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Lind v. United Services Automobile Association

Court of Appeals of Louisiana, First Circuit

January 30, 2018


         On Appeal from the Nineteenth Judicial District Court In and for the Parish of East Baton Rouge State of Louisiana No. C622646 Sec. 26 The Honorable Donald Johnson, Judge Presiding

          David D. Lind Alexandria, LA Attorney for Plaintiffs/ Appellees Frederick Lind, Jr. and Mary E. Lind

          Keith L. Richardson Baton Rouge, LA Attorney for Defendant/Appellant United Services Automobile Association


          HOLDRIDGE, J.

         Defendant, United States Services Automobile Association (USAA), appeals a judgment rendered in favor of plaintiffs, Dr. Fredrick Lind, Jr. and Mary Elizabeth Lind, awarding actual damages and penalties. We reverse both awards, conduct a de novo review of the record, and render a damage award and a penalty award based on that review.


         In the early 1980's, the Linds purchased a 1972 Maserati Ghibli SS, a very rare vehicle, from Edmond Waterman for approximately $20, 000.00. In 1995, the Linds hired Wedge Kyes Import Specialties, Inc. to repair the vehicle's engine and retained Pierre Mabile to do restoration body work on the vehicle. Later, the Linds hired Alex Peters to complete the engine repair. In 2006 or 2007, Wedge Kyes transferred the vehicle to Mr. Peters, who operated out of a shop in New Orleans. Sometime thereafter, Dr. Lind inspected his vehicle inside Mr. Peters' shop. On July 19, 2012, Dr. Lind made a trip to Mr. Peters' shop and discovered that Mr. Peters and the vehicle were nowhere to be found. Dr. Lind reported the vehicle stolen to police a few days later and made a claim with USAA, which issued a policy providing comprehensive coverage on the Maserati to the Linds, reporting the vehicle as stolen. On July 31, 2012, USAA notified Dr. Lind that it opened a claim and was investigating the matter.

         The Linds eventually found the vehicle on a rooftop of another mechanic shop in New Orleans owned by Milton F. "Chip" Hilbert. It is undisputed that the vehicle was badly deteriorated when it was found and that it was missing various component parts, including its engine, transmission, radiator, and exhaust system.

         By letter dated November 29, 2012, USAA informed Dr. Lind that it was denying coverage of the vehicle because there was no evidence that a theft of the vehicle had occurred. By letter dated January 30, 2013, Dr. Lind was notified that USAA could not cover the claim on the basis of vandalism because its appraiser had found no evidence of vandalism.

         On June 27, 2013, the Linds filed this lawsuit for "negligent repair" and other damages against USAA, Mr. Peters, Wedge Kyes, and Mr. Hilbert. In the petition, the Linds alleged that Mr. Peters removed the engine, transmission, and other component parts of the vehicle from the State of Louisiana, requiring that they expend at least $70, 000.00 to replace the stolen or lost component parts. As to USAA, the Linds specifically alleged that it breached its contractual obligation to compensate them and sought to recover all replacement and repair costs. Additionally, the Lind's sought to recover penalties in the amount of two times the actual damages and attorney's fees for USAA's alleged arbitrary and capricious failure to abide by its contractual obligations.

         On August 21, 2014, the Linds voluntarily dismissed Wedge Kyes from the litigation. On August 21, 2015, the trial court granted Mr. Hilbert's motion for summary judgment, dismissing all of the Linds' claims against him with prejudice. On April 16, 2016, a preliminary default judgment was rendered against Mr. Peters, who failed to answer the lawsuit.

         On February 2, 2015, USAA made an unconditional tender in the amount of $19, 800.00 to the Linds, which was refused. A bench trial against USAA was held on July 14, 2016. The disputed issues in the case were the date on which the loss occurred, the value of the Maserati on the date of the loss, and whether USAA was arbitrary and capricious in denying the claim and waiting over two and a half years from the date USAA opened a file on the Linds' claim to make a tender of any type.

          At the outset of the trial, the court addressed the Linds' motion in limine to prevent USAA's adjuster to testify regarding a Maserati valuation. USAA stipulated that its adjuster, Bruce White, was not an expert in Maserati valuation and the Linds withdrew their motion in limine. During the one-day bench trial, the Linds presented the testimony of Dr. Lind, Mr. Mabile, Wedge Kyes, the owner of Wedge Kyes Import Specialties, Inc., and Mr. Waterman, an expert in Maserati valuations. USAA presented the testimony of its insurance adjuster, Mr. White, and the testimony of Mr. Kyes. Documentary evidence, including the USAA policy, photographs of the vehicle, ...

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