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Henderson v. State Farm Mutual Automobile Insurance Co.

Court of Appeals of Louisiana, Second Circuit

August 9, 2017

ALICE HENDERSON Plaintiff-Appellant
v.
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY Defendant-Appellee

         Appealed from the Monroe City Court for the Parish of Ouachita, Louisiana Trial Court No. 2015CV02125 Honorable Jefferson Bryan Joyce, Judge

          ANTHONY BRUSCATO Counsel for Appellant

          DAVENPORT, FILES, & KELLY, LLP By: Martin Shane Craighead Counsel for Appellee

          Before DREW, STONE, and BLEICH (Pro Tempore), JJ.

          STONE, J.

         Alice Henderson appeals the trial court's judgment finding State Farm Mutual Automobile Insurance Company was not arbitrary, capricious, or without probable cause in denying her insurance claim. For the following reasons, we affirm.

         FACTS AND PROCEDURAL HISTORY

         On March 6, 2015, [1] Alice Henderson ("Henderson") backed her 2005 Lincoln Town Car into a concrete pillar ("pole"). Henderson alleged her insurer, State Farm Mutual Automobile Insurance Company ("State Farm"), instructed her to take the vehicle to Hixson Ford of Monroe ("Hixson Ford") for an estimate of the damages. On March 17, 2015, Henderson's vehicle was inspected by Bridget Moseley, who estimated $1, 748.77 in damages. The estimate included damage to the vehicle's left rear bumper and replacement of the impact bar and a deflector.

         According to State Farm, Henderson was not instructed to take her vehicle to Hixson Ford, but to Lee Edwards Mazda in Monroe. After becoming aware of the miscommunication, State Farm told Henderson to take the vehicle to Lee Edwards Mazda. On May 18, 2015, Henderson took the vehicle to Lee Edwards Mazda where it was inspected by Lisa Chain ("Chain"). Chain estimated the damages to the left rear bumper at $1, 167.77. Chain wrote a check to Henderson totaling $916.77, which was the estimate minus Henderson's $250 deductible.

         Three weeks later, Henderson contacted State Farm to complain that the vehicle had "sat down" on its tires, and State Farm had the vehicle towed to Hixson Ford. On April 7, 2015, Donnie Vocker ("Vocker") inspected the vehicle's air suspension system, including the vehicle's air compressor that inflates the rubber bladders when the vehicle is cranked. Vocker explained that the air compressor seized up because it was working too hard and activating more often to compensate for air loss in the rubber bladders. Vocker attributed the air loss to uniform "dry rot" cracks in the rubber bladders. Vocker determined the dry rot cracks were not a result of the accident, but the result of normal wear and tear based on the age of the vehicle. Vocker shared his diagnosis with State Farm adjuster, Randy Debruhl ("Debruhl"), who also observed significant dry rotting in the rubber bladders. Ultimately, Henderson's insurance claim was denied.

         Henderson subsequently filed suit against State Farm claiming that State Farm unreasonably failed to repair the vehicle. A trial on the matter was held on May 3, 2016. On July 7, 2016, the trial court found there was insufficient evidence to prove the vehicle's air suspension system failed because of the accident. The trial court rendered a final judgment declaring State Farm was not arbitrary, capricious, or without probable cause in denying Henderson's insurance claim. Henderson now appeals.

         DISCUSSION

         Henderson claims State Farm breached its duty under La. R.S. 22:1892 and 1973 to adjust her insurance claim fairly and in good faith. According to Henderson, State Farm had a statutory obligation to perform adequate tests on the vehicle's air suspension system and not simply rely on Vocker and Debruhl's "visual inspection." Despite hearing testimony from mechanic Frank Walters ("Walters") that the rubber bladders were not suffering from air loss, Henderson argues State Farm continues to arbitrarily deny her insurance claim.

         An insurer owes its insured a duty of good faith and fair dealing. As such, an insurer has an affirmative duty to adjust claims fairly and promptly and to make a reasonable effort to settle claims. La. R.S. 22:1973(A). Both La. R.S. 22:1892(B)(1) and La. R.S. 22:1973(B)(5) and (C) provide for penalties, including attorney fees, against an insurer whose failure to pay a claim after receiving satisfactory proof of loss is found to be arbitrary, capricious, or without probable cause. Both statutes are penal in nature and must be strictly construed. Cooper v. ...


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