July 2022 Newsletter: Latest Developments in Louisiana Hurricane Damage Law
In a landmark decision, the Western District Court upheld a jury’s bad faith award of $892,500.00 inEaux Holdings LLC v. Scottsdale Ins. Co. The Western District Court held that the plaintiff offered ample evidence at trial to support their argument that they provided sufficient proof of loss on September 15, 2020 regarding their business to the defendant insurance company, Scottsdale. Testimony from three different witnesses showed that the plaintiff tried to communicate to the defense that at least 1.5 million was needed to tear down the building and to rebuild with no response from Scottsdale. Further, the evidence also showed that it was not until May 2021 that Scottsdale provided final payment after sufficient proof of loss and that all four payments were untimely and not submitted within the 30 day requirement. The jury would go on to find that Scottsdale's untimely payments were arbitrary, capricious, or without probable cause. The jury awarded a massive amount in penalties to the tune of $892,500.00, which was upheld by the court after the defendant filed a Motion for Judgment as a Matter of Law. While not a matter brought up in the Motion, the jury also awarded plaintiff attorney fees of $535,500.00 that as of now, has not been overturned. Eaux Holdings LLC v. Scottsdale Ins. Co., No. 2:20-CV-01582, 2 (W.D. La. July 1, 2022). This is the first jury verdict following Hurricane Laura and provides insight on how juries in Louisiana will award bad faith damages. This case provides great insight and an example on how bad faith claims may be awarded following Hurricane Ida. Further, this case shows that Louisiana residents, who have suffered through countless hurricanes, are more and willing to punish insurance companies who fail to properly provide payment after a sufficient proof of loss.
In other cases, the Eastern District Court in Block L. Firm, APLC v. Bankers Ins. Co. ordered the defendant to pay the plaintiff’s attorney fees after a futile attempt to remove the subject case to federal jurisdiction. The Defendant waited 45 days after the deadline to try and remove the matter to federal court based on a weak argument that the petition for damages did not stipulate damages were more than $75,000.00. In short, the court decided to punish the defendant and held: “The Defendant lacked an objectively reasonable basis for waiting more than 30 days after being served to remove this matter because the Petition clearly alleged damages above $75,000. As the state court judge correctly observed during the Exception of Vagueness hearing, no judge could look at this Petition and believe Plaintiffs were requesting less than $75,000.00 The Court cannot allow this objectively unreasonable defense tactic to prevail. It costs plaintiffs time and money to have the case improperly removed, while also draining the limited resources of this Court. As a result, the Court cannot tolerate such a removal. Therefore, the Court, within its discretion, and to deter future futile untimely removals, shall award attorney's fees and costs.” Block L. Firm, APLC v. Bankers Ins. Co., No. CV 22-949, (E.D. La. June 30, 2022)
Next, the Western District Court held that an appraisal demand made over a year after proof of loss was untimely. Further, the Court held that by accepting the mediation process, the defendant waived the appraisal process. Lloyd Lauw Collision Repair Ctr. LLC v. AmTrust Ins. Co., No. 2:22-CV-00756, (W.D. La. June 8, 2022)
Next, the court in Lake Charles Instruments Inc. v. Scottsdale Ins. Co. the Western District Court held that the plaintiff’s secretary and treasurer, Keith Greicar, could testify at trial and can be considered an expert in order to prove plaintiff’s loss of business income after Hurricane Laura. The defense attempted to argue that she is not qualified as an expert and should be considered a lay witness only. However, the Court held that based on her knowledge and experience of the business's operations after the 2020 hurricane season, she may also be able to offer testimony that will rebut the opinions offered by Scottsdale's experts. Lake Charles Instruments Inc. v. Scottsdale Ins. Co., No. 2:21-CV-00893, (W.D. La. July 1, 2022)