Krantz v. State Farm Fire and Casualty Company
Filing
35
RULING: For the reasons stated herein, the Plaintiff's 21 Motion for Summary Judgment is DENIED. Signed by Judge James J. Brady on 11/24/2015. (BCL)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA
STANLEY KRANTZ
CIVIL ACTION
VERSUS
NO. 15-56-JJB-RLB
STATE FARM FIRE AND
CASUALTY COMPANY
RULING ON MOTION FOR SUMMARY JUDGMENT
This matter is before the Court on a Motion for Summary Judgment (Doc. 21) brought by
Plaintiff, Stanley Krantz (“Krantz” or “insured”). Defendant, State Farm Fire and Casualty
Company (“State Farm” or “insurer”), filed an opposition (Doc. 28) and the plaintiff filed a reply
brief (Doc. 29). Oral argument is unnecessary. The Court’s jurisdiction exists pursuant to 28
U.S.C. § 1332. For the reasons stated herein, the plaintiff’s Motion for Summary Judgment (Doc.
21) is DENIED.
I.
Background
The following facts are undisputed. On September 19, 2014, a fire occurred at Krantz’s
residence causing damage to the home. Prairieville Fire Dep’t R., Doc. 21-3. At the time of the
fire, State Farm provided a policy of insurance to Krantz that provided fire-related coverage.
Pl.’s Supp. Mem. 4, Doc. 21-1; see Insurance Policy, Doc. 21-4.
Additionally, it is undisputed that on the day of the fire, Krantz and his wife left the
residence between 12:30 and 1:00 p.m. to go on a vacation. Krantz Examination Under Oath 66:
21-23, Doc. 28-5. In preparation for this vacation, Krantz placed his two snakes in a bedroom
and shut the door. Id. at 78. Krantz also removed this two dogs and one cat from the home, and
set off four bug bombs in the residence. Id. at 71:18–24, 76–78. The fire was reported at 2:17
p.m. and the Prairieville Fire Department (“Fire Department”) responded to the scene.
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Prairieville Fire Dep’t R. 2, Doc. 21-3. The fire at issue originated in Krantz’s kitchen and
resulted from one of the stove’s gas burner’s being left in the “on” position. Id. at 5.
After the fire, Krantz submitted a claim on the policy to State Farm. Pl.’s Supp. Mem. 4,
Doc. 21-1. On September 26, 2014, only a week after the fire, State Farm sent Krantz a letter
stating: “The estimate to repair or replace your damaged property is $112,522.08. The enclosed
claim payment to you of $68,143.64 is for the actual cash value of the damaged property at the
time of loss, less any deductible that may apply.” Letter from State Farm to Stanley Krantz (Sept.
26, 2014), Doc. 21-2 (emphasis added) (hereinafter “September 26, 2014 letter”). Krantz sent
State Farm a proof of loss on December 4, 2014, and subsequently sent several letters to State
Farm requesting payment under his policy. See Letters from Joseph LaHatte, Pl.’s Attorney, to
Cindy Ellender, Claim Rep., State Farm, Doc. 21-6. On July 2, 2015, State Farm officially
denied Krantz’s claim. Letter from Jacques Hourhuettes, State Farm, to Stanley Krantz (July 2,
2015), Doc. 21-7.
Although many of the underlying facts are undisputed, the parties dispute whether the fire
was intentionally or unintentionally started. According to Krantz, the Fire Department’s report
clearly establishes that the fire was unintentional. Pl.’s Supp. Mem. 5, Doc. 21-1; see Prairieville
Fire Dep’t R. 5, Doc. 21-3 (checking “unintentional” in box labeled “Cause of Ignition”). Krantz
also submits his own affidavit stating that he did not intentionally start the fire and that State
Farm’s fire investigator, Christian Mulkey (“Mulkey”), told him that the fire was accidental.
Krantz Aff. ¶ 4, 8, Doc. 21-5.
State Farm contends, however, that the Fire Department’s report does not conclusively
establish that the fire was accidental. Specifically, State Farm points out that the Fire Department
did not conduct a detailed fire cause and origin investigation, did not speak to Krantz during its
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investigation, and stated that the investigation would be completed by the State’s Fire Marshal’s
Office. Def.’s Opp’n Mem. 2, 7; see Prairieville Fire Dep’t R. 5, Doc. 21-3 (“Fire Marshal’s
office called to complete the investigation.”). The Fire Department did, however, speak to two
witnesses who stated that Krantz appeared to be in a hurry and anxious when he left this house
shortly before the fire and that Krantz drove away from the house quickly. Prairieville Fire
Dep’t R. 5, Doc. 21-3. Moreover, the Fire Marshal’s investigation yielded a report which states
that the cause of ignition is “under investigation.” Fire Marshal R. 5, Doc. 28-3. The report does
not find the cause to be “unintentional,” although there is a checkbox in the report for such a
finding. Id. According to this report, the investigation is inactive, but not closed. Id. at 10, 13
(“Should new information become available in the future, the investigation will resume.”).
Finally, State Farm submits the affidavit of Mulkey, who State Farm asked to perform a fire
origin and cause investigation. Mulkey Aff. ¶ 1, Doc. 28-4. Mulkey rebuts Krantz’s claim, stating
that he never told Krantz or anyone else that the fire was accidental. Id. at ¶ 2.
Due to State Farm’s refusal to pay, Krantz filed a petition for damages and penalty
damages, in Louisiana state court. State Farm removed the case to this Court. Notice of Removal,
Doc. 1. In response to Krantz’s complaint, State Farm alleged the affirmative defenses of arson
and material misrepresentation. Krantz has now brought the instant motion requesting summary
judgment on its claim for bad faith damages. Doc. 21.
II.
Summary Judgment Standard
Summary judgment is appropriate when “the movant shows that there is no genuine
dispute as to any material fact.” Fed. R. Civ. P. 56(a). The party seeking summary judgment
carries the burden of demonstrating that there is an absence of evidence to support the nonmoving party’s case. Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). When the burden at
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trial rests on the non-moving party,1 the moving party need only demonstrate that the record
lacks sufficient evidentiary support for the non-moving party’s case. Id. The moving party may
do this by showing that the evidence is insufficient to prove the existence of one or more
essential elements of the non-moving party’s case. Id. A party must support its summary
judgment position by “citing to particular parts of materials in the record” or “showing that the
materials cited do not establish the absence or presence of a genuine dispute.” Fed. R. Civ. P.
56(c)(1).
Although the Court considers evidence in a light most favorable to the non-moving party,
the non-moving party must show that there is a genuine issue for trial. Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248–49 (1986). Conclusory allegations and unsubstantiated
assertions will not satisfy the non-moving party’s burden. Grimes v. Tex. Dep’t of Mental
Health, 102 F.3d 137, 139–40 (5th Cir. 1996). If, once the non-moving party has been given the
opportunity to raise a genuine fact issue, no reasonable juror could find for the non-moving
party, summary judgment will be granted for the moving party. Celotex, 477 U.S. at 322–23.
III.
Discussion
a. Fraud / Misrepresentation
According to the plaintiff, there is no genuine issue of material fact that defendant State
Farm “committed fraud and misrepresentation when it sent its insured, Stanley Krantz, a letter
dated September 26, 2014, falsely instructing its insured that a payment was enclosed” but
failing to enclose or ever send such payment. Pl.’s Supp. Mem. 1, Doc. 21-1.2 To support his
1
For the affirmative defense of arson, the burden at trial rests with the insurer. Sumrall v. Providence Washington
Ins. Co., 60 So. 2d 68, 69 (La. 1952).
2
It is unclear whether the plaintiff intends this allegation as a separate cause of action—i.e. fraud and/or
misrepresentation—or if this is merely another example of the alleged bad faith practices of State Farm during the
course of the claims process. At one point, the plaintiff states that State Farm “fraudulently conveyed to Stanley
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contention, the plaintiff only submitted a copy of the September 26, 2014 letter and his affidavit
declaring that he never received the “enclosed” payment. See Letter from State Farm to Stanley
Krantz (Sept. 26, 2014), Doc. 21-2; Krantz Aff., Doc. 21-5.
In response, State Farm contends that even if “Plaintiff’s arguments are believed, there
was simply a failure to send money that was supposedly promised,” rather than
misrepresentation. Def.’s Opp’n Mem. 22, Doc. 28. State Farm does not dispute that the plaintiff
received the letter in question, that the letter stated that a payment was enclosed, nor that the
payment was not actually enclosed. According to State Farm, the September 26, 2014 letter3
referred to by the plaintiff was a draft estimate that is created by State Farm’s computer system.
Id. at 22–23. This draft estimate was prepared by a claim representative on September 26,
2014—the day after State Farm was notified of the plaintiff’s claim. Id. State Farm submitted an
affidavit of Cindy Ellender, which states:
The estimate attached to the November 14 letter was not a final version. . . . The
computer software automatically generates what is shown as page three of the
estimate. That page is to be removed in the event only a draft of the estimate is
being sent to a claimant, as was the case here. That page was inadvertently left in
the estimate that was sent to the Plaintiff’s attorney on November 14, 2014.
Krantz that a payment . . . was forthcoming, but failed to send the payment[.]” Id. at 2 (emphasis added). Later, the
plaintiff alleges that “State Farm either negligently or intentionally forgot to send Stanley Krantz these payments . . .
in blatant violation of Louisiana Insurance Bad Faith Statutes 22:1892 and 22:1973 . . . . This action in of itself is
fraud; at the very least, an intentional misrepresentation.” Id. at 5 (emphasis added). If the plaintiff is merely
asserting that this letter is further evidence of State Farm’s arbitrary and capricious nature in handling the claims
process, then see the discussion infra Section III(b).
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State Farm claims that the plaintiff failed to provide the Court will all relevant documentation concerning the
“September 26, 2014 letter.” According to State Farm, the “letter” that the plaintiff relies on is actually an estimate,
generated on September 26, 2014, that was attached to a letter State Farm sent to the plaintiff on November 14,
2014. State Farm submitted the entire letter, with attachments, to the Court. Doc. 28-6. The letter specifically states:
“Please be advised that we are continuing with our investigation of this fire loss and are requesting that Stanley
Krantz and Lisa Krantz each appear for an Examination under Oath.” Letter from Cindy Ellender, Claim Rep., State
Farm, to Joey LaHatte, Pl.’s Attorney (Nov. 14, 2014), Doc. 28-6, at 15. The letter also explained that State Farm
attached to the letter copies of its correspondence with Krantz, “as well as all estimates prepared.” Id. Following this
letter, in the attachments State Farm submitted to the Court, is a ninety-five page document entitled “Claim Rep
Draft.” See id. 16. Page three of the “Claim Rep Draft” attached to the letter appears to be the same document
referred to as the “September 26, 2014 letter” (Doc. 21-2) by the plaintiff, discussing the “enclosed claim payment.”
Id. at 18.
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***
I did not intend to include that page when the estimate was sent on November 14,
2014, and I did not intend to represent that payment was being enclosed with the
estimate. I would not have intended this to represent a payment letter since the
matter was still under investigation.
Ellender Aff. ¶ 9, 11, Doc. 28-6.
Based on the evidence presented, there is a genuine dispute concerning the defendant’s
intent when it included the “enclosed claim payment” language in its correspondence with the
plaintiff. Moreover, the plaintiff has failed to establish that he is entitled to judgment as a matter
of law regarding this claim. At the very least, if the plaintiff is alleging negligent
misrepresentation such an allegation requires some showing of damages. Duplechin v. Adams,
665 So. 2d 80, 84 (La. App. 1st Cir. 1995) (“In order for a plaintiff to recover for negligent
misrepresentation, there must be a legal duty on the part of the defendant to supply correct
information, a breach of that duty, and damages to the plaintiff caused by the breach.”). Plaintiff
has failed to allege any damages from this action.
b. Bad Faith Damages: La. R.S. 22:1892 and 22:1973
The plaintiff, through this motion, requests the Court to find that the defendant State
Farm acted in an arbitrary and capricious manner during the entire claims process, in violation of
La. R.S. 22:1892 and 22:1973. Accordingly, the plaintiff requests bad faith penalties, attorney’s
fees, costs, and judicial interest. Pl.’s Supp. Mem. 2, Doc. 21-1. In response, State Farm points
out that it has pleaded an arson defense, which, if proven, prevents any payment under the
insurance policy. Def.’s Opp’n Mem. 1, Doc. 28. State Farm disputes that the fire was
unintentional and therefore asserts that for that reason “it is . . . impossible to decide whether or
not State Farm’s nonpayment of the claim arising from the fire was in ‘bad faith.’” Id. at 2.
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Under La. R.S. 22:1892(A)(1), an insurer in Louisiana has a duty to “pay the amount of
any claim due any insured within thirty days after receipt of satisfactory proofs of loss from the
insured . . . .” A failure to pay that is “arbitrary, capricious, or without probable cause” renders
an insurer liable for the resulting damages and for a statutory penalty, attorney’s fees, and costs.
Id. at 22:1892(B)(1). The statute carves out an exemption to the thirty-day requirement for losses
resulting from fire. In these cases, the thirty-day period does not apply “where the loss from fire
was arson related and the state fire marshal or other state or local investigative bodies have the
loss under active arson investigation.” Id. at 22:1892(B)(2). Thus, the thirty-day period does not
begin to run until there is a “certification of the investigating authority that there is no evidence
of arson or that there is insufficient evidence to warrant further proceedings.” Id.
Under Section 22:1973(A), insurers in Louisiana owe the insured “a duty of good faith
and fair dealing.” An insurer breaches this duty if it fails to “pay the amount of any claim due to
[the insured] within sixty days after receipt of satisfactory proof of loss . . . when such failure is
arbitrary, capricious, or without probable cause.” Id. at 22:1973(B)(5). A breaching insurer is
liable for “any damages sustained as a result of the breach,” id. at 22:1973(A), as well as
potential penalties, id. at 22:1973(C).
To obtain penalties or damages under either La. R.S. 22:1892 or 22:1973, an insured
must demonstrate that (1) the insurer has received satisfactory proof of loss, (2) the insurer fails
to tender payment within the statutory period (either thirty or sixty days) of receipt thereof, and
(3) the insurer’s failure to pay is arbitrary, capricious, or without probable cause. Dominio v.
Allstate Ins. Co., Civil Action No. 09-7348, 2010 WL 4066647, *4 (E.D. La. Oct. 15, 2010)
(quoting La. Bag Co. v. Audubon Indem. Co., 999 So. 2d 1104, 1112–13 (La. 2008)).
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In this case, it is undisputed that (1) satisfactory proof of loss was made and (2) State
Farm failed to tender payment within the statutory period.4 Therefore, the remaining issue is
whether State Farm’s failure to pay was arbitrary and capricious. “Arbitrary and capricious” is
synonymous with “vexatious,” and a “vexatious refusal to pay” means “unjustified, without
reasonable or probable cause or excuse.” La. Bag Co., 999 So. 2d at 1114. The statutes at issue
“are not intended . . . to prevent insurers from disputing claims in good faith, including litigating
such disputes.” Dickerson v. Lexington Ins. Co., 556 F.3d 290, 299 (5th Cir. 2009). Therefore,
“[a]n insurer does not act arbitrarily and capriciously . . . when it withholds payment based on a
genuine (good faith) dispute about the amount of a loss or the applicability of coverage. Id. at
297–98 (citation omitted). Louisiana courts have recognized that an insured’s failure to pay
based on a good faith belief of arson is not arbitrary and capricious. Young v. State Farm Fire &
Cas. Ins. Co., 426 So. 2d 636, 645 (La. App. 1st Cir. 1982) (“In a case . . . in which there were
admittedly suspicious circumstances surrounding the fire, State Farm was within its rights in
refusing to pay the claim and in litigating the matter based upon the arson defense.”); see
Fontenot v. Hanover Ins. Co., 473 So. 2d 145 (La. App. 3d Cir. 1985); Bradford v. Canadian
Fire Ins. Co., 150 So. 2d 630 (La. App. 3d Cir. 1963). In this case, State Farm has asserted it did
not act arbitrarily and capricious when it failed to pay the plaintiff’s claim because State Farm
has a good faith belief that the fire was caused by arson.
4
The exemption provided in La. R.S. 22:1892(B)(2) is inapplicable in this case because there was no active arson
investigation being conducted by a public body. As previously stated, the Fire Marshal’s report indicated that the
investigation was “inactive,” albeit, not closed. Regardless, in order to recover bad faith damages, the plaintiff must
still establish that State Farm’s failure to pay was arbitrary and capricious. Although the absence or presence of an
arson investigation, either public or private, is relevant to the determination of whether the insurer acted in an
arbitrary and capricious manner, the public investigation exemption is merely one avenue for suspending the thirty
day deadline. If the exemption does not apply, then failure to pay thirty days after satisfactory proof of loss is
provided is a violation of the statute only if it was arbitrary, capricious, or without probable cause.
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1. Arson
Under Louisiana law, arson is an affirmative defense against a claim for fire insurance
proceeds. Kelly v. Commercial Union Ins. Co., 709 F.2d 973, 975 (5th Cir. 1983). To prevail on
an arson defense, the defendant must demonstrate (1) that the fire was of an incendiary origin,
and (2) that the plaintiff was responsible for setting the fire. Id. (citing Sumrall, 60 So. 2d at 69).
Arson can be established by a preponderance of the evidence and is often proven by
circumstantial evidence. See Cowen v. Allstate Ins. Co., Civil Action No. 11-118, 2011 WL
5869449, *3 (E.D. La. Nov. 22, 2011); B. Bennett Mfg. Co. v. S.C. Ins. Co., 692 So. 2d 1258,
1269 (La. App. 1997). The plaintiff must demonstrate that there is no genuine issue of material
fact that State Farm’s failure to pay due to its claim of arson is arbitrary and capricious. For the
plaintiff to succeed on his motion for summary judgment, he must demonstrate an absence of
factual support for one of the elements of State Farm’s arson defense. Citizens Sav. Bank v.
Safeways Ins. Co. of La., No. 2006 CA 1340, 2007 WL 1300817, *5 (La. App. 1st Cir. 2007).
The first element in an arson defense is that the fire was of an incendiary origin.
“Incendiary” is defined as follows: “1. One who deliberately and unlawfully sets fire to
property.” . . . 2. An instrument . . . or chemical agent designed to start a fire.” Black’s Law
Dictionary (10th ed. 2014). A fire’s “incendiary” origin is often established by evidence that
some form of an accelerant was used. See Rist v. Commercial Union Ins. Co., 376 So. 2d 113,
114 (La. 1979); Briggs v. N.H. Indem. Co., 579 So. 2d 1221, 1222 (La. App. 3d Cir. 1991). For
purposes of summary judgment, sufficient evidence can be established demonstrating a genuine
issue concerning the fire’s incendiary origin despite a lack of physical evidence proving that an
accelerant was used. See Sowards v. Grange Mut. Cas. Co., No. 3:07-cv-0354, 2008 WL
3164523, *4–5 (M.D. Tenn. Aug. 4, 2008). For example, in Sowards, the insurer hired an
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investigator to determine the cause and origin of a fire at issue in an insured’s policy claim. Id. at
*4. Even though laboratory tests of samples taken from the debris revealed “no identifiable
accelerants,” the investigation concluded that “[a]ll physical evidence indicates that this fire is
Incendiary in Origin, occurring as the result of someone pouring a flammable or combustible
liquid substance inside the home and igniting same.” Id. (citation omitted). The investigator
reached this conclusion by examining the debris and other materials in the kitchen where the fire
originated. Id. Specifically, the investigator removed and examined the stove, where the heaviest
damage was located: “This damage was so intense that it could not have been caused by normal
temperatures produced in a residential fire. This amount of damage can only occur as the result
of a flammable liquid, chemical or accelerant.” Id. The plaintiff, on the other hand, presented
evidence that the fire may have been caused by an electrical problem or by accident. Id. at *5.
The court concluded that even though the plaintiff’s argument “is certainly plausible, the
evidence presented by [the insurer] that the fire was of incendiary origin nevertheless is
sufficient to survive the plaintiff’s summary judgment motion.” Id.
Here, the plaintiff points to his own affidavit and the Fire Department’s report to argue
that the fire was accidental—i.e. the stove was accidentally left on, and therefore, not of an
incendiary origin. See Pl.’s Reply Mem. 1, Doc. 29 (“[T]here is absolutely no evidence
whatsoever indicating that this fire was of incendiary origin and/or that Stanley Krantz
intentionally set the fire.”). State Farm does not directly address the first element and jumps
straight to discussing the evidence demonstrating that the plaintiff caused the fire. Regardless,
there is a genuine issue regarding whether the fire was of an incendiary origin, based on the
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evidence presented.5 Specifically, the summary judgment evidence establishes that shortly before
the fire the plaintiff set off four bug bombs in the house. According to State Farm, such behavior
is suspicious because bug bombs use aerosol to disperse pesticides and “it is common knowledge
that aerosol is flammable, as every aerosol container, and bug bombs in particular, come with a
warning label concerning flammability.” Def.’s Opp’n Mem. 12, Doc. 28. State Farm also
submits the Fire Marshal’s report, which states that the cause of the fire is “under investigation,”
and does not conclude that it was “unintentional.” Additionally, State Farm points to other
evidence indicating that the fire was intentionally set, such as the witness testimony stating that
the plaintiff left the house in a hurry shortly before the fire and the fact that the plaintiff removed
his dogs and cat from the home. As was the case in Sowards, the plaintiff’s argument that the fire
was accidentally started is plausible.6 However, when viewing the evidence in the light most
favorable to the non-moving party—State Farm—the suspicious facts surrounding the fire are
sufficient, for purposes of summary judgment, to raise a genuine issue regarding whether the fire
was of incendiary origin.
The second element in an arson defense is that the plaintiff was responsible for causing
the fire. “Proof of plaintiff’s responsibility may be demonstrated by circumstantial evidence,
including by proof of plaintiff’s motive.” Cowen, 2011 WL 5869449, *8; see Briggs, 579 So. 2d
An alternate basis for denying the plaintiff’s motion exists pursuant to Federal Rule of Civil Procedure 56(d).
According to State Farm, the “discovery period has just begun, with discovery to be completed by January 21,
2016, and expert discovery . . . to be completed by July 13, 2016.” Def.’s Opp’n Mem. 3, Doc. 28. State Farm
asserts that they have not had sufficient opportunity to conduct discovery. Id. Specifically, State Farm still needs to
depose several witnesses, including the plaintiff, the plaintiff’s wife, the plaintiff’s daughter, the plaintiff’s
neighbors, and Prairieville Fire Department personnel. Id. at 3–4. Moreover, State Farm has requested production of
the stove, which was removed from the property before State Farm could examine it. Id. at 3. Although the Court
believes that the evidence presented demonstrates a genuine issue, examination of the stove and depositions of
various witnesses could provide further evidence of the fire’s incendiary origin.
6
Evidence that an appliance was left on may be sufficient, at trial, to rebut a finding that the fire was of incendiary
origin. See Briggs, 579 So. 2d at 1222 (stating that a “non-incendiary cause of the fire” included “an electrical
wiring defect or an appliance left in operation”). At summary judgment, however, evidence which demonstrates a
genuine issue concerning the incendiary origin of the fire is sufficient.
5
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at 1223 (citing Rist, 376 So. 2d 113). Again, the plaintiff’s argument relies on the Fire
Department’s report that the fire was “unintentional” and the plaintiff’s own affidavit that he did
not intentionally set the fire. In response, State Farm sets forth evidence demonstrating that the
plaintiff had both the opportunity and motive to set the fire.7
Motive “can include dire financial straits . . . and the desire to make money[.]” La. Real
Estate Appraisal Serv. v. Nat’l Union Fire Ins. Co. of Pittsburgh, Pa., Civ. A. No. 84-6129, 1987
WL 15955, *4 (E.D. La. Aug. 14, 1987); see Sumrall, 60 So. 2d 68, 70 (“Considering that
plaintiff was in dire financial circumstances and that he alone . . . would benefit by the fire, there
can be no doubt that defendant has established that he had a motive for destroying the
property.”).
State Farm offers ample evidence that the plaintiff had a financial motive to set the fire
and collect insurance proceeds. Specifically, State Farm states that the plaintiff was unemployed
at the time of the fire, both he and his wife were on fixed Social Security disability benefits, the
plaintiff admitted to having money trouble and to mismanaging his money prior to the fire, the
plaintiff and his wife were behind on paying medical bills in 2014, and the plaintiff was denied
credit for a truck. Def.’s Opp’n Mem. 10–11, Doc. 28; see Ellender Aff., Doc. 28-6; Krantz
Examination Under Oath, Doc. 28-5. Additionally, at the time of the fire, the plaintiff was in
default on a loan secured by the property at issue. Def.’s Opp’n Mem. 11, Doc. 28. Only
State Farm breaks down the “responsibility” element of the arson defense, when circumstantial evidence is used,
into two factors: “(1) opportunity (i.e., is it possible for the plaintiff to have set the fire?); and (2) motive (did the
plaintiff have a reason to set the fire?).” Def.’s Opp’n Mem. 9, Doc. 28. State Farm does not provide citations to the
relevant authority for this proposition, and, as discussed above, the Louisiana Supreme Court focuses explicitly on
“motive,” although implicit in a finding of arson is a determination as to “opportunity.” According to State Farm, the
plaintiff had the opportunity to set the fire because the plaintiff testified in his Examination Under Oath that he and
his wife left their residence between 12:30 and 1:00 pm on the day of the fire—the fire was reported at 2:17 pm—
and the plaintiff has been inconsistent concerning whether he or his wife used the stove that day. Def.’s Opp’n Mem.
9–10, Doc. 28. Based on the evidence presented, there is a genuine issue concerning whether the plaintiff had an
opportunity to set the fire.
7
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seventeen days prior to the accident, the Small Business Administration sent a letter to the
plaintiff stating that the loan was in default due to a failure to make monthly payments and that
the entire balance of the loan ($72,770.69) was due. Id. at 11–12. The evidence presented by
State Farm concerning the plaintiff’s opportunity and motive, is sufficient to establish a genuine
issue for summary judgment purposes regarding whether the plaintiff was responsible for setting
the fire.
Therefore, summary judgment is inappropriate on the plaintiff’s claim for bad faith
damages under La. R.S. 22:1892 and 22:1973 because there is a genuine issue of material fact at
this time concerning whether State Farm’s failure to pay was arbitrary, capricious, or without
probable cause.
IV.
Conclusion
For the reasons stated herein, the Plaintiff’s Motion for Summary Judgment (Doc. 21) is
DENIED.
Signed in Baton Rouge, Louisiana, on November 24, 2015.
JUDGE JAMES J. BRADY
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA
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