Cazenave v. ANPAC Louisiana Insurance Company et al

Filing 65

ORDER DENYING 41 Motion for Summary Judgment on Insurer Penalties. Signed by Judge Nannette Jolivette Brown on 12/20/2016. (mmv)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
CAZENAVE

CIVIL ACTION

VERSUS

CASE NO. 16-1420

ANPAC LOUISIANA INSURANCE

SECTION: “G”(2)

COMPANY, et al.
ORDER
Pending before the Court is Defendant GEICO Casualty Company’s (“GEICO”) “Motion
for Summary Judgment on Insurer Penalties.”1 Having considered the motion, the memoranda in
support and in opposition, the applicable law, and the record, the Court will deny the motion.
I. Background
This litigation arises out of an automobile accident, which occurred on April 12, 2015.2
Plaintiff Christopher Cazenave (“Plaintiff”) alleges that he sustained “severe and disabling”
injuries while he was a passenger in a vehicle that was struck by an allegedly drunken driver,
Defendant Nicholas F. Echeagaray (“Echeagaray”).3 On October 20, 2015, Plaintiff filed suit in
state court against Defendants Echeagaray, ANPAC Louisiana Insurance Company (“ANPAC”),
Progressive County Mutual Insurance Company (“Progressive”), and GEICO.4 On December 16,

1

Rec. Doc. 41.

2

Rec. Doc. 1-2 at 7.

3

Id.

4

Id. at 7–8.

1

2015, Defendants Echeagaray and ANPAC were dismissed from the suit.5 Defendant Progressive
removed the action to this Court on February 19, 2016.6 On December 2, 2016, Plaintiff and
Progressive reached a settlement, and the Court dismissed all of Plaintiff’s claims against
Progressive.7 The sole remaining Defendant in this action is GEICO, Plaintiff’s insurer. Plaintiff
alleges that GEICO had an automobile public liability policy containing uninsured motorist
coverage and medical payments coverage in favor of Plaintiff and that the policy inures to
Plaintiff’s benefit due to the underinsured status of Echeagaray.8 GEICO filed the instant motion
on October 27, 2016.9 Plaintiff filed an opposition on November 10, 2016.10 With leave of Court,
GEICO filed a reply on November 22, 2016.11
II. Parties’ Arguments
A.

GEICO’s Arguments in Support of the Motion for Partial Summary Judgment
In its motion, GEICO argues that it is entitled to summary judgment on Plaintiff’s claim

for insurer penalties.12 GEICO asserts that Plaintiff cannot prove the essential prerequisite of
having submitted satisfactory proof of loss and that Plaintiff’s claim for insurer penalties should
be dismissed as a result.13 GEICO avers that Plaintiff’s claim for insurer penalties is premised upon

5

Rec. Doc. 1 at 4.

6

Id.

7

Rec. Docs. 59, 60.

8

Id. at 8.

9

Rec. Doc. 41.

10

Rec. Doc. 46.

11

Rec. Doc. 57.

12

Rec. Doc. 41-1 at 1.

13

Id.

2

alleged violations of Louisiana Revised Statutes §§ 22:1892 and 22:1973 through the “failure to
make unconditional tender of benefits under the uninsured motorist coverage following alleged
submission of satisfactory proof of loss.”14 GEICO represents that a claimant for penalties and
attorney’s fees has the burden of proving that the insurer failed to pay the claim within the requisite
time limit after receiving satisfactory proof of loss and that the insurer was arbitrary or capricious
in failing to pay.15 To establish satisfactory proof of loss of an uninsured motorist claim, GEICO
argues, the insured must establish that the insurer received sufficient facts which fully apprised the
insurer that: (1) the owner or operator of the other vehicle involved in the accident was uninsured
or underinsured; (2) that he was at fault; (3) that such fault gave rise to damages; and (4) establish
the extent of those damages.16
GEICO represents that the insurer penalty statutes are penal in nature and should be strictly
construed such that sanctions should be imposed only in those instances in which the facts negate
probable cause for nonpayment.17 According to GEICO, when 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.18 GEICO further asserts that where a reasonable
disagreement exists between the insured and the insurer as to the amount of a loss, the insurer’s
refusal to pay is not arbitrary, capricious, or without probable cause, and failure to pay within the

14

Id. at 2.

15

Id. (citing Hart v. Allstate Ins. Co., 437 So.2d 823 (La. 1983)).

16

Id. (citing McDill v. Utica Mutual Ins. Co., 475 So.2d 1085 (La. 1985)).

17

Id. (citing Louisiana Bag Co., Inc. v. Audubon Indemnity Co., 08-0453 (La. 12/2/08), 999 So.2d 1104).

18

Id. at 3 (citing Reed v. State Farm Auto. Ins. Co., 03-0107 (La. 10/21/03), 857 So.2d 1012).

3

statutory delay does not subject the insurer to penalties.19 GEICO argues that a party seeking
insurer penalties bears the burden of showing that the insurer received satisfactory proof of loss.20
GEICO further argues that summary dismissal of insurer penalty claims is appropriate where an
essential element of satisfactory proof of loss is subject to genuine doubt or dispute.21
GEICO avers that the element of satisfactory proof of loss that Plaintiff has failed to satisfy
is the extent of his damages, “which do not clearly exceed the tortfeasor’s underlying $250,000 of
liability insurance.”22 According to GEICO, Plaintiff claims that he has sustained a knee injury
and a low back injury, has incurred $36,922 in post-accident medical expenses, and will need
treatment in the future.23 GEICO argues that Plaintiff’s showing is “far, far insufficient to
constitute satisfactory proof of loss that reasonable minds could not differ that his damages are in
excess of $250,000, as is necessary to warrant an unconditional tender.”24
GEICO notes that the range of awards for Plaintiff’s claimed injuries is large, “reflecting
the fact-finder’s vast discretion in assessing damages.”25 GEICO further asserts that there are

19

Id. (citing Maloney Cinque, LLC v. Pacific Ins. Co., 2011-0787 (La. App. 4th Cir. 1/25/12), 89 So.3d

20

Id. at 3–4 (citing Reed v. State Farm Auto. Ins. Co., 03-0107 (La. 10/21/03), 857 So.2d 1012).

12).

21
Id. at 4 (citing Drago v. Sykes, No. 13-563, 2013 WL 6665711, at *1 (E.D. La. Dec. 17, 2013)
(Engelhardt, J.); Schlosser v. Metro. Prop. & Cas. Ins. Co., No. 12-1301, 2012 WL 4471862, at *1 (E.D. La. Sept.
27, 2012) (Vance, J.); Johnson v. State Farm Mut. Auto. Ins. Co., No. 11-1991, 2012 WL 1745497, at *1 (E.D. La.
May 16, 2012) (Africk, J.); Morris v. Liberty Mut. Ins. Co., No. 08-4247, 2010 WL 3942898, at *1 (E.D. La. Oct. 5,
2010) (Berrigan, J.)).
22

Id.

23

Id. at 4–5.

24

Id. at 5.

25

Id.

4

issues of causation in this case.26 According to GEICO, a doctor who examined Plaintiff concluded
that Plaintiff’s knee problems largely consist of preexisting degenerative changes and did not find
any objective evidence of lumbar spine problems.27 While Plaintiff may recover a judgment,
GEICO argues, he cannot recover insurer penalties due to a dispute over the extent of his damages
and the lack of satisfactory proof of loss.28
GEICO contends that although Plaintiff may claim that his damages are astronomical and
the jury might agree, he must show that there is an amount to which he was entitled under the
uninsured motorist coverage over which reasonable minds could not differ in order to recover
insurer penalties.29 GEICO argues that Plaintiff’s claimed injuries do not have a “minimum value
above $250,000, or anywhere near that amount.”30 Because, GEICO argues, reasonable minds
could differ as to the amount due Plaintiff and Plaintiff has not established satisfactory proof of
loss above $250,000 as a matter of law, GEICO is entitled to summary dismissal of the insurer
penalty claim.31
B.

Plaintiff’s Arguments in Opposition to the Motion for Partial Summary Judgment
In his opposition, Plaintiff contends that partial summary judgment should be denied,

because a genuine factual dispute exists as to whether Plaintiff has submitted satisfactory proof of

26

Id. at 6.

27

Id.

28

Id. at 7.

29

Id.

30

Id.

31

Id.

5

loss to require a good faith tender.32 Plaintiff asserts that he has already submitted sufficient
evidence for a reasonable jury to easily conclude that GEICO was in bad faith in failing to make a
tender, including medical evidence, bills, physical reports, forensic economic reports, and
testimony of treating physicians.33 According to Plaintiff, a report by a forensic economic expert,
which was provided to GEICO before the filing of its summary judgment motion, shows that
Plaintiff’s future medical costs alone far exceed $250,000 and that those costs have since increased
even further.34
Plaintiff further asserts that the cases cited by GEICO for the proposition that the plaintiff
has the burden of proving that he has provided defendant with a satisfactory proof of loss to
establish a bad faith claim were all cases decided at trial, not at summary judgment.35 According
to Plaintiff, the low verdicts cited by GEICO were for cases with very different facts.36 Plaintiff
argues that in spite of the information provided to GEICO regarding Plaintiff’s damages, no
unconditional tender has been made to Plaintiff.37 Whether or not GEICO was in bad faith in their

32

Rec. Doc. 46 at 1.

33

Id. at 1–2.

34

Id. at 5 (citing Rec. Doc. 46-2). Although GEICO argues that Plaintiff must demonstrate that he
submitted evidence that his damages exceeded $250,000, the parties appear to agree that the threshold at this point
in the litigation is actually $285,055 (the amount that Plaintiff has already received from the parties dismissed from
the suit plus $5,000 in medical pay coverage that GEICO has already provided to Plaintiff). See Rec. Doc. 41-1 at 5
n.1, Rec. Doc. 46 at 5.
35

Id. at 5–6 (citing Hart v. Allstate Ins. Co., 437 So.2d 823 (La. 1983); McDill v. Utica Mutual Ins. Co.,
475 So.2d 1085 (La. 1985); Louisiana Bag Co., Inc. v. Audubon Indemnity Co., 08-0453 (La. 12/2/08), 999 So.2d
1104; Reed v. State Farm Auto. Ins. Co., 03-0107 (La. 10/21/03), 857 So.2d 1012; Maloney Cinque, LLC v. Pacific
Ins. Co., 2011-0787 (La. App. 4th Cir. 1/25/12), 89 So.3d 12).
36

Id. at 6.

37

Id.

6

failure to make an unconditional tender, Plaintiff argues, is a question of fact and summary
judgment on the issue should be denied.38
C.

Defendant’s Arguments in Further Support of Partial Summary Judgment
In reply, GEICO argues that the issue is whether Plaintiff presented satisfactory proof of

loss so as to require an unconditional tender of some payment under the uninsured motorist
coverage and that Plaintiff has failed to do so.39 “Satisfactory proof of loss,” GEICO argues,
requires clear evidence that Plaintiff sustained damages due to the accident in “an amount over
which reasonable minds could not differ” in excess of the underlying liability policy limits of
$250,000.40 GEICO contends that the uncontested minimal amount due for Plaintiff’s claimed
injuries is far short of the $250,000 threshold such that the insurer penalty claim must be dismissed
as a matter of law.41 According to GEICO, the issue here is not whether the jury could award
damages in excess of $250,000, but rather, whether Plaintiff has established that reasonable minds
could not differ in concluding that his damages are more than $250,000, which would trigger
GEICO’s unconditional obligation to tender payment of the uninsured motorist coverage.42
GEICO argues that the testimony and evidence cited by Plaintiff in his opposition does not
support the assertion of a penalty claim filed six months ago.43 GEICO asserts that Plaintiff has
the burden to prove that he submitted satisfactory proof of loss and that “the assertion of a

38

Id.

39

Rec. Doc. 57 at 1.

40

Id.

41

Id.

42

Id. at 2.

43

Id. at 3.

7

contested claim of speculative future medical costs cannot satisfy that burden.”44 Because, GEICO
argues, Plaintiff has the burden of proving bad faith, the existence of reasonable doubts as to the
extent and causation of a claim acts as a barrier to recovery of penalties.45 According to GEICO,
Plaintiff’s penalty claim is dependent on proof that some payment was uncontestably due under
the uninsured motorist coverage but that Plaintiff’s claim for damages is contested on the merits.46
As a result, GEICO argues, Plaintiff’s penalty claim should be dismissed as a matter of law.47
III. Law and Analysis
A.

Legal Standard on Summary Judgment
Summary judgment is appropriate when the pleadings, the discovery, and any affidavits

show that “there is no genuine dispute as to any material fact and the movant is entitled to judgment
as a matter of law.”48 When assessing whether a dispute as to any material fact exists, a court
considers “all of the evidence in the record but refrains from making credibility determinations or
weighing the evidence.”49 All reasonable inferences are drawn in favor of the nonmoving party,
but “unsupported allegations or affidavits setting forth ‘ultimate or conclusory facts and
conclusions of law’ are insufficient to either support or defeat a motion for summary judgment.”50
If the record, as a whole, could not lead a rational trier of fact to find for the non-moving party,

44

Id.

45

Id.

46

Id.

47

Id.

48

Fed. R. Civ. P. 56(a); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322–23 (1986); Little v. Liquid Air
Corp., 37 F.3d 1069, 1075 (5th Cir. 1994).
49

Delta & Pine Land Co. v. Nationwide Agribusiness Ins. Co., 530 F.3d 395, 398–99 (5th Cir. 2008).

50

Galindo v. Precision Am. Corp., 754 F.2d 1212, 1216 (5th Cir. 1985); Little, 37 F.3d at 1075.

8

then no genuine issue of fact exists and the moving party is entitled to judgment as a matter of
law.51
On a motion for summary judgment, the moving party bears the initial burden of
identifying those portions of the record that it believes demonstrate the absence of a genuine issue
of material fact.52 Where, as here, the non-moving party bears the burden of proof at trial, the party
moving for summary judgment may meet its burden by showing the Court that there is an absence
of evidence to support the non-moving party’s case.53 Thereafter, if the moving party satisfies its
initial burden, the burden shifts to the non-moving party to “identify specific evidence in the
record, and articulate” precisely how that evidence supports his claims.54 In doing so, the nonmoving party may not rest upon mere allegations or denials in his pleadings, but rather must set
forth “specific facts showing the existence of a ‘genuine’ issue concerning every essential
component of its case.”55 The nonmovant’s burden of demonstrating a genuine issue of material
fact is not satisfied merely by creating “some metaphysical doubt as to the material facts,” “by
conclusory allegations,” by “unsubstantiated assertions,” or “by only a scintilla of evidence.”56

51

Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 586 (1986).

52

Celotex, 477 U.S. at 323.

53

Id. at 325.

54

Forsyth v. Barr, 19 F.3d 1527, 1537 (5th Cir. 1994), cert. denied, 513 U.S. 871 (1994); see also Morris v.
Covan World Wide Moving, Inc., 144 F.3d 377, 380 (5th Cir. 1998).
55

Morris, 144 F.3d at 380 (citing Thomas v. Price, 975 F.2d 231, 235 (5th Cir. 1992)); see also Bellard v.
Gautreaux, 675 F.3d 454, 460 (5th Cir. 2012).
56

Little, 37 F.3d at 1075.

9

There is no genuine issue for trial “unless there is sufficient evidence favoring the nonmoving
party for a jury to return a verdict for that party.”57
B.

Applicable State Law Regarding Insurer Penalties
Louisiana law authorizes the recovery of bad faith penalties from insurers under two

provisions. Under Louisiana Revised Statute § 22:1892(A)(1), “all insurers . . . shall pay the
amount of any claim due any insured within thirty days after receipt of satisfactory proofs of loss
from the insured.”58 If an insurer refuses to pay a claim within thirty days of receiving satisfactory
proof of loss, then § 22:1892(B)(1) provides that the insurer is subject to penalties if its conduct is
“found to be arbitrary, capricious, or without probable cause.”59 Additionally, § 22:1973 requires
insurers to act in good faith and provides for penalties if an insurer fails to pay a claim within sixty
days after receipt of satisfactory proof of loss when “such failure is arbitrary, capricious, or without
probable cause.”60 These statutes prohibit “virtually identical” conduct, and the primary difference
between them is the time period allowed for payment.61
The insured who claims penalties “has the burden of proving that the insurer received
‘satisfactory proof of loss’ as a necessary predicate to a showing that the insurer was arbitrary,
capricious, or without probable cause.”62 Satisfactory proof of loss is a showing “sufficient to

57

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986) (citing First Nat’l Bank of Ariz. v. Cities Serv.
Co., 391 U.S. 253, 288–89 (1968)).
58

La. Rev. Stat. Ann. § 22:1892(A)(1).

59

La. Rev. Stat. Ann. § 22:1892(B)(1).

60

La. Rev. Stat. Ann. § 22:1793 (B)(5).

61

See Johnson v. State Farm Mut. Auto. Ins. Co., No. 11-1991, 2012 WL 1745497, at *4 (E.D. La. May 16,
2012) (Africk, J.) (citing Korbel v. Lexington Ins. Co., 308 Fed. App’x 800, 803 (5th Cir. 2009)).
62
Schlosser v. Metro. Prop. & Cas. Ins. Co., No. 12-1301, 2012 WL 4471862, at *2 (E.D. La. Sept. 27,
2012) (Vance, J.) (quoting Hart v. Allstate Ins. Co., 437 So.2d 823, 828 (La. 1983)).

10

apprise the insurer of the insured’s claim.”63 A plaintiff who invokes an uninsured motorist
provision must establish that he is “legally entitled to recover.”64 This requires that the “insurer
received sufficient facts which fully apprise the insurer” of four elements: “(1) that the owner or
operator of the other vehicle involved in the accident was uninsured or underinsured; (2) that he
was at fault; (3) that such fault gave rise to damages; and (4) establish the extent of those
damages.”65
Both § 22:1892 and § 22:1973 are to be “strictly construed and should not be invoked when
the insurer has a reasonable basis for denying coverage.”66 “Whether or not a refusal to pay is
arbitrary, capricious, or without probable cause depends on the facts known to the insurer at the
time of its action . . . .”67 A determination of whether an insurer’s failure to pay a claim was
arbitrary and capricious is a finding of fact.68 Summary judgment is not appropriate when a claim
for bad faith penalties depends on factual determinations concerning the reasonableness of the
insurer’s actions.69 Summary judgment is appropriate, however, when there is no evidence of an
insurer’s bad faith conduct.70

63

Id. (quoting Hart v. Allstate Ins. Co., 437 So.2d 823, 828 (La. 1983)).

64

Id.

65

Id. (quoting McDill v. Utica Mut. Ins. Co., 475 So.2d 1085, 1089 (La. 1985)).

66

Id. (quoting In re Hannover Corp., 67 F.3d 70, 73 (5th Cir. 1995)).

67

Johnson v. State Farm Mut. Auto. Ins. Co., No. 11-1991, 2012 WL 1745497, at *4 (E.D. La. May 16,
2012) (Africk, J.) (quoting Reed v. State Farm Auto. Ins. Co., 03-0107 (La. 10/21/03), 857 So.2d 1012, 1021).
68

Id.

69
Id. (citing Hartenstein v. State Farm Fire and Cas. Ins. Co., No. 07-4594, 2008 WL 2397713, at *3 & n.
22 (E.D. La. June 10, 2008) (Africk, J.)).
70

Id. See also Hartenstein v. State Farm Fire and Cas. Ins. Co., No. 07-4594, 2008 WL 2397713, at *3
(E.D. La. June 10, 2008) (Africk, J.) (citing Gates v. Auto Club Family Ins. Co., No. 06-4394, 2007 WL 1464259, at
*4 (E.D. La. May 17, 2007)).

11

C.

Analysis
GEICO argues that Plaintiff is not entitled to pursue a claim for insurer penalties, because

he has failed to apprise GEICO of the extent of his damages as required to establish satisfactory
proof of loss.71 GEICO argues that the low end of the range of permissible jury awards for
Plaintiff’s injuries falls below $250,000 and that its September 13, 2016, expert report found “no
objective evidence” of lumbar spine problems and indicated that Plaintiff’s knee problems consist
of preexisting degenerative changes.72 Plaintiff asserts, and GEICO does not dispute, that he has
provided GEICO with medical evidence, bills, physician reports, forensic economic reports, and
testimony. 73 Plaintiff argues that he has provided GEICO with sufficient facts to apprise GEICO
of the extent of his damages.74 GEICO does not argue that Plaintiff has failed to satisfy any of the
other elements required for satisfactory proof of loss, i.e. that the owner or operator of the other
vehicle involved in the accident was uninsured or underinsured; that he was at fault; or that such
fault gave rise to damages.75
In order to sustain his claim for insurer penalties, Plaintiff must show that he has provided
evidence to GEICO to apprise it of the extent of his injuries.76 Although summary judgment on an
insurer penalty claim is appropriate where the plaintiff has produced no evidence of an insurer’s
bad faith conduct,77 summary judgment is not appropriate where a claim for bad faith penalties
71

Rec. Doc. 41-1 at 4.

72

Id. at 4–6.

73

Rec. Doc. 46 at 1–2.

74

Id.

75

See McDill v. Utica Mut. Ins. Co., 475 So.2d 1085, 1089 (La. 1985).

76

Id.

77

See, e.g., Gates v. Auto Club Family Ins. Co., No. 06-4394, 2007 WL 1464259, at *4 (E.D. La. May 17,

12

depends on factual determinations concerning the reasonableness of the insurer’s actions.78 Here,
Plaintiff has shown that he provided proof of loss for which GEICO did not pay.79 The record
indicates that Plaintiff provided GEICO with medical records, as well as reports from Plaintiff’s
treating physician, treating neurosurgeon, and treating chiropractor.80 The record indicates that
Plaintiff filed his initial claim over six months ago and that GEICO received supplemental
evidence about Plaintiff’s damages on October 5, 2016.81 Additionally, Plaintiff asserts, and
GEICO does not dispute, that he provided GEICO with a forensic economic report on October 17,
2016,82 showing that Plaintiff’s future medical costs alone exceed $250,000.83
GEICO does not assert that Plaintiff has submitted no evidence of damages exceeding
$250,000, and the parties do not dispute that GEICO has not paid Plaintiff’s claim for damages
that was filed over six months ago.84 Instead, GEICO argues that there is a reasonable dispute as
to the extent of damages, because: (1) the low end of the range of permissible jury awards for

2007); Johnson v. State Farm Mut. Auto. Ins. Co., No. 11-1991, 2012 WL 1745497, at *6 (E.D. La. May 16, 2012)
(Africk, J.).
78
See Hartenstein v. State Farm Fire and Cas. Ins. Co., No. 07-4594, 2008 WL 2397713, at *3 (E.D. La.
June 10, 2008) (Africk, J.); Grilleta v. Lexington Ins. Co., 558 F.3d 359, 368 (5th Cir. 2009) (A determination of
whether an insurer’s failure to pay a claim was arbitrary and capricious is a finding of fact.).
79

Id. (emphasis added).

80

Rec. Doc. 41-2 at 2–4.

81

Id. at 1.

82

Rec. Doc. 46-2 at 1. Plaintiff also asserts, and GEICO does not dispute, that he provided an updated
forensic economic report and updated medical costs from medical providers to GEICO. See Rec. Doc. 46-3.
83

Rec. Doc. 41-1 at 5 n.1.

84

Although the parties do not provide an exact date for the filing of Plaintiff’s initial claim with GEICO,
the parties do not dispute that it was filed before Plaintiff’s first amended complaint in this matter, which was filed
on May 18, 2016. See Rec. Doc. 23.

13

Plaintiff’s injuries falls below the required threshold;85 and (2) its expert found that there was no
objective evidence of lumbar spine problems and that Plaintiff’s knee problem largely consists of
preexisting degenerative changes.86 However, GEICO does not cite to any case law for the
proposition that past jury awards should be considered by courts in determining whether a plaintiff
has submitted evidence of an insurer’s bad faith and admits that a jury could award Plaintiff
damages in excess of the required threshold.87
Moreover, Plaintiff submitted his claim to GEICO over six months ago, but the record
indicates that GEICO’s expert report was not completed until four months later in September
2016.88 GEICO does not offer an explanation for its failure to pay Plaintiff within the statutory
limits and before the completion of its expert report, aside from the fact that the “low end of the
range of permissible awards” for the injuries claimed by Plaintiff falls below the required
threshold.89 The record also indicates that Plaintiff submitted supplemental evidence to GEICO
that his damages exceeded $250,000 on October 17, 2016,90 and there is no indication in the record
before the Court that GEICO’s September 2016 expert report was updated to address, much less
contradict, Plaintiff’s supplemental evidence of the extent of his damages. GEICO argues that
Plaintiff’s supplemental evidence is irrelevant, because it cannot “retroactively require an
unconditional tender.”91 However, GEICO does not explain how its own report, which was
85

Id. at 4–5.

86

Id. at 6.

87

Rec. Doc. 41-1 at 5; Rec. Doc. 57 at 2.

88

Rec. Doc. 41-2 at 1.

89

Rec. Doc. 41-1 at 4.

90

See Rec. Doc. 46-2.

91

Rec. Doc. 57 at 3.

14

completed at least four months after Plaintiff’s claim was filed, can retroactively put the extent of
damages in reasonable dispute and provide a reasonable basis for its rejection of Plaintiff’s claim.
GEICO cites to decisions from courts in the Eastern District of Louisiana for the
proposition that summary judgment of insurer penalty claims is appropriate where an essential
element of satisfactory proof of loss is subject to genuine doubt or dispute.92 None of the cases
cited by GEICO, however, involved a determination as to the reasonableness of an insurer’s
decision to dispute the extent of damages based on its expert report. Rather, those cases involved
issues of causation, fault, eligibility for damages, wavier of uninsured motorist coverage, and
suspected insurance fraud.93 The present case is more analogous to Hartenstein v. State Farm Fire
and Casualty Insurance Company.94 In that case, the plaintiff presented the insurer with
information from an expert report regarding roof damage that contradicted the insurer’s expert
report.95 The insurer argued that it was entitled to summary judgment on the plaintiff’s bad faith

92

Id. at 4 (citing Drago v. Sykes, No. 13-563, 2013 WL 6665711, at *1 (E.D. La. Dec. 17, 2013) (Engelhardt,
J.); Schlosser v. Metro. Prop. & Cas. Ins. Co., No. 12-1301, 2012 WL 4471862, at *1 (E.D. La. Sept. 27, 2012)
(Vance, J.); Johnson v. State Farm Mut. Auto. Ins. Co., No. 11-1991, 2012 WL 1745497, at *1 (E.D. La. May 16,
2012) (Africk, J.); Morris v. Liberty Mut. Ins. Co., No. 08-4247, 2010 WL 3942898, at *1 (E.D. La. Oct. 5, 2010)
(Berrigan, J.)).
93

See Drago v. Sykes, No. 13-563, 2013 WL 6665711, at *1 (E.D. La. Dec. 17, 2013) (Engelhardt, J.)
(granting summary judgment for the defendant on bad faith penalties claim where the plaintiff had not established that
the other driver was underinsured or that the other driver was at fault in causing the accident); Schlosser v. Metro.
Prop. & Cas. Ins. Co., No. 12-1301, 2012 WL 4471862, at *1 (E.D. La. Sept. 27, 2012) (Vance, J.) (granting summary
judgment for the defendant on bad faith penalties claim after finding that the plaintiff had not established that the
underinsured driver was at fault for the accident); Johnson v. State Farm Mut. Auto. Ins. Co., No. 11-1991, 2012 WL
1745497, at *1 (E.D. La. May 16, 2012) (Africk, J.) (granting summary judgment for the defendant on bad faith
penalties claim after finding that plaintiff had submitted no facts showing that the insurance company lacked a
reasonable basis to investigate and defend against a claim where the surrounding circumstances suggested that
insurance fraud may have occurred); Morris v. Liberty Mut. Ins. Co., No. 08-4247, 2010 WL 3942898, at *1 (E.D. La.
Oct. 5, 2010) (Berrigan, J.) (granting summary judgment for the defendant on bad faith penalties claim for insurer’s
refusal to pay non-economic damages and lost wages claim where the plaintiff had waived coverage for non-economic
damages and the plaintiff had been retired for over a year at the time of the accident).
94

No. 07-4594, 2008 WL 2397713, at *1 (E.D. La. June 10, 2008) (Africk, J.).

95

Id. at *3.

15

penalties claim, because it had a reasonable basis for denying the plaintiff’s claim.96 The
Hartenstein court rejected the insurer’s argument that the plaintiff had produced no evidence that
could provide a basis for concluding that the insurer had acted arbitrarily or capriciously, because
the plaintiff had provided the insurer with an expert report explaining that the damage was caused
by wind and providing an estimate of the cost of repairs.97 The court held that the fact that the
insurer had hired an expert after receiving the plaintiff’s expert report who found that the damage
was caused by pre-existing issues in the house did not, as a matter of law, indicate that the insurer
had acted reasonably.98
The court held that it was presented with conflicting expert reports and that determining
whether the insurer had acted reasonably was a factual determination that the Court could not
decide on the record presented.99 The court also rejected the insurer’s argument that even if there
was a dispute between the insurer and the plaintiff, it could not be liable for arbitrary and capricious
behavior because the disagreement provided a reasonable basis to dispute the plaintiff’s claims.100
Because, the court held, determining whether the insurer had a reasonable basis to deny part of the
plaintiff’s claims was a factual determination that the court could not decide on the record
presented, summary judgment was not appropriate.101 As in Hartenstein, the current case involves
a disagreement between Plaintiff and GEICO, and determining whether GEICO acted reasonably

96

Id.

97

Id.

98

Id.

99

Id.

100

Id. at *3 n.22.

101

Id.

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in rejecting Plaintiff’s claim requires a factual determination that this Court cannot make on the
record presented.102 Accordingly, because GEICO has failed to show that there are no genuine
disputes of material fact, summary judgment on Plaintiff’s bad faith penalties claim is not
appropriate.
IV. Conclusion
The Court finds that Plaintiff has provided evidence that he submitted facts to GEICO to
apprise it of the extent of his injuries.103 Plaintiff has shown that GEICO received proof of loss for
which it did not pay within the statutory periods.104 GEICO has failed to show that there are no
genuine disputes of material fact at issue and that GEICO did not act in bad faith as a matter of
law.105 Whether GEICO’s failure to pay was arbitrary, capricious, or without probable cause is a
factual determination that the Court cannot decide on the record presented.106 Summary judgment
is, therefore, inappropriate.

102

See id.

103

See McDill v. Utica Mutual Ins. Co., 475 So.2d 1085, 1089 (La. 1985).

104

See id. See also Hartenstein v. State Farm Fire and Cas. Ins. Co., No. 07-4594, 2008 WL 2397713, at
*3 (E.D. La. June 10, 2008) (Africk, J.); Grilleta v. Lexington Ins. Co., 558 F.3d 359, 368 (5th Cir. 2009) (A
determination of whether an insurer’s failure to pay a claim was arbitrary and capricious is a finding of fact.).
105

See Johnson v. State Farm Mut. Auto. Ins. Co., No. 11-1991, 2012 WL 1745497, at *4 (E.D. La. May
16, 2012) (Africk, J.).
106

See La. Rev. Stats. Ann. §§ 22:1892, 22:1973.

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Accordingly,
IT IS HEREBY ORDERED that GEICO’s “Motion for Summary Judgment on Insurer
Penalties”107 is DENIED.
NEW ORLEANS, LOUISIANA, this 20thday of December, 2016.
___

_________________________________
NANNETTE JOLIVETTE BROWN
UNITED STATES DISTRICT JUDGE

107

Rec. Doc. 41.

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