Morgan et al v. Americas Insurance Company

Filing 36

ORDER AND REASONS granting 24 MOTION to Compel Examination Under Oath and Appraisal, and MOTION to Stay Litigation Pending Appraisal. This matter is stayed and administratively closed pending completion of the appraisal process outlined in the policy. Signed by Judge Jane Triche Milazzo. (NEF: ROBY)(ecm)

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UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
STACY MORGAN, ET AL.

CIVIL ACTION

VERSUS

NO: 16-13900

AMERICAS INSURANCE COMPANY

SECTION: “H”(4)

ORDER AND REASONS
Before the Court is Defendant’s Motion to Compel Examination Under
Oath and Appraisal and Stay Litigation Pending Appraisal (Doc. 24). For the
following reasons, this Motion is GRANTED.
BACKGROUND
Following a 2015 fire, Hollis Burton hired A-Plus Contractors, LLC (“APlus”) to perform remediation and repairs to his property. Burton was insured
for this loss by Defendant Americas Insurance Company (“AIC”).

Burton

executed a post-lost “Assignment of Insurance Benefits” (“AOB”) form in favor
of A-Plus, whereby he assigned all benefits of the policy relative to the 2015
fire claim.

Pursuant to this assignment, Plaintiffs seek payment from
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Defendant for the work completed on the property.

On June 15, 2016,

Plaintiffs filed suit in Louisiana State Court seeking payment for the repair
and remediation costs and damages for breach of contract, negligence, and
arbitrary and capricious penalties, attorneys’ fees, and general and special
damages pursuant to Louisiana Revised Statutes §§ 22:1973 and 22:658.
Defendant removed the matter to this Court on the basis of diversity. The
Court denied Defendant’s Motion to Dismiss, finding that Plaintiffs had
accepted a valid assignment of benefits and succeed to all rights and benefits
of the insured relative to the AIC policy. Defendant then filed the instant
Motion to Stay, arguing that this matter should be stayed pending Plaintiffs’
compliance with the examination under oath (“EUO”) and appraisal provisions
of the policy. Plaintiffs oppose this Motion.
LEGAL STANDARD
The Federal Courts have a “virtually unflagging obligation . . . to exercise
the jurisdiction given them.”1 Nevertheless, “[a] district court certainly
possesses the authority to regulate its flow of cases.”2 “Although the Court has
the inherent power to stay any matter pending before it in the interest of
justice and economy of time and effort for itself, for counsel and for litigants,
the moving party bears a heavy burden to show why a stay should be granted.”3

Black Sea Inv., Ltd. v. United Heritage Corp., 204 F.3d 647, 650 (5th Cir. 2000)
(citiations omitted).
2 Coastal (Bermuda) Ltd. v. E.W. Saybolt & Co., 761 F.2d 198, 204 (5th Cir. 1985).
3St. Bernard Citizens for Envtl. Quality, Inc. v. Chalmette Ref., L.L.C., 348 F. Supp.
2d 765, 767 (E.D. La. 2004).
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LAW AND ANALYSIS
In this Motion, Defendant asks the Court to (1) issue an order requiring
Plaintiffs to submit to an examination under oath as set forth in the AIC policy
and provide AIC with documentation to support the claim; (2) issue an order
requiring the parties to submit to the appraisal process as outlined in the
policy; and (3) stay the matter pending completion of the appraisal. They argue
that because Plaintiffs step into the shoes of the insured as assignees, they
must comply with all the relevant terms and conditions of the policy, including
cooperation, EUO, and appraisal provisions. They aver that despite numerous
attempts, they have been unable to conduct an EUO, a prerequisite of the
appraisal process.
Plaintiffs respond in opposition.

First, they assert that Defendant

should be estopped from demanding an appraisal because they previously
argued that Plaintiffs were not insured under the policy. They argue that this
amounts to “bad faith” treatment of the insured, but they cite to no law in
support of this contention. Whether or not Plaintiffs qualify as insured was
the subject of a contested motion before this Court. Now that the issue has
been settled, Defendant demands that Plaintiffs comply with the terms and
conditions of the policy. This does not constitute bad faith. Indeed, under
Louisiana law, an “assignee ‘steps into the shoes’ of the assignor and acquires
only those rights possessed by the assignor at the time of the assignment.”4
Accordingly, Plaintiffs must comply with the terms and conditions of the policy,
including the appraisal provision.
Plaintiffs next argue that an appraisal cannot be conducted because the
repairs on the home have already been completed. They argue that they are
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Conerly Corp. v. Regions Bank, 668 F. Supp. 2d 816, 823 (E.D. La. 2009).

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automatically owed the cost of “reasonable repairs” as provided under the
policy. In support of this position they cite to several cases describing prerepair appraisals for the proposition that an appraisal cannot be conducted
after repairs are made.5 None of these cases contain the prohibition on postrepair appraisal advanced by Plaintiffs.

This contention is likewise

unsupported by the terms of the policy. Clearly, Defendant disputes whether
the repairs made by the Plaintiffs constitute “reasonable” repairs covered
under the policy. The terms of the policy allow for appraisal in the event of
disagreement regarding the amount of the loss.

Plaintiffs’ decision to

unilaterally proceed with repairs does not deprive either party of this right.
CONCLUSION
For the foregoing reasons, Defendant’s Motion to Compel Examination
Under Oath and Appraisal and Stay Litigation Pending Appraisal (Doc. 24) is
GRANTED.

This matter is STAYED AND ADMINISTRATIVELY

CLOSED pending completion of the appraisal process outlined in the policy.
After the same is completed, either party may file a motion to reopen the case.
New Orleans, Louisiana this 6th day of July, 2017.

____________________________________
JANE TRICHE MILAZZO
UNITED STATES DISTRICT JUDGE
See, e.g., Long v. Am. Sec. Ins. Co., 52 So. 3d 260, 261 (La. Ct. App. 4 2010), writ
denied, 57 So. 3d 336 (La. 2011); Dufrene v. Certain Interested Underwriters at Lloyd's of
London Subscribing to Certificate No. 3051393, 91 So. 3d 397, 401 (La. Ct. App. 5 2012),
writ denied, 90 So. 3d 1065 (La. 2012); St. Charles Par. Hosp. Serv. Dist. No. 1 v. United
Fire & Cas. Co., 681 F. Supp. 2d 748, 760 (E.D. La. 2010).
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