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Lambert v. Allstate Property and Casualty Insurance Co.

United States District Court, E.D. Louisiana

February 19, 2019

MARY LAMBERT, ET AL.
v.
ALLSTATE PROPERTY AND CASUALTY INSURANCE COMPANY, ET AL.

         SECTION: "A" (4)

          ORDER AND REASONS

          JAY C. ZAINEY UNITED STATES DISTRICT JUDGE.

         Before the Court is a Motion for Partial Summary Judgment (Rec. Doc. 48) filed by Defendant Government Employees Insurance Company (“GEICO”). Plaintiffs Matthew Lambert and Candace Lambert Lemond (herein after collectively referred to as “Plaintiffs”), on behalf of the deceased Mary Lambert, oppose the motion (Rec. Doc. 56) and GEICO has replied (Rec. Doc. 61). This motion, noticed for submission on January 9, 2019, is before the Court on the briefs without oral argument. Having considered the motion, memoranda of counsel, the opposition, the reply, the record, and the applicable law, the Court finds that Defendant's Motion for Partial Summary Judgment (Rec. Doc. 48) is GRANTED for the reasons set forth below.

         I. Background

         On April 15, 2015, while operating a motor vehicle, Mary Lambert (“Lambert”) was struck by another vehicle operated by Servio Rolando Murcia Ortiz (“Ortiz”). (Rec. Doc. 1 Complaint, p. 3). Pursuant to diversity of citizenship, 28 U.S.C. § 1332, subject matter jurisdiction, Lambert brought the instant suit and named several defendants to recover for injuries and damages sustained as a result of the motor vehicle accident. (Id.). Before her death, Lambert settled her claims against Imperial Fire and Casualty Company and Allstate Property and Casualty Insurance Company. (Rec. Doc. 56, p. 2).[1] Lambert, now deceased, is substituted by Matthew Lambert and Candace Lambert Lemond. (Rec. Doc. 55). The claims that remain pending against GEICO include payments in accordance with the policy's under-insured motorist coverage and pursuant to La. Rev. Stat. 22 §§ 1892 and 1973 statutory damages and attorney's fees for bad faith handling of Lambert's claim. (Rec. Doc. 1 Complaint, p. 8). GEICO now requests this Court to grant partial summary judgment dismissing Plaintiffs' claims for the bad faith statutory penalties. (Rec. Doc. 48, p. 1).

         II. Legal Standard

         Summary judgment is appropriate only if “the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, ” when viewed in the light most favorable to the non-movant, “show that there is no genuine issue as to any material fact.” TIG Ins. Co. v. Sedgwick James, 276 F.3d 754, 759 (5th Cir.2002) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-50 (1986)). A dispute about a material fact is “genuine” if the evidence is such that a reasonable jury could return a verdict for the non-moving party. Id. (citing Anderson, 477 U.S. at 248). The court must draw all justifiable inferences in favor of the non-moving party. Id. (citing Anderson, 477 U.S. at 255). Once the moving party has initially shown “that there is an absence of evidence to support the non-moving party's cause, ” Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986), the non-movant must come forward with “specific facts” showing a genuine factual issue for trial. Id. (citing Fed.R.Civ.P. 56(e); Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 587 (1986)). Conclusory allegations and denials, speculation, improbable inferences, unsubstantiated assertions, and legal arguments do not adequately substitute for specific facts showing a genuine issue for trial. Id. (citing SEC v. Recile, 10 F.3d 1093, 1097 (5th Cir.1993)).

         III. Discussion

         GEICO argues that partial summary judgment is proper regarding Plaintiffs' bad faith/unfair trade practice and related breach of contract causes of action. (Rec. Doc. 48-6, p.1) GEICO argues that (1) under the terms of the policy, Texas law applies; (2) under Louisiana choice-of-law codified provisions, Texas law applies to the policy; and (3) under Texas law, Plaintiffs' claims of breach of contract and statutory bad faith and/or unfair trade practices should be dismissed, with prejudice, at Plaintiffs' costs. In the alternative, GEICO argues that Plaintiffs cannot be successful in accordance with Louisiana law because there is a reasonable and legitimate question as to the extent of the liability. (Id. at 12).

         Plaintiffs respond that the Texas and Louisiana uninsured motorist provisions are virtually identical, and both of these sets of laws provide a claim for bad faith practices including sanctions and attorney's fees. (Rec. Doc. 56, p. 2). Plaintiffs also argue that the Texas Rules of Civil Procedure are not applicable because jurisdiction in this case is based on diversity of citizenship. (Rec. Doc. 56, p. 3).

         A. Choice-of-Law

         In a diversity action, federal courts are bound to apply the forum state's substantive law. Erie R.R. v. Tompkins, 304 U.S. 64, 78 (1938). Where a choice of law issue is involved, we apply the forum state's choice of law rules. Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496-97 (1941); Kuchenig v. California Co., 410 F.2d 222, 224 (5th Cir.1969). Accordingly, this Court must determine whether the Louisiana courts would enforce the parties' choice of Texas law to govern their contract and related breach of contract claims.

         Louisiana's choice-of-law provisions are codified in Book IV of the Louisiana Civil Code. Louisiana Civil Code Article 3540 titled “Party autonomy” states the general rule that parties may choose which state's law will govern disputes arising out of the contract. It provides:

All other issues of conventional obligations are governed by the law expressly chosen or clearly relied upon by the parties, except to the extent that law contravenes the public policy of the state whose law ...

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