the pleading allegations of the plaintiff, a
defendant ‘may rely upon the complete absence of proof of an

4

See also Gaspard v. S. Farm Bureau Cas. Ins. Co., 2013-0800, p. 18 (La. App.
1 Cir. 9/24/14); 155 So. 3d 24, 38 (same); Mason v. Bankers Ins. Grp., 13-704,
p. 11 (La. App. 5 Cir. 1/31/14); 134 So. 3d 29, 35, writ denied, 2014-0433 (La.
5/2/14); 138 So. 3d 1246, and writ denied, 2014-0448 (La. 5/2/14); 138 So. 3d
1250 (same); Jouve v. State Farm Fire & Cas. Co., 2010-1522, p. 9 (La. App. 4
Cir. 8/17/11); 74 So. 3d 220, 226, writ denied, 2011-2250 (La. 11/23/11), 76
So. 3d 1157 (same).
11

essential element of the other party's case’ to satisfy this burden
and establish his right to summary judgment.”). To rebut this
absence of proof noted by Defendant, Plaintiffs state, “When proof
of claim [sic] with documented damages are submitted to an insurer
and no action is taken in response, that is clearly arbitrary and
capricious.” (Rec. Doc. 27 at 2). Plaintiff cites no law for this
assertion, likely because no such law exists.
Further, this Court notes that Plaintiffs’ own complaint, as
well as Defendant’s undisputed statement of uncontested material
facts, establish that Defendant had a reasonable basis to not
immediately pay or offer to settle Plaintiffs’ claims. First,
Plaintiffs’ initial complaint, which attached as exhibits the
demands for payment, made obvious that the demands were unclear as
they referenced the date of the hailstorm, but stated that they
were pursuant to the “evaluation of the Hurricane Isaac damage[.]”
(Rec. Doc. 1-5 at 1; Rec. Doc. 1-6 at 1; Rec. Doc. 1-7 at 1; Rec.
Doc. 1-8 at 1; Rec. Doc. 1-9 at 1). Second, Plaintiff has not
disputed Defendant’s statement of uncontested material facts,
which maintains that Defendant had already tendered payment to
Plaintiffs shortly after the hailstorm. (Rec. Doc. 15-4 at 1-4).
As such, there is evidence (though not required) to support that
Defendant had a reasonable basis to defend the claims and that
there was a genuine dispute over the amount of the loss so as to
bar the assessment of fees.

12

Finally, Plaintiffs state that “the plaintiffs have not been
deposed nor has [sic] any experts, defense or plaintiff.” (Rec.
Doc. 27 at 1). In light of this, Plaintiffs aver that Defendant’s
“motion is premature” because “discovery is ongoing in this case.
. . . So, in order for this court to be able to have all of the
evidence that will be used at trial and make a reasonable decision
on whether or not there are genuine issues of material fact that
exists [sic], discovery needs to be finalized.” (Rec. Doc. 27 at
3). This argument is unpersuasive based on applicable law and the
history of this case.
Under Rule 56(d), “[i]f a nonmovant shows by affidavit or
declaration that, for specified reasons, it cannot present facts
essential to justify its opposition, the court may: (1) defer
considering the motion or deny it; (2) allow time to obtain
affidavits or declarations or to take discovery; or (3) issue any
other appropriate order.” Fed. R. Civ. P. 56(d). Rule 56(d) motions
are “broadly favored and should be liberally granted.” Raby v.
Livingston, 600 F.3d 552, 561 (5th Cir. 2010). However, the Rule
56(d) movant “must set forth a plausible basis for believing that
specified facts, susceptible of collection within a reasonable
time frame, probably exist and indicate how the emergent facts, if
adduced, will influence the outcome of the pending summary judgment
motion.” Id.

13

Though

Rule

56(d)

motions

are

“broadly

favored”

and

“liberally granted[,]” id., the Court finds such relief is not
warranted here. Of particular import, Plaintiffs have not actually
filed a motion pursuant to Rule 56(d). The Fifth Circuit recently
declined to grant relief available under Rule 56(d) when no such
motion was actually filed. See Squyres v. Heico Companies, L.L.C.,
782 F.3d 224, 238 (5th Cir. 2015) (declining to grant Appellant
relief when he “never filed a Rule 56(d) motion in response to
Appellees' motion for summary judgment, and [did] not identif[y]
any discovery that he was unable to take”).
Additionally,

Plaintiffs

have

merely

suggested

that

“discovery is ongoing” and “this motion is premature” (Rec. Doc.
27 at 3), but have not “set forth a plausible basis for” this Court
to believe that there are “specified facts” that “probably exist”
and “will influence the outcome of the pending summary judgment
motion.” Raby, 600 F.3d at 561. Plaintiffs have not pointed to
specific facts that they believe are discoverable and dispositive
to this motion. See Martins v. BAC Home Loans Servicing, L.P., 722
F.3d 249, 257 (5th Cir. 2013) (denying Rule 56(d) motion when party
“did not articulate specifically what facts he needed to respond
to the motion”).
Finally, this Court’s Scheduling Order states, “Depositions
for use at trial shall be taken and all discovery shall be
completed no later than JANUARY 19, 2016.” (Rec. Doc. 7 at 1)

14

(emphasis added). It goes on to state that “[a]ll case-dispositive
pre-trial motions, along with motions in limine regarding the
admissibility of expert testimony, shall be filed and served in
sufficient time to permit hearing thereon no later than JANUARY
22, 2016.” (Rec. Doc. 7 at 1) (emphasis added). The Order warns,
“Deadlines, cut-off dates, or other limits fixed herein may only
be extended by the Court upon timely motion and upon a showing of
good

cause.”

(Rec.

Doc.

7

at

3).

Though

this

Court

granted

Plaintiffs’ “Unopposed Motion to Continue Trial” (Rec. Doc. 22),
that Order continued solely the trial and pre-trial conference
dates and specified that “counsel is warned that such changes are
not to impact other pre-trial deadlines and cancellation of pretrial work that causes an unsanctioned extension of court order
deadlines will not be tolerated.” (Rec. Doc. 28). It further stated
that “[a] ll other deadlines set by this Court’s Order (Rec. Doc.
7) and the Federal Rules of Civil Procedure remain the same.” (Rec.
Doc. 28).
Plaintiffs’ opposition, alleging that discovery was “ongoing”
and that the motion was consequently “premature,” was filed on
Friday, January 15, 2016 at 1:08 p.m. CT. (See Rec. Doc. 27). As
such, Plaintiffs’ opportunity to complete the “ongoing” discovery
had almost lapsed at the time of filing the instant opposition and
has most certainly expired now. Likewise, Defendant set its Motion
for submission on January 20, 2016 (the last available motion

15

submission date prior to the deadline established by the Court’s
Scheduling Order) and filed it on January 5, 2016 (the last
available date for the submission of a motion pursuant to the Local
Rules). This Court fails to find such a motion “premature.”
Plaintiffs did not move to continue these deadlines, nor do they
provide any explanation that would prompt such relief.
VII. CONCLUSION
Accordingly, and for the reasons set forth more fully above,
IT IS ORDERED that Defendant’s Motion for Partial Summary Judgment
is GRANTED and Plaintiffs’ claims for statutory penalties and
attorney fees are DISMISSED WITH PREJUDICE, at Plaintiffs’ costs.
New Orleans, Louisiana, this 28th day of January, 2016.

_______________________________
UNITED STATES DISTRICT JUDGE

16