June 2022 Newsletter: Latest Developments in Louisiana Hurricane Damage Law
In an important decision, the Western District Court in Rutledge Invs. LLC v. Scottsdale Ins. Co. held that contractors who are hired to perform damage reviews and who prepare initial estimates do not have to qualify as experts and are not required to prepare expert reports prior to trial. In Rutledge, the plaintiff argued that the conclusions and opinions of his hired contractors, Mayo and Liles, arise from firsthand knowledge, not from information acquired as a result of this lawsuit and thus they are not required to submit expert reports under Rule 26(a)(2)(B). The plaintiff further argued that even if a report was required under Rule 26(a)(2)(B), these witnesses should not be precluded from giving opinion testimony pursuant to Fed. R. Civ. P. 37 which provides that such evidence should not be excluded if the failure was “substantially justified or is harmless.” Rutledge asserted that because the defendant has taken the deposition of both Mayo and Liles, the Defendant was fully aware of what testimony they will provide and there is no surprise. The Court held that plaintiff’s contractors, Mayo and Liles, are allowed to give their opinion testimony which is based on their own perception if a proper foundation is laid and were not required to submit experts reports.Rutledge Invs. LLC v. Scottsdale Ins. Co., No. 2:21-CV-00364, 2022 WL 1521424, at *1 (W.D. La. Mar. 22, 2022)
Next, the Western District Court case of Webster v. Strategic Claim Consultants, LLC. expanded on the rights of the plaintiffs to go after fraudulent public adjusters. In Webster, the plaintiff contracted with Strategic Claim Consultants, LLC, to perform public adjusting services. After conducting their services, the plaintiff raised specific allegations of fraudulent billing practices and misrepresentation against SCC's public adjuster license status as well as the general allegation that SCC and that SCC’s president/CEO Brandon Lewis “performed the foregoing fraudulent and unethical conduct knowingly and intentionally.” The CEO, Brandon Lewis, was not listed and not included on the contract. However, the Plaintiff noted that even though Brandon Lewis was not named specifically in the contract, an LLC member or manager may be held personally liable for a fraud committed against a third party. La. Rev. Stat. § 12:1320(D). This applies even when the member is acting on behalf of the LLC and is not a party to the contract at issue. Gandhi v. Sonal Furniture and Custom Draperies, LLC, 192 So.3d 783, 791 (La. Ct. App. 2d Cir. 2015). Accordingly, plaintiff's allegations are sufficient as to the fraud claim against Brandon Lewis even though his name was not in the contract written between plaintiff and Strategic Claim Consultants. Webster v. Strategic Claim Consultants LLC, No. 2:22-CV-00559, (W.D. La. Apr. 12, 2022).
In another important decision, the Eastern District Court in Waguespack v. Homesite Ins. Co., No. CV 22-181, (E.D. La. Feb. 28, 2022) held that the defendants were not allowed to remove the case to federal court because one of the defendant’s notices of consent of removal was provided just one day late. In Waguespack, the plaintiff suffered damage to his home as a result of Hurricane Ida. Waguespack filed his action in 23rd Judicial District Court in St. James Parish of Louisiana against his homeowner’s insurance carriers, Progressive and Homesite, asserting claims for breach of contract and bad faith. Under 28 U.S.C.1446(b), a defendant has a right to remove a matter to federal court, however, a civil action must be removed within 30 days after the defendant receives a copy of the initial pleading “setting forth the claim for relief upon which such action or proceeding is based, or within 30 days after the service of summons upon the defendant if such initial pleading has then been filed in court and is not required to be served on the defendant, whichever period is shorter. In this matter, even though Progressive provided notice of consent of removal within the required 30 days, Homesite's notice of consent of removal was filed 31 days after the defendants were served. Thus, the Court ruled it was untimely even though it was one day late, and even though Progressive properly provided its notice of consent. As such, the matter was remanded back to the 23rd Judicial District Court in St. James Parish, which is generally a more favorable venue to plaintiffs.
In another important decision for plaintiffs in hurricane damage cases, The Western District Court in Joli D Properties LLC v. Underwriters at Lloyds London, found that the defendant, Lloyds of London, was subject to penalties under Louisiana R.S. 22:1973 after a settlement agreement was reached because the plaintiff sustained damage to its property as a result of Hurricane Laura. Under Louisiana R.S. 22:1973, settlement checks are to be received by plaintiffs within 30 days of a reached settlement agreement. In Joli D Properties LLC, the defendant, Lloyds of London, did not write the checks until one (1) day after the deadline, and instead of mailing the checks to Plaintiff's counsel, Lloyd's mailed the checks to Defense counsel, which further delayed payment. The Court was also not persuaded by Defense counsel's arguments that it was justified in the late payments and/or that the Governor's suspension of legal deadlines would allow Lloyd's to escape its obligations under Louisiana R.S. 22:1973. Joli D Properties LLC v. Underwriters at Lloyds London, No. 2:21-CV-04462, 2022 (W.D. La. Apr. 18, 2022).