Articles Posted in Insurance Dispute

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contract-signing-1474333-768x1024No one likes to deal with insurance matters. Shopping for insurance and understanding the terms of an insurance policy can be complex. Most people are happy to just pay their monthly premiums and know that they have insurance when they need it – and then hope they never need it at all. One woman learned how complex insurance matters can be when she was injured in July of 2012 when the Pontiac Sunfire that she was driving was involved in an auto accident in Ouachita Parish.

The insurer of the other driver who was involved in the accident tendered payment to the plaintiff, Sonya Rodgers, in an amount equal to the policy limits. At the time of the accident, Rodgers was insured by State Farm. Rodgers sued State Farm alleging that she should be provided uninsured motorist coverage for the injuries she suffered in the accident. State Farm filed a motion for summary judgment arguing that uninsured motorist coverage was not provided because Rodgers rejected such coverage in April of 2010.

Rodgers contended in opposition to the motion that there was a genuine issue of material fact as to whether there was uninsured motorist coverage at the time of the accident. Rodgers argued that after the original vehicle covered under her State Farm policy became inoperable, she turned its license plate into the DMV, alerted her State Farm agent that she would no longer need the coverage because the vehicle was broken down beyond repair, and she stopped paying premiums to State Farm. Rodgers said that she considered the policy to be cancelled after she took those steps. Rodgers further said that after acquiring the Pontiac Sunfire she contacted her State Farm agent and negotiated a new policy and she believed that she had uninsured motorists coverage because State Farm never asked her to execute a new rejection of uninsured motorist coverage form. See La. R.S. 22:1295.

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IMG_1132Putting on a festival at the New Orleans Superdome is a lot of work. One vital part of that work is to confirm that the insurance policy actually covers the activities and location of the festival.  Festival Productions, Inc. – New Orleans (“FPINO”) learned this lesson the costly and hard way.  The Louisiana Fourth Circuit Court of Appeal’s decision shows the gaping hole in FPINO’s coverage that was entirely avoidable.  

In July 2005, Deborah Daniels slipped and fell on an unknown substance at the New Orleans Superdome when she was attending the Essence Festival. A year later, she filed a lawsuit in Orleans Parish alleging she suffered injuries from the fall, naming a host of defendants including FPINO, the producer of the festival, and its insurer, Maryland Casualty Company (“MCC”).   


MCC did not believe that it was required to indemnify or defend FPINO in the suit and so it filed a motion for summary judgment against FPINO.  MCC argued that FPINO’s policy did not cover damages sustained by the plaintiff because the Superdome was not a designated premises covered under the policy.  FPINO filed a cross-claim against MCC and Essence, alleging that as an insured under the policy, MCC owed FPINO a defense and indemnity, and MCC refused to do so.  

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thrown-rubbish-1561470Insurance policies can still be intact even if the insured fails to pay if the insurance company fails to follow the proper protocol in informing the insured that he or she no longer has coverage. State Farm found themselves liable for coverage in just a situation.

Thomas Sapp was insured under a Florida State Farm policy. The policy ran from December 3 until June 3, 2008, and the policy was renewed thereafter for consecutive six-month terms.  Sometime during Sapp’s insurance coverage, Sapp moved from Florida to New Orleans, Louisiana. State Farm was aware of his move. On August 15, 2009, Sapp was involved in an automobile accident with Roderick Lee. Subsequently, Lee sued Sapp and State Farm seeking damages for his personal injuries incurred in the accident as the result of Sapp’s alleged negligence.  State Farm denied coverage, arguing that the policy was not renewed.

In support of State Farm’s claim that they were not responsible for Lee’s damages because the policy was not renewed, State Farm presented evidence that Sapp was no longer covered by State Farm because Lee stopped making payments in February of 2009. In response, both Lee and Sapp argued that the State Farm policy was still in effect because State Farm did not send the legally required notice of cancellation for renewal.  The trial court agreed with Lee and Sapp, and granted their motions for partial summary judgment, while denying State Farm’s motion for summary judgment. The Louisiana Fourth Circuit Court of Appeals agreed with the trial court and affirmed. In determining the claim, the Fourth Circuit recognized that although the incident occurred in Louisiana, the Court had to apply Florida law because the contract arose out of Florida. However, the Court also noted that even if the Court were to have applied Louisiana law the outcome would have been the same.  

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car-wreck-1449449Anytime you get in a car can be a life and death situation. While no one ever wants to think about the worst, what will your insurance cover if the worst does happen. Your policy may not only need to cover you and those injured, it could need to cover your employer if you were driving in the scope of your employment.

On February 9th, 2009, a fatal automobile accident occurred between Croom and Rhonda, Edward, and Barbara Hickey. Croom, died after he crossed the centerline of a street in Pineville, Louisiana, and colliding with the Hickey’s vehicle. Croom was insured by Allstate insurance company, who provided his estate with a defense.

The Hickeys claimed in there suit against Croom’s estate, (represented by Allstate) that he was operating a vehicle in the “Course and Scope” of his employment with the Express Company. Express was insured by two separate policies, one from Federal Insurance Group, and an excess policy by Scottsdale Insurance Company.

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Most people have heard the saying “A Deal’s a Deal.”  That’s what the plaintiffs thought in a case that arose from Rapides Parish that involved eight people in one vehicle and one person in the other.  The plaintiffs were the driver and passengers in the eight-person vehicle, and they were suing for damages that were caused by the defendant in the car accident.  However, the only applicable insurance coverage to the plaintiffs was the uninsured motorist coverage issued by Safeway Insurance Company of Louisiana.  The plaintiffs eventually reached a settlement agreement with Safeway, in which Safeway agreed to pay the agreed amount of the insurance policy.  

However, the plaintiffs alleged that Safeway failed to remit the settlement fund within thirty days of the date that the settlement agreement was put into writing, as mandated by state law.   Pursuant to state law under La. R.S. 22:1973, the trial court found the agreement was put into writing on March 18, 2013, while the settlement was paid off by Safeway on the thirty-fourth day after the agreement.  Safeways appealed when the trial court ruled in favor of the plaintiffs.  The Court of Appeals disagreed with trial court’s finding and determined the day the agreement was put into writing was March 28, 2013.  The payment made by Safeway on April 22, 2013, was within the thirty-day period.

The appellate court emphasized that the thirty-day requirement is penal in nature and, therefore, the court should construe its application strictly and narrowly.  The Court consequently concluded that when a party seeks penalties for an insurer’s failure to pay a settlement in time, the party is not required to prove that the insurer was “arbitrary, capricious, or without probable cause” in failing to pay. Rather, the party is required to show that the insurer “knowingly” failed to pay.  See Sultana Corp. v. Jewelers Mut. Ins. Co, 03-360, p. 9 (La. 12/3/03), 860 So.2d 1112, 1119.  

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You hear it all the time and a good lawyer will tell you: don’t sign anything before reading it. Most people know this, but few people actually practice it. However, following this old adage can save you from many headaches and in the case of Mrs. Theodora Lourie it could have saved her time and money.

Mrs. Lourie purchased a Chardonnay Village Condominium unit in Kenner, Louisiana in 1997. In late 2010 a kitchen fire damaged the interior of the unit and much of Mrs. Lourie’s personal belongings. Fortunately, Mrs. Lourie had homeowner’s insurance through State Farm, which paid her $79,175.95 for damages and living expenses. About one year after the fire, Mrs. Lourie filed a petition for damages against the Chardonnay Village Condominium Association (“Association”). She wanted the Association to reimburse the payments State Farm made to her and sought additional damages that were not covered under her State Farm policy. In total, Mrs. Lourie wanted a judgment in her favor of $113,000.

The Trial Court granted summary judgment in favor of the Association, i.e., there was no genuine issue of material fact and the Association was entitled to judgment as a matter of law. The Louisiana Fifth Circuit Court of Appeal agreed with the Trial Court’s determination. The issue here is whether Mrs. Lourie had actual notice that the Association would not provide insurance coverage for individual condo units. If she had actual notice, then the Association was off the hook, so to speak.

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It seems rare in insurance coverage litigation for a court to wholeheartedly agree with an insurer that the coverage requested is not in fact provided for in the contract for insurance.  Yet, the U.S. Court of Appeals for the Fifth Circuit did just that, upholding a decision out of the U.S. District Court for the Eastern District of Louisiana finding without question that Bollinger Shipyards, Inc. was not entitled to defense by its insurers in a lawsuit brought against it by the United States.

Bollinger, a shipbuilder headquartered in New Orleans, won a multi-million dollar “Deepwater” modernization contract to upgrade eight (8) 110-foot U.S. Coast Guard cutters to make them 123-foot vessels.  Despite the Coast Guard’s concerns that the boat hulls were not able to accommodate the 13-foot extensions, Bollinger pushed forward on the project.  On several occasions, Bollinger submitted analyses to the Coast Guard purporting to show that the hull strength was sufficient.  In reality, the hull strength was not sufficient which became apparent when one of the ships “suffered a structural casualty that included buckling of the hull.”  The Coast Guard determined that the seven remaining ships were equally faulty and unusable.

Eventually, the United States filed a lawsuit against Bollinger over the faulty work. The Court allowed the United States to move forward with two claims under the False Claims Act.  Days prior to the government’s filing, Bollinger notified its general maritime insurer, XL Speciality Insurance Company, and its excess insurer, Continental Insurance Company, of the impending claims in an effort to shift the burden of the expense of the defense to the insurers.  In response, XL issued a “reservation of rights” letter stating that it was unsure if Bollinger’s policy included this coverage.

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burn-baby-burn-1229975-1-1024x768A fire at a building you own cannot only damage your property but others as well.  So what happens when a fire starts at your property and then quickly spreads to others, are you liable for their losses as well? The following case demonstrates what happens in court when a piece of real estate catches fire, causing damage to a neighboring property.

The New Orleans Fire Department was called on January 7, 2011, to suppress a fire at property owned by the Fellowship Missionary Baptist Church (“the Church”). The property encompassed the church building located at 2101 Prytania Street and a residential house located at 2113 Prytania Street. The Church had not conducted worship services on the property since the church was damaged in 2005 by Hurricane Katrina. The fire was investigated by the New Orleans Fire Department, the State Fire Marshall’s Office, and the Bureau of Alcohol, Tobacco, and Firearms. All of the agencies agreed that the cause or the origin of the fire could not be determined conclusively.

Show and Tell of New Orleans, L.L.C. sustained water and fire damages to their nearby properties, along with the owners of the Magnolia Mansion. Those parties filed lawsuits essentially claiming that the Church was negligent for its alleged inattentiveness in maintaining its property in a safe and secure manner.  Further, the Plaintiffs alleged negligence in the Church’s failure to adequately secure the church to prevent vagrants, who the Plaintiffs claimed caused the fire, from habitually entering and inhabiting the church. The Plaintiffs also contended that the building was in a state of disrepair, that the property was a public nuisance, and that it had been cited as blighted property by the City of New Orleans in September and November of 2009.  All of these problems in the Plaintiffs eyes lead to the Church being liable for the damages they sustained from the fire.

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building-on-fire-1214366-706x1024The case may have seemed simple enough to the courts at first: interpret a contract.  The main question in the case before the U.S. Court of Appeals for the Fifth Circuit was whether to apply the business’ projected income versus the actual income when calculating the coinsurance reward.  The Court had to determine whether the language in the insurance policy and contract was clear as to which income it referred to.  The Court applied Louisiana law, and indicated that courts must apply the contract as a whole, rather than in separate parts.  The Court also applied the same law, which prior Louisiana Supreme Court decisions established, in determining that a court must enforce a contract as it is written when the contract’s meaning is clear and unambiguous.

Advance Products & Systems, Inc., (APS) of Scott, Louisiana, purchased an insurance policy in from Mt. Hawley Insurance Company in November of 2009 for its commercial property.  Mt. Hawley Insurance Company is an Illinois company with a Baton Rouge agent.  A fire damaged APS’s facility in September of 2010, about ten months after Mt. Hawley issued the policy.  A dispute subsequently arose between Mt. Hawley and APS during the claims-adjustment process, and Mt. Hawley then sued APS in a Louisiana federal court – the United States District Court for the Western District of Louisiana.  Mt. Hawley had the option to sue in federal court since the two parties were incorporated in different states.

The dispute stemmed from two provisions in the insurance policy.  The first provision involved coverage for income lost – business income coverage; the second, a coinsurance clause, required APS to be responsible for a percentage of certain losses because APS chose to purchase a limited level of coverage, as opposed to the full value of its income.  The policy applied the coinsurance clause as a penalty when the policy limit amounted to less than 90 percent of the sum of the net income and operating expenses ‘that would have been earned or incurred’ over a 12-month period.  APS’s coverage limit was $500,000; whereas it claimed to have lost $723,109 of income as a result of the fire.

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truck-on-hwy-1615510-1-1024x682Renting a U-Haul truck can be a necessary burden when you are tasked with moving a lot of stuff from place to place. During the rental process you might be asked whether or not you want supplemental insurance policies.  But who do you sue when an accident happens?  In the following case out of New Orleans, Louisiana one plaintiff finds out who definitely cannot be sued when a U-Haul and Fedex truck collide.

JR was driving a rented commercial truck (U-Haul), when his truck crashed into a delivery truck (Fedex)  in New Orleans. JR filed a lawsuit against the delivery truck and also named the insurer of the company he rented the truck from as a Defendant as well. JR named the company from whom he rented a truck as a Defendant because he claimed to have purchased “risk protection” from that company in the course of his rental agreement with the company.  JR believed that the risk protection insurance would provide him with uninsured motorist coverage. The plaintiffs went on to add RW Insurance Company as another defendant, apparently believing that RW was the commercial company’s insurer.

However, RW insurance apparently is only a claims administrator for the commercial company and not an insurance company.  Upon receipt of the lawsuit RW wanted out as soon as possible.  To do so they filed a motion for summary judgment (MSJ).  If RW could prove that there was no genuine issue as to the material fact that they were not an insurer for the commercial company and thus owed no coverage to JR they could be dismissed from the case.  See Louisiana Code of Civil Procedure article 966.  They did just that and the trial court granted their motion.

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