Justia Insurance Law Opinion Summaries

The Supreme Court granted certiorari in this case to consider two separate, but related issues: (1) whether the suspension of prescription provided for in La. C.C.P. art. 596 extended to a putative class member who filed an individual claim after a ruling on the class certification issue and, if so, (2) whether La. C.C.P. art. 596 suspended prescription when the putative class action is filed in another jurisdiction. After reviewing the relevant statutory provisions, the Court found that the filing of an individual lawsuit after a ruling on class certification does not operate as an "opt out" of a class action proceeding and a forfeiture of the benefits of suspension provided in La. C.C.P. art. 596, but that the provisions of La. C.C.P. art. 596 do not extend to suspend prescription on claims asserted in a putative class action filed in a federal court. As a result, the Court reversed the district court's judgment denying the defendant's exception of prescription, sustain the exception, and remanded this case to the district court to allow plaintiffs the opportunity to amend the petition, if they could, to allege facts to show their claims were not prescribed. View "Quinn v. Louisiana Citizens Property Insurance Corp." on Justia Law

The issue on appeal before the Supreme Court in this case concerned whether a written settlement agreement compromising a contested property insurance claim constituted a "proof of loss" under La. Rev. Stat. 22:1892(A)(1) sufficient to trigger the penalties set forth in La. Rev. Stat. 22:1892(B) for the insurer's arbitrary and capricious failure to timely pay the settlement funds. Plaintiff, Katie Realty, Ltd., filed suit against defendant, Louisiana Citizens Property Insurance Corporation (Citizens), for its untimely handling of plaintiff's Hurricane Gustav property damage claim. The matter was settled through mediation. When Citizens failed to timely pay the settlement funds, plaintiff filed a motion to enforce settlement and assess penalties pursuant to La. Rev. Stat. 22:1892 and 1973. In accordance with La. Rev. Stat. 22:1892(B)(1), the District Court awarded plaintiff $125,000 in penalties. The court of appeal affirmed, finding the settlement agreement constituted sufficient "proof of loss" under the provisions of La. Rev. Stat. 22:1892(A)(1) and Citizens' misconduct warranted the imposition of penalties under La. Rev. Stat. 22:1892(B)(1). Upon review, the Supreme Court concluded that the written settlement agreement did not constitute satisfactory proof of loss under the provisions of La. Rev. Stat. 22:1892(A)(1) sufficient to trigger the penalties set forth in La. Rev. Stat. 22:1892(B)(1). Accordingly, the Court reversed the judgment of the court of appeal and rendered judgment awarding plaintiff $5,000 in statutory penalties for Citizens' failure to timely pay the settlement funds in accordance with the provisions of La. Rev. Stat. 22:1973(B)(2) and (C). View "Katie Realty, Ltd. v. Louisiana Citizens Property Ins. Corp." on Justia Law

At issue in this case was whether plaintiffs' dismissal with prejudice of a lawsuit filed in federal court after the defendant has made a general appearance of record was a "voluntary dismissal" for purposes of La. C.C. art. 3463, which provides "[i]nterruption [of prescription] is considered never to have occurred if the plaintiff abandons, voluntarily dismisses the action at any time either before the defendant has made any appearance of record or thereafter . . ." After reviewing the record and the applicable law, the Supreme Court reversed the court of appeal and the reinstated the trial court's dismissing plaintiffs' suit. View "Sims v. American Insurance Co." on Justia Law

In February of 2009, a vehicle driven by Antoine Ellis ran a stop sign and struck a vehicle owned and operated by Ann Bernard. Norell Bernard and Andrea Bernard were guest passengers in Ann Bernard's vehicle at the time of the accident. Mr. Ellis was uninsured, and Ann, Norell and Andrea Bernard all filed suit against Imperial (Ann Bernard's insurer) for UM coverage. While Imperial did not dispute its named insured Ann Bernard was entitled to UM coverage, it filed a Motion for Partial Summary Judgment as to Norell and Andrea Bernard's claims on the basis that the guest passengers were not residents of Ann Bernard's household, and therefore did not meet the definition of "insured person" under the terms of the insurance policy for UM coverage. Imperial challenged the court rulings that denied the insurer summary judgment on that issue. After its review of the record, the Supreme Court held that the Plaintiffs were liability insureds under the Imperial policy and therefore entitled to UM coverage. Thus, the Court affirmed the rulings of the lower courts, denying Imperial's motion for partial summary judgment. View "Bernard v. Ellis" on Justia Law

Claimant Henry Marange filed a disputed claim for compensation against his employer, Custom Metal Fabricators, Inc. asserting he injured his back in a work-related accident. Custom Metal answered the petition, and denied Claimant's allegation. The issue before the Supreme Court was whether the court of appeal erred in reversing of the Office of Workers' Compensation (OWC), which held that Claimant failed to establish by a preponderance of the evidence that a workplace accident occurred. Upon review of the facts in record, the Court concluded that the court of appeal erred in reversing the OWC's judgment. View "Marange v. Custom Metal Fabricators, Inc." on Justia Law

The Workers' Compensation hearing officer terminated Petitioner Gloria Clay's benefits, finding her employer had sufficiently proved the availability of jobs such that Petitioner was capable of earning at least ninety percent of her pre-injury wages. The court of appeal reversed, finding the jobs identified by the vocational rehabilitation counselor were not available to Petitioner. Finding no manifest error in the hearing officer's decision, the Supreme Court reversed the court of appeal and reinstated the hearing officer's ruling terminating Petitioner's benefits.

The Supreme Court granted certiorari to determine whether a "statement made or action taken" language in La. R.S. 17:439(A) precludes a cause of action against school employees for negligent acts of omission and to ascertain whether an action may be filed pursuant to La. R.S. 17:439(D) directly against a school employee for the negligent operation of a motor vehicle to the extent his or her liability is covered by insurance or self-insurance. Nakisha Credit, mother of Adrianne Breana Howard (Breana), sued on behalf of Breana's half-siblings and herself stemming from a fight Breana had on school grounds. Breana was involved in "an ongoing feud" with Courtney McClain. Breana was dropped off in the rear of Rayville High School after school had been dismissed for the day at Richland Career Center and began to walk home. Plaintiffs contend LeBaron Sledge instigated a fight between Breana and Courtney whereby the two girls began fighting on the sidewalk in the rear of the school. During the altercation, Breana was either pushed by Courtney or fell off the sidewalk, and was struck by an oncoming Richland Parish school bus. Breana died as a result of her injuries. Among other allegations, Plaintiffs' petition alleged Defendants the School District, State Farm Mutual Automobile Insurance Company, the school board's insurer, the school superintendent and the bus driver were negligent in a variety of ways by failing to supervise the children, failing to timely respond to the fight, and failing to adequately staff the bus area with teachers or school employees. Upon review, the Supreme Court reversed the appellate court's decision to hold that La. R.S. 17:439(A) precludes a cause of action against school employees for certain negligent acts, including acts of commission and acts of omission. The Court otherwise affirmed the court of appeal's ruling that La. R.S. 17:439(D) permits an action directly against a school bus driver for the negligent operation of a school bus to the extent the driver’s liability is covered by insurance or self-insurance.

Claimant Jerry Benoit worked for Turner Industries for twenty-seven years. For ten of those years he worked as a general laborer for a Lake Charles Citgo refinery, where Turner was contracted to perform general maintenance. Claimant's duties included cleaning chemical discharges and oily waste which collected in the drainage ditches, sewers, and processing units at the refinery. In the course of this work, he was exposed to any number of potentially dangerous or carcinogenic chemicals, including high levels of benzene. In July 2006, Claimant fell ill. He was diagnosed with acute myeloid leukemia (AML), known to be linked to high levels of benzene exposure. Despite the medical evidence linking Claimant's cancer to the chemicals he was exposed to at work, his claim for medical benefits was denied. The eventual medical bills totaled over $625,000. Medicaid paid for $203,124.68. The remaining $422,043.59 was "written off" by the medical care providers. Turner paid nothing. Claimant's family filed suit in 2007. The Office of Workers' Compensation (OWC) awarded Claimant total medical expenses and attorney fees. Turner appealed, and the court of appeals affirmed the OWC judgment in its entirety. Upon review of the correctness of the OWC award of medical expenses, the Supreme Court concluded the OWC erred in awarding the "written off" medical expenses: "Claimant would receive an improper windfall if he was allowed to recover for medical expenses which have been reduced by health care providers as a result of their contractual arrangements with Medicaid." The Court reversed the appellate court's decision and remanded the case for further proceedings.

Plaintiffs-Class Representatives sought summary judgment in favor of numerous others similarly situated arising out of the failure of Louisiana Citizens Property Insurance Corporation (Citizens) to timely initiate loss adjustment on the enumerated members' insurance claims. The District Court granted summary judgment in plaintiffs' favor and awarded penalties for each compensable claim, totaling $92,865,000. The Court of Appeal reversed, finding a factual determination of whether the insurer breached its duty of good faith was required before assessing penalties. This litigation presented two issues of first impression for the Supreme Court: (1) whether an insurer is subject to the penalties imposed by former La. Rev. Stat. 22:658(A)(3) for its untimely initiation of loss adjustment in the absence of a showing of bad faith; and (2) whether the provisions of former La. Rev. Stat. 22:1220(C) capped those penalties at five thousand dollars when damages were not proven. Upon review, the Supreme Court found the plain language of La. Rev. Stat. 22:2658(A)(3) does not require a showing of bad faith by the insurer, but simply requires proof of notice and inaction for over thirty days. Furthermore, the Court found that the provisions of La. Rev. Stat. 22:1220(C) capped the penalties for such inaction at five thousand dollars when damages are not proven. Finding no error in the district court's award of the statutory cap for each failure to timely initiate, the Court reversed the judgment of the Court of Appeal and reinstated the district court's judgment.

The issue central to this case arose from Plaintiff Ginger Durio's claims for property damage to her home following Hurricane Rita and for damages and penalties against her homeowner's insurer. The Court granted review of Plaintiff's case primarily to review the correctness of the rulings of the lower courts that applied the penalty provision of La. R.S. 22:1220 (C) to contractual damages, and awarding attorney fees pursuant to the amended La. R.S. 22:658. In September 2005, Plaintiff owned a home in Lake Charles, which was covered by a policy issued by Defendant Horace Mann Insurance Company (Horace Mann). The home was damaged by the hurricane. The extent of damage to the rest of the structure and to the interior of the home was disputed. Plaintiff filed suit against the insurer alleging her home and everything in it were destroyed, but Horace Mann "consistently arbitrarily and capriciously refused to classify [the] home as a total loss." Following a bench trial, the court ruled in Plaintiff's favor. The court ordered payment of policy limits on Plaintiff's homeowner policies. Horace Mann filed a motion for new trial. At the hearing on the motion for new trial, the court found it erred in awarding penalties under both La. R.S. 22:658 and La. R.S. 22:1220, and vacated those awards. Otherwise, the court denied Horace Mann’s motion for new trial. On its own motion, the court also granted a new trial relative to the attorney fees issue. Noting that newly discovered damages could trigger the amended version of La. R.S. 22:658, the court found there were newly discovered damages as established by the proofs of claim submitted, and those newly discovered damages were subsequent to the amendment. After review, the Supreme Court held that the lower courts erred in calculating 22:1220 penalties based on contractual amounts due under the insurance contract: "[s]uch penalties are properly calculated by doubling the amount of damages sustained as a result of the insurer’s breach of its duties under the statute." Applying the proper statutory interpretation to the facts of this case, the Court amended the trial court’s judgment to reflect the correct award of penalties. Furthermore, the Court held the lower courts erred in applying the amended version of La. R.S. 22:658 allowing attorney fees to be awarded. Thus, the Court reversed the lower courts’ rulings on this issue, and vacated the award of attorney fees. In all other respects, the rulings of the lower courts were affirmed.