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Wells v. Southern Fidelity Insurance Co.

United States District Court, E.D. Louisiana

January 7, 2019

LETICIA WELLS
v.
SOUTHERN FIDELITY INSURANCE COMPANY, ET AL.

         SECTION: “H”

          ORDER AND REASONS

          JANE TRICHE MILAZZO, UNITED STATES DISTRICT JUDGE

         Before the Court is Defendant Southern Fidelity Insurance Company's (“SFIC”) Motion for Summary Judgment (Doc. 35). For the following reasons, the Motion is GRANTED.

         BACKGROUND

         This insurance dispute arose after a tornado ripped through New Orleans East and damaged Plaintiff Leticia Wells's home. On February 7, 2017, Plaintiff reported a claim with SFIC, her homeowner's insurer, for the damage to her home caused by the tornado. The next day, SFIC sent an adjuster to Plaintiff's home. The adjuster advised SFIC that it should hire an engineer to inspect the damages and estimate the cost of repair. On February 16, 2017, the engineer hired by SFIC inspected Plaintiff's property. SFIC received reports from the engineer and the adjuster on March 9, 2017. The adjuster's report estimated the cost of repair to Plaintiff's home at $31, 960.28. On March 13, 2017, SFIC paid Plaintiff the full amount of the adjuster's estimate.

         Plaintiff then hired a contractor who estimated that it would cost more than $270, 000 to repair her home. SFIC received notice of this contractor's estimate on May 24, 2017. Shortly thereafter, Plaintiff invoked the appraisal process provided for by her insurance policy (“the Policy”) to resolve the dispute about the cost of repair.[1] The parties each chose appraisers, the appraisers inspected Plaintiff's property, and each appraiser estimated the cost to repair the property.

         On October 3, 2017, SFIC received the appraisal award that resulted from the appraisal process. About two weeks later, on October 18, 2017, SFIC paid Plaintiff $13, 406.12-the difference between the appraisal award and the amount SFIC had already paid her minus the policy's $5, 000 deductible.

         On January 19, 2018, Plaintiff filed suit against SFIC in the Civil District Court for the Parish of Orleans.[2] In her Complaint, Plaintiff made breach of contract and bad faith insurance claims under Louisiana law against SFIC.[3] SFIC removed Plaintiff's suit on February 19, 2018.[4] The case initially was assigned to then-Chief Judge Kurt Engelhardt. On May 14, 2018-several days before the case was reassigned to this Court-Judge Engelhardt issued a ruling confirming the parties' appraisal award and denying Plaintiff's Motion to Vacate the appraisal award.[5]

         On June 8, 2018, SFIC moved for summary judgment.[6] Plaintiff opposes.[7]

         LEGAL STANDARD

         “The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.”[8] “As to materiality . . . [o]nly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment.”[9] Nevertheless, a dispute about a material fact is “genuine” such that summary judgment is inappropriate “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.”[10]

         In determining whether the movant is entitled to summary judgment, the Court views facts in the light most favorable to the non-movant and draws all reasonable inferences in his favor.[11] “If the moving party meets the initial burden of showing that there is no genuine issue of material fact, the burden shifts to the non-moving party to produce evidence or designate specific facts showing the existence of a genuine issue for trial.”[12] Summary judgment is appropriate if the non-movant “fails to make a showing sufficient to establish the existence of an element essential to that party's case.”[13]

         “In response to a properly supported motion for summary judgment, the nonmovant must identify specific evidence in the record and articulate the manner in which that evidence supports that party's claim, and such evidence must be sufficient to sustain a finding in favor of the nonmovant on all issues as to which the nonmovant would bear the burden of proof at trial.”[14] The Court does “not . . . in the absence of any proof, assume that the nonmoving party could or would prove the necessary facts.”[15] Additionally, “[t]he mere argued existence of a factual dispute will not defeat an otherwise properly supported motion.”[16]

         LAW AND ANALYSIS

         The Court will first address Plaintiff's breach of contract claims before turning to her bad faith insurance claims.

         I. Breach of Contract

          “Under Louisiana law, ‘[a]n insurance policy is a contract between the parties and should be construed by using the general rules of interpretation of contracts set forth in the Louisiana Civil Code.'”[17] “Interpretation of a contract is the determination of the common intent of the parties.”[18] “When the words of a contract are clear and explicit and lead to no absurd consequences, no further interpretation may be made in search of the parties' intent.”[19] “Courts lack the authority to alter the terms of insurance contracts under the guise of contractual interpretation when the policy's provisions are couched in unambiguous terms.”[20]

         Plaintiff alleges that SFIC breached the Policy by failing to pay the full cost of repair necessary to fix her home after the tornado damaged it. SFIC responds that this Court's confirmation of the appraisal award that SFIC paid to Plaintiff for the damage ...


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