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Sacks v. Allstate Property And Casualty Insurance Co.

United States District Court, E.D. Louisiana

October 24, 2017

RALPH SACKS
v.
ALLSTATE PROPERTY AND CASUALTY INSURANCE COMPANY

         SECTION “L” (5)

          ORDER AND REASONS

          ELDON E. FALLON, UNITED STATES DISTRICT JUDGE.

         Before the Court are cross-motions for summary judgment. See Rec. Docs. 11 & 21. Plaintiff Ralph Sacks (“Sacks”) asks this Court to grant summary judgment on the issue of bad faith damages and to award penalties and attorney's fees against Allstate. On the other hand, Defendant Allstate Property and Casualty Insurance Co. (“Allstate”) argues that there is insufficient information to support a bad faith claim. Having considered the parties' arguments, submissions and applicable law, the Court now issues this Order and Reason.

         I. BACKGROUND

         This case arises from injuries Sacks allegedly sustained as a result of an automobile accident. Rec. Doc. 1-2 at 3. Plaintiff initially filed this action in the 24th Judicial Court for the Parish of Jefferson. Rec. Doc. 1 at 1. Defendant timely removed and maintained this Court has diversity jurisdiction pursuant to 28 U.S.C. § 1332.

         Plaintiff alleges he had stopped his vehicle at a stop sign on Lafayette Street at its intersection with 5th Street in Jefferson Parish, Louisiana, when he was struck from behind by Claire Gregorie, who was found to be at fault for the accident. Rec. Doc. 1-2 at 3-4. Plaintiff claims he sustained three herniated cervical discs and underwent a cervical epidural injection and shoulder surgery. Id. at 5. State Farm Fire Insurance Company provided a policy of liability to Ms. Gregorie at the time of the accident. Id. at 4. On June 6, 2016, State Farm tendered its policy limit of $15, 000.00 to Plaintiff. Id. at 5.

         The instant dispute arises from Plaintiff's uninsured/underinsured motorist policy with Defendant Allstate, which Plaintiff had at the time of the accident. Id. On May 3, 2016, Plaintiff made a demand for an unconditional tender of the policy. See id.; Rec. Doc. 11-1 at 3. Plaintiff alleges he sent in the necessary supporting medical records and bills with his demand, and that this constituted satisfactory proof of loss for Allstate to make an unconditional tender. Rec. Doc. 21-1 at 3. Allstate claims that Plaintiff's initial demand package did not include the necessary declaration form containing information about the tortfeasor's underlying coverage. Rec. Doc. 11-1 at 3. Allstate avers that it notified Plaintiff's counsel of the missing form on May 16, 2016. Id. Allstate did not receive the missing information until August 1, 2016. Id. at 3-4.

         After reviewing the medical records, Allstate notified Plaintiff that the medical record had missing information: it contained no express opinions from Plaintiff's physicians linking Plaintiff's medical treatment to the accident. Rec. Doc. 11-1 at 3-4. Therefore, on August 17, 2016, Allstate requested further information from Plaintiff's physicians in order to determine whether any of the alleged injuries were due to preexisting or subsequent injuries. Rec. Doc. 11-1 at 4. Allstate alleges that because it was missing this material information, a question of causation remained, and therefore it did not initiate tender to Plaintiff. Id.

         On October 11, 2016, Plaintiff initiated this instant lawsuit, alleging that Allstate failed to make a tender. See Rec. Doc. 1-2. Specifically, Plaintiff claims Allstate acted in bad faith by (1) failing to make an unconditional tender within 30 days of satisfactory proof of loss in accordance with Louisiana Revised Statutes 22:1892 and 22:1973; (2) failing to properly settle the claim in a timely manner after receipt of satisfactory proof of loss in accordance with Louisiana Revised Statutes 22:1892 and 22:1973; and (3) failing to timely investigate the veracity of the claim. Id. at 6.

         After the lawsuit was filed, Allstate conducted discovery and resolved the medical causation issue. See Rec. Doc. 11-1 at 5. On May 30, 2017, it issued an unconditional tender of $107, 188.00, based on Plaintiff's shoulder arthroscopy and an epidural steroid injection. Id. Shortly thereafter, Allstate initiated an additional unconditional tender of $142, 812.00 based on Plaintiff's neck surgery. Id. at 5-6. This exhausted Plaintiff's policy limit. Id. at 6. The only issue that remains now is whether Allstate acted in bad faith by allegedly delaying its payments.

         II. PRESENT MOTIONS

         Defendant filed a motion for summary judgment dismissing Plaintiff's suit, arguing that, as a matter of law, there is not sufficient evidence to establish that Allstate acted in an arbitrary and capricious manner in handling Plaintiff's claim. See generally Rec. Doc. 11-1. Specifically, Allstate asserts that it had reasonable and legitimate questions about Plaintiff's insurance claim. Id. at 1. Plaintiff filed a cross-motion for summary judgment, arguing that Allstate acted in an arbitrary and capricious manner by failing to timely investigate his claim and failing to make a timely unconditional tender. Rec. Doc. 21-1 at 1.

         III. LEGAL STANDARD

         A. ...


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