United States District Court, E.D. Louisiana
ORDER & REASONS
the Court is Defendant State Farm Mutual Automobile Insurance
Company's Motion to Dismiss for Lack of Jurisdiction. R.
Doc. 21. Plaintiff opposes the Motion. R. Doc. 24. Having
reviewed the parties' arguments and applicable law, the
Court now issues this Order and Reasons.
case arises from an automobile accident that occurred on
November 28, 2015, on Gulf State Parkway in Gulf Shores,
Alabama. R. Doc. 1-7 at 2. Plaintiff Debra A. Federico
(“Federico”), a domicile of Jefferson Parish,
alleges she was traveling northbound on Gulf State Parkway in
Gulf Shores, Alabama when she slowed to a stop due to traffic
and was rear ended by a vehicle operated by Mary Dorgan
Nichols (“Nichols”). R. Doc. 1-7 at 2. State Farm
Mutual Automobile Insurance Company (“State
Farm”) is the liability insurance carrier for both
Plaintiff and Defendant. R. Doc. 1-7 at 2. Defendants removed
this case from the 24th Judicial District Court in Jefferson
Parish on the basis of diversity jurisdiction pursuant to 28
U.S.C. § 1332. R. Doc. 1 at 2.
alleges that the sole and proximate cause of the accident was
Defendant's negligence in failing to observe
Plaintiff's vehicle, in failing to maintain proper
control of her vehicle, yield or stop for traffic, and
following too closely. R. Doc. 1-7 at 3. Plaintiff claims
that as a result of the accident she suffered severe and
disabling injuries to her lower back, neck, left shoulder,
right shoulder, and both wrists. R. Doc. 1-7 at 3. Plaintiff
seeks to hold Defendants jointly, severely and in solido
liable for damages for past, present and future physical pain
and suffering, mental anguish, medical expenses, loss of
earnings and earning capacity, property damage, and loss of
enjoyment of life. R. Doc. 1-7 at 3. Plaintiff also seeks
underinsured motorist benefits from her
uninsured/underinsured motorist carrier, State Farm. R. Doc.
1-7 at 3.
timely answered and allege Plaintiff's claims are barred
by prescription and the applicable statutes of limitation. R.
Doc. 3 at 1-2. Defendants also raise the affirmative defenses
of failure to mitigate and comparative negligence and allege
Plaintiff failed to obey Alabama traffic laws, avoid the
accident, or act with reasonable care. R. Doc. 3 at 3.
Defendants also aver that the laws of Alabama govern this
litigation. R. Doc. 3 at 4.
April 27, 2017, Plaintiff filed an amended complaint alleging
that Defendants Mary Nichols and State Farm are liable for
punitive damages. R. Doc. 18.
Defendant State Farm's Motion to Dismiss (R. Doc.
State Farm, has filed this motion seeking to dismiss
Plaintiff's bad faith claim against State Farm in its
capacity as Plaintiffs uninsured motorist (“UM”)
insurer. R. Doc. 21-1 at 2. State Farm explains that Alabama
law applies to this diversity case, and under Alabama law
there are two different bad faith claims against insurance
companies-normal and abnormal. R. Doc. 21-1 at 2. In a normal
bad faith claim, a plaintiff must prove there was an
insurance contract between the parties, the defendant
breached the contract and refused to pay the insured claim
while they had actual knowledge there was no
“reasonably legitimate or arguable reason for that
refusal.” R. Doc. 21-1 at 3 (citing Ex parte
Simmons, 791 So.2d 371, 378 (Ala. 2000)). In an abnormal
bad faith claim, the plaintiff must prove that the insurer
intentionally failed to determine whether there was a
legitimate reason to pay the claim, rather than proving the
actual knowledge standard. R. Doc. 21-1 at 3 (citing Ex
parte Simmons, 791 So.2d at 378.).
to Defendant, Plaintiff's bad faith claim should be
dismissed because she does not clearly allege this claim in
her Complaint, and even if she had, this claim is not ripe
for consideration before this Court. R. Doc. 21-2 at 3. In
the Complaint, Plaintiff states that if State Farm violates
its duties as the UM insurer, then she seeks to recover bad
faith damages, including penalties and attorney fees. R. Doc.
21-2 at 3. Defendant argues that Plaintiff has failed to
state any facts which would support recovery on these
grounds, as she has not alleged that State Farm's
obligations under the UM policy have been triggered, or that
it violated those obligations. R. Doc. 21-1 at 3. Further,
Defendant contends that under Alabama law, a bad faith claim
against a UM insurer is not ripe as long as damages are still
in dispute. R. Doc. 21-1 at 5 (citing Ex parte Safeway
Ins. Co. of Alabama, Inc., 990 So.2d 344, 351 (Ala.
2008) (holding that plaintiff's bad faith claims were
premature while damages and liability had not yet been
determined)). Thus, Defendant avers Plaintiff's bad faith
claim should be dismissed.
Plaintiff's Response (R. Doc. 24)
opposes the Motion, and argues that State Farm has failed to
satisfy its obligations as her UM insurer. R. Doc. 24 at 1.
According to Plaintiff, on May 12, 2017, her doctor testified
that she will need two surgeries as a result of the accident
and the cost of these surgeries will trigger the UM policy.
R. Doc. 24 at 2. Plaintiff avers that State Farm is aware of
this information, yet has failed to tender the UM policy
limit. R. Doc. 24 at 2. Plaintiff contends that because the
damages “clearly” trigger the UM coverage, State
Farm is acting in bad faither for failing to tender the
policy limits. R. Doc. 24 at 2.