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Wood v. Allstate Indemnity Co.

United States District Court, W.D. Louisiana, Monroe Division

January 18, 2017

TODD RANDALL WOOD AND JENNIFER MCDONALD WOOD
v.
ALLSTATE INDEMNITY COMPANY

          MEMORANDUM RULING

          Karen L.Hayes, United States Magistrate Judge

         Before the court is a motion for partial summary judgment, [doc. # 31');">1], filed by Defendant Allstate Insurance Company. Plaintiffs oppose the motion and have filed a motion to strike an affidavit attached to Defendant's motion for partial summary judgment. [doc. #35]. For reasons stated below, Defendant's motion for partial summary judgment is DENIED and Plaintiffs' motion to strike is DENIED as MOOT.

         Background

         On July 28, 201');">15, Todd Randall Wood and Jennifer McDonald Wood (the “Woods”) filed the instant suit against Allstate Indemnity Company (“Allstate”) in the Third Judicial District Court, Union Parish, Louisiana, alleging that Allstate has failed to pay an insurance claim under a homeowner's policy Allstate issued to the Woods. [doc. #1');">1-1');">1]. The Woods lost their home on December 8, 201');">14, due to a fire and assert that Allstate's policy provided coverage for all losses incurred. Id. ¶¶ 2, 8-1');">10.

         The Woods argue that Allstate's actions in failing to timely pay the claim have been arbitrary, capricious, unreasonable, and without probable cause, entitling the Woods to recover penalties and attorney's fees under Louisiana law. Id.1');">17. The Woods further contend that Allstate has breached its duty of good faith and fair dealing by failing to reach a prompt, fair, and equitable resolution of the claim under the policy. Id.1');">18.

         On September 3, 201');">15, Allstate removed this matter to federal court on the basis of diversity jurisdiction, 28 U.S.C. § 1');">1332. [doc. #1');">1]. On December 2, 201');">16, Allstate filed the instant motion for partial summary judgment. [doc. #31');">1]. Allstate argues that it is entitled to partial summary judgment on the issue of penalties and attorney's fees because (1');">1) it has a reasonable basis to further investigate Plaintiffs' claim; and (2) the Woods have failed to cooperate over the course of Allstate's investigation. On December 27, 201');">16, Plaintiffs filed their response in opposition, [doc. #34], and a motion to strike an affidavit attached to Allstate's motion. [doc. #35], with an opposition thereto [doc.#48].

         This matter is now before the Court.

         Law and Analysis

         I. Summary Judgment Standard

         Summary judgment is appropriate when the evidence before a court shows “that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). A fact is “material” if proof of its existence or nonexistence would affect the outcome of the lawsuit under applicable law in the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1');">1986). A dispute about a material fact is “genuine” if the evidence is such that a reasonable fact finder could render a verdict for the nonmoving party. Id.

         “[A] party seeking summary judgment always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of ‘the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, ' which it believes demonstrate the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 1');">17');">477 U.S. 31');">17, 323 (1');">1986) (quoting Anderson, 477 U.S. at 247). “The moving party may meet its burden to demonstrate the absence of a genuine issue of material fact by pointing out that the record contains no support for the non-moving party's claim.” Stahl v. Novartis Pharm. Corp., 283 F.3d 254, 263 (5th Cir. 2002). Thereafter, if the non-movant is unable to identify anything in the record to support its claim, summary judgment is appropriate. Id. “The court need consider only the cited materials, but it may consider other materials in the record.” Fed.R.Civ.P. 56(c)(3).[1');">1" name="FN1');">1" id= "FN1');">1">1');">1]

         In evaluating a motion for summary judgment, courts “may not make credibility determinations or weigh the evidence” and “must resolve all ambiguities and draw all permissible inferences in favor of the non-moving party.” Total E & P USA Inc. v. Kerr-McGee Oil and Gas Corp., 1');">19 F.3d 424');">71');">19 F.3d 424, 434 (5th Cir. 201');">13) (citations omitted). While courts will “resolve factual controversies in favor of the nonmoving party, ” an actual controversy exists only “when both parties have submitted evidence of contradictory facts.” Little v. Liquid Air. Corp., 1');">1069');">37 F.3d 1');">1069, 1');">1075 (5th Cir. 1');">1994) (en banc). To rebut a properly supported motion for summary judgment, the opposing party must show, with “significant probative evidence, ” that a genuine issue of material fact exists. Hamilton v. Segue Software, Inc., 232 F.3d 473, 477 (5th Cir. 2000) (emphasis added). “‘If the evidence is merely colorable, or is not significantly probative, ' summary judgment is appropriate.” Cutting Underwater Tech. USA, Inc. v. Eni U.S. Operating Co., 1');">1 F.3d 51');">12');">671');">1 F.3d 51');">12, 51');">17 (5th Cir. 201');">12) (quoting Anderson, 477 U.S. at 248).

         Relatedly, there can be no genuine dispute as to a material fact when a party fails “to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.” Celotex Corp., 477 U.S. at 322-23. When a movant bears the burden of proof on an issue, it must establish “beyond peradventure[2] all of the essential elements of the claim . . . to warrant judgment in [its] favor.” Fontenot v. Upjohn Co., 1');">11');">190');">780 F.2d 1');">11');">190, 1');">11');">194 (5th Cir. 1');">1986). In other words, the movant must affirmatively establish its right to prevail as a matter of law. Universal Sav. Ass'n v. McConnell, 1');">1993 WL 560271');">1 (5th Cir. Dec. 29, 1');">1993) (unpubl.).

         II. Insurance Law Principles

         Louisiana law provides a penalty for an insurer's failure to pay a claim within thirty days after it has received satisfactory proof of loss if the failure is arbitrary, capricious, or without probable cause. La. R.S. § 22:1');">1892(4)(B)(1');">1). It also provides that an insurer owes a duty of good faith and fair dealing to an insured and provides a penalty for the insurer's failure to pay a claim within sixty days after receiving satisfactory proof of loss if the failure was arbitrary, capricious, or without probable cause. §§ 22:1');">1973(A), (B)(6), (C). These two statutes prohibit “virtually identical” conduct, the primary difference being the time periods allowed for payment. Reed v. State Farm Mut. Auto Ins. Co., 857 So.2d 1');">101');">12, 1');">1020 (La. 2003).

         To recover statutory penalties, Plaintiffs must establish three elements: “(i) that the insurer received a satisfactory proof of loss, (ii) that the insurer failed to pay the claim within the applicable statutory period, and (iii) that the insurer's failure to pay was arbitrary and capricious.” Grilletta v. Lexington Ins. Co., 558 F.3d 359, 368 (5th Cir. 2009) (citing Boudreaux v. State Farm Mut. Auto. Ins. Co., 896 So.2d 230 (La. Ct. App. 4th Cir. 2005)).

         Plaintiffs' home burned down on December 8, 201');">14. During that time, Plaintiffs had a homeowner's insurance policy issued by Allstate. If the fire is a covered loss-i.e., if there is no defense to coverage-Allstate owes the Woods the value of the home under the policy: $1');">187, 458, less the amount paid to the mortgage holder. Dep. Wilbur Jordan & Craig Nemecek, 1');">11');">19:5-1');">16 (“Allstate Dep.”); doc. #31');">1-6, p. 2 (the “Policy”). Furthermore, if the claim is covered, Allstate will pay up to $1');">131');">1, 221');">1 for contents lost. Allstate Dep., 1');">11');">19:24-25, 1');">120:1');">1-6; Policy, at ...


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