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Lewis v. 21st Century Insurance Company

United States District Court, E.D. Louisiana

February 6, 2019


         SECTION “F”



         Before the Court is the defendant's motion for partial summary judgment that California law governs the plaintiff's uninsured motorist claim, and, therefore, the plaintiff's claims for statutory penalties and attorney's fees under La. R.S. §§ 22:1892 and/or 22:1973 must be dismissed with prejudice. For the reasons that follow, the motion is DENIED.


         This lawsuit arises from a hit-and-run motor vehicle accident and the victim's efforts to recover from her insurance carrier.

         Von Metriz Lewis is a retired nurse who spends part of the year at her residence in Louisiana and the other part at her home in California where her daughter continues to reside. On November 9, 2017, Lewis was driving her 2015 Jeep Wrangler in New Orleans when a sedan violently struck her vehicle, causing it to flip onto the driver's side. Upon impact, the driver of the sedan fled the scene. Immediately thereafter, Lewis was transported to the emergency room by ambulance where she was treated for head, neck, and back pain and admitted for overnight observation. She also was required to wear a cervical collar for several months and remains under the care of two treating physicians in New Orleans.

         Following the accident, Lewis submitted a claim to 21stCentury Insurance Company for uninsured motorist (“UM”) benefits under her personal automobile policy. In hopes of resolving the matter, Lewis presented 21st Century with an Offer of Settlement and Satisfactory Proof of Loss, but the offer was rejected. Believing the hit-and-run driver to be at fault, and believing that 21st Century had acted in bad faith in handling her claim, Lewis filed suit in Louisiana state court on April 3, 2018 to recover damages resulting from the accident, as well as statutory penalties and attorney's fees. 21st Century timely removed the action to this Court, invoking the Court's diversity jurisdiction.

         Several months later, Lewis presented 21st Century with a second Offer of Settlement and Satisfactory Proof of Loss, in which she alleged that the value of her damages exceeds the policy limits of $100, 000. 21st Century, through counsel, rejected that offer, stating:

[G]iven that this is a California policy, California law will apply. And under these circumstances, a tender is not required and further investigation is necessary. Once additional discovery is completed, 21stCentury Insurance Company will reevaluate their position regarding your client's claims.

21st Century now moves for partial summary judgment that California law governs the plaintiff's UM claim, such that her claims for statutory penalties and attorney's fees under La. R.S. §§ 22:1892 and/or 22:1973 must be dismissed with prejudice.


         Federal Rule of Civil Procedure 56 instructs that summary judgment is proper if the record discloses no genuine dispute as to any material fact such that the moving party is entitled to judgment as a matter of law. No. genuine dispute of fact exists if the record taken as a whole could not lead a rational trier of fact to find for the non-moving party. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). A genuine dispute of fact exists only “if the evidence is such that a reasonable jury could return a verdict for the non-moving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

         The mere argued existence of a factual dispute does not defeat an otherwise properly supported motion. See id. In this regard, the non-moving party must do more than simply deny the allegations raised by the moving party. See Donaghey v. Ocean Drilling & Exploration Co., 974 F.2d 646, 649 (5th Cir. 1992). Rather, he must come forward with competent evidence, such as affidavits or depositions, to buttress his claims. Id. Hearsay evidence and unsworn documents that cannot be presented in a form that would be admissible in evidence at trial do not qualify as competent opposing evidence. Martin v. John W. Stone Oil Distrib., Inc., 819 F.2d 547, 549 (5th Cir. 1987); Fed.R.Civ.P. 56(c)(2). “[T]he nonmoving party cannot defeat summary judgment with conclusory allegations, unsubstantiated assertions, or only a scintilla of evidence.” Hathaway v. Bazany, 507 F.3d 312, 319 (5th Cir. 2007) (internal quotation marks and citation omitted). Ultimately, “[i]f the evidence is merely colorable . . . or is not significantly probative, ” summary judgment is appropriate. Anderson, 477 U.S. at 249 (citations omitted); King v. Dogan, 31 F.3d 344, 346 (5th Cir. 1994) (“Unauthenticated documents are improper as summary judgment evidence.”).

         Summary judgment is also proper if the party opposing the motion fails to establish an essential element of his case. See Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). In deciding whether a fact issue exists, courts must view the facts and draw reasonable inferences in the light most favorable to the non-moving party. Scott v. Harris, 550 U.S. 372, 378 (2007). Although the Court must “resolve factual controversies in favor of the nonmoving party, ” it must do so “only where there is an actual controversy, that is, when both parties have submitted evidence of contradictory facts.” Antoine v. First Student, Inc., 713 F.3d 824, 830 (5th Cir. 2013) (internal quotation marks and citation omitted).



         This Court, sitting in diversity, must apply Louisiana's choice-of-law rules in determining which state's substantive law governs this dispute. See Abraham v. State Farm Mutual Auto Ins. Co., 465 F.3d 609, 611 (5th Cir. 2006). The Louisiana Supreme Court has offered guidance as to the appropriate choice-of-law analysis for insurance disputes arising out of automobile accidents and concerning contacts with more than one state. In Champagne v. Ward, Louisiana's high court resolved a circuit split amongst the state's appellate courts, holding that Louisiana's uninsured/underinsured motorist law does not automatically apply to accidents occurring in Louisiana and involving a Louisiana resident. 03-3211 (La. 1/19/05); 893 So.2d 773. Rather, the Champagne court determined, where the uninsured motorist laws of Louisiana and the foreign state differ, a choice-of-law analysis as codified in the Louisiana Civil Code must be performed. Id. at 786.


         In this case, it is undisputed that the uninsured motorist laws of Louisiana and California differ in significant respects. Louisiana law requires an insurer to tender the undisputed amount of a claim within a fixed period of time and permits penalties and attorney's fees in the absence of tender, while California law does not require tender and mandates binding arbitration of disputes concerning the uninsured driver's liability and the extent of the resulting damages. Compare McDill v. Utica Mutual Ins. Co., 475 So.2d 1085, 1091 (La. 1985) (“If . . . the insured has made a showing that the insurer will be liable for some general damages, the insurer must tender the reasonable amount which is due.”) with Rangel v. Interinsurance Exch., 842 P.2d 82, 91 (Cal. 1992) (“[P]ayment may be delayed until the amount of the loss payable has been determined in arbitration.”).

         Under Louisiana law, La. R.S. § 22:1892(B)(1) and La. R.S. § 22:1973(B)(5) and (C) provide for penalties against an insurer whose failure to pay a claim after receiving satisfactory proof of loss is “arbitrary, capricious, or without probable cause.” Although the statutes differ in the time periods allowed for payment, both are “penal in nature and must be strictly construed.” Reed v. State Farm Mut. Auto Ins. Co., 2003-0107 (La. 10/21/03), 857 So.2d 1012, 1020. Upon the insurer's receipt of satisfactory proof of loss, La. R.S. § 22:1892 requires payment within thirty days, subject to a mandatory penalty of fifty percent of the amount due, as well as reasonable attorney's fees and costs, whereas La. R.S. § 22:1973(B)(5) and (C) requires payment within sixty days, subject to a discretionary penalty of no more than two times the damages sustained. In the context of an uninsured motorist claim, “satisfactory proof of loss” constitutes sufficient facts to fully apprise the insurer: (1) that “the owner or operator of the other vehicle involved in the accident was uninsured or underinsured; (2) that he was at fault; (3) that such fault gave rise to damages; and (4) [of] the extent of those damages.” McDill, 475 So.2d at 1089. Once these criteria are met, “the insurer must tender the reasonable amount which is due, ” even if “the insured in unable to prove the exact extent of his general damages.” Id. at 1091.

         California law, on the other hand, does not require tender when the insurer and insured cannot agree on the extent of the damages. See Aronson v. State Farm Ins. Co., No. 99-4074, 2000 U.S. Dist. LEXIS 6976, at *25 (C.D. Cal. May 15, 2000); Bouton (Lloyd) v. USAA Casualty Ins. Co. (2008) 43 Cal.4th 1190, 1193. Title 10, California Code of Regulations, Section 2695.7(h) provides, in part, that an insurer, “[u]pon acceptance of the claim in whole or in part . . . shall immediately, but in no event more than thirty (30) calendar days later, tender payment or otherwise take action to perform its claim obligation.” However, California Insurance Code § 11580.2(f) clarifies that “the determination as to whether the insured shall be legally entitled to recover damages, and if so entitled, the amount thereof, shall be made by agreement between the insured and the insurer or, in the event of disagreement, by arbitration.” (emphasis added). Section 11580.2(i), in turn, provides:

(1) No cause of action shall accrue to the insured under any policy or endorsement provision issued pursuant to this section unless one of the following actions have been taken within ...

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