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Forbes v. West American Insurance Co.

United States District Court, M.D. Louisiana

May 15, 2019




         Before the Court are three motions for summary judgment. Both parties filed responses. (Doc. 47, 48, 49). For the reasons stated herein, Defendant's Motion for Partial Summary Judgment Concerning Plaintiffs' Bad Faith Claim Under La. Rev. Stat. 22:1892 (Doc. 44) is GRANTED IN PART AND DENIED IN PART. Defendant's Motion for Partial Summary Judgment (Doc. 45) is GRANTED IN PART and DENIED IN PART. Plaintiffs Motion for Summary Judgment Regarding Right to Payment, Credit or Offset (Doc. 46) is DENIED.

         I. BACKGROUND

         On June 9, 2015, Plaintiff Beth Forbes (Mrs. Forbes) was involved in a car accident at the intersection of Greenwell Springs Road and Monterrey Boulevard in Baton Rouge Louisiana. Mrs. Forbes was stopped at a red light in the westbound lane of Greenwell Springs Road when she was struck from behind by a Jeep Grand Cherokee driven by Clytisha Smith ("Smith"). (Doc. 1-2 at p. 7). It appears to be undisputed that Mrs. Forbes was not at fault for the accident.

         GEICO insured Smith under an auto liability policy with a §15, 000 limit, which it paid to Mrs. Forbes on December 24, 2015. (Doc. 44-1 at p. 2). At the time of the collision, Mrs. Forbes was covered by an uninsured motorist insurance policy issued by Defendant, West American Insurance Company, through her employer. It appears to be undisputed that, over time, Defendant issued six payments from the $1, 000, 000 policy totaling $780, 519.68. (Doc. 44 at p. 1). Plaintiffs, Mrs. Forbes and her husband Ben Forbes (Mr. Forbes), assert that the payments were untimely and insufficient and that Defendant "arbitrarily, capriciously, and without just caused failed to timely tender, unconditionally, sufficient sums" for their damages. (Doc. 1-2 at p. 9). Plaintiffs seek to recover for Mr. Forbes' loss of consortium under La. R.S. 22:1973 and for Mrs. Forbes' injuries under La. R.S. 22:1892.[1] (Id.)


         Pursuant to Rule 56, "[t]he [C]ourt 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." Fed.R.Civ.P. 56(a). In determining whether the movant is entitled to summary judgment, the Court views the facts in the light most favorable to the non-movant and draws all reasonable inferences in the non-movant's favor. Coleman v. Houston Independent School Dist, 113 F.3d 528, 533 (5th Cir. 1997).

         After a proper motion for summary judgment is made, the non-movant must set forth specific facts showing there is a genuine issue for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986). At this stage, the Court does not evaluate the credibility of witnesses, weigh the evidence, or resolve factual disputes. Int'l Shortstop, Inc. v. Rally's, Inc., 939 F.2d 1257, 1263 (5th Cir. 1991), cert, denied, 502 U.S. 1059 (1992). However, if the evidence in the record is such that a reasonable jury, drawing all inferences in favor of the non-moving party, could arrive at a verdict in that party's favor, the motion for summary judgment must be denied. Int'l Shortstop, Inc., 939 F.2d at 1263.

         On the other hand, the non-movant's burden is not satisfied by some metaphysical doubt as to the material facts, or by conclusory allegations, unsubstantiated assertions, or a mere scintilla of evidence. Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994). 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." Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986). In other words, summary judgment will be appropriate only "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits if any, show that there is no genuine issue as to any material fact, and that the moving party is entitled to judgment as a matter of law." Sherman v. Hallbauer, 455 F.2d 1236, 1241 (5th Cir. 1972).


         A. Mrs. Forbes' Claim Under La. R.S. 22:1892

         1. Timeliness of Payments

         Defendant seeks a judgment declaring that five of the six payments it disbursed were timely and that the maximum penalty for Mrs. Forbes' damages under La. R.S. 22:1892 is $222, 033.22. La. R.S. 22:1892 requires an insurer to tender "the amount of any claim due any insured within thirty days after receipt of satisfactory proofs of loss from the insured." The failure to do so, if found to be "arbitrary, capricious, or without probable cause," subjects the insurer to a penalty of fifty percent damages on the amount due. Id.

         Defendant contends that its payments made on April 19, 2016, July 18, 2017, October 10, 2017, January 31, 2018, and July 3, 2018 were timely as a matter of law. Plaintiffs dispute the timeliness of the April 19, 2016 payment. Plaintiffs assert that their payment demand was received by Defendant on March 17, 2016 while Defendant claims it was received on March 21, 2016. (Doc. 44-3 at p. 144, 181-182). The dispute over the date stems from the location to which the demand was mailed. All payment demands to Defendant are sent to mail centers in either Kentucky or California, depending on the type of policy an insured party holds. (Doc. 44-3 at p. 183). Insured parties are informed by Defendant which address should be used. Id. The mail centers are owned and operated by an outside vendor who Defendant has contracted to scan the mail sent to Defendant. Id. In this case, it is undisputed that Defendant directed Plaintiffs to mail their payment demand to California, but Plaintiffs instead sent it to Kentucky. (Doc. 44-3 at p. 179). Defendant asserts that Plaintiffs' mistake resulted in a four to five day delay of the demand's arrival at the correct claims center. Id. Ultimately, it appears to be undisputed that the delay in receipt ...

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