United States District Court, E.D. Louisiana
ORDER AND REASONS
S. VANCE UNITED STATES DISTRICT JUDGE
the Court is defendants State Farm Fire and Casualty
Company's and State Farm Mutual Automobile Insurance
Company's motion to dismiss plaintiff's claims for
penalties and attorney's fees.Because plaintiff has failed
to plausibly allege that he is entitled to this relief, the
Court grants the motion. The Court also grants plaintiff
leave to amend his complaint to cure the deficiency.
case arises from a car accident. On August 11, 2016,
plaintiff was allegedly stopped in traffic on Esplanade
Avenue when another driver failed to stop and hit the back of
his car. According to plaintiff, the impact caused
him severe injuries. Plaintiff claims that his injuries were
caused by the driver's negligence.
the accident, plaintiff settled with the other driver
involved in the accident, and with the driver's insurance
company. He then filed this action on August 6,
2018 in Orleans Parish against his uninsured/under insured
and excess claim insurers, State Farm Mutual Automobile
Insurance Company and State Farm Fire and Casualty Company,
claiming that the insurers were liable for the driver's
negligence. On November 16, 2018, State Farm Fire and
Casualty Company removed the case to this Court on the basis
of diversity jurisdiction. On January 7, 2019, plaintiff filed an
amended complaint alleging that the defendants failed to
fairly adjust and settle his claim in bad faith and seeking
statutory penalties and attorney's fees.
have filed a motion to dismiss plaintiff's claims for
penalties and attorney's fees. Plaintiff opposes the
survive a Rule 12(b)(6) motion, a party must plead
“sufficient factual matter, accepted as true, to
‘state a claim to relief that is plausible on its
face.'” Ashcroft v. Iqbal, 556 U.S. 662,
678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550
U.S. 544, 570 (2007)). A claim is facially plausible when the
party pleads facts that allow the court to “draw the
reasonable inference that the defendant is liable for the
misconduct alleged.” Id. at 678. A court must
accept all well-pleaded facts as true and must draw all
reasonable inferences in favor of the nonmoving party.
See Lormand v. U.S. Unwired, Inc., 565 F.3d 228, 232
(5th Cir. 2009).
legally sufficient complaint must establish more than a
“sheer possibility” that the party's claim is
true. Iqbal, 556 U.S. at 678. It need not contain
detailed factual allegations, but it must go beyond labels,
legal conclusions, or formulaic recitations of the elements
of a cause of action. Id. In other words, the face
of the complaint must contain enough factual matter to raise
a reasonable expectation that discovery will reveal relevant
evidence of each element of the party's claim.
Lormand, 565 F.3d at 257. The claim must be
dismissed if there are insufficient factual allegations to
raise a right to relief above the speculative level,
Twombly, 550 U.S. at 555, or if it is apparent from
the face of the complaint that there is an insuperable bar to
relief, Jones v. Bock, 549 U.S. 199, 215 (2007).
Failure to State a Claim
Punitive damages are prohibited under Louisiana law unless
authorized by statute. Warren v. Shelter Mut. Ins.
Co., 233 So.3d 568, 586 (La. 2017) (“It is
well-settled in Louisiana that punitive damages are available
only where authorized by statute.”). Two statutes allow
plaintiffs to recover punitive damages when insurers
arbitrarily or capriciously fail to pay a claim. See
La. R.S. 22:1892, 22:1973. Plaintiffs may also recover
attorney's fees under Section 1892. La. R.S.
22:1892(b)(1). Statutory penalties are not warranted when the
insurer has a reasonable basis to defend the claim and acts
in good-faith reliance on that defense. Reed v. State
Farm Mut. Auto Ins. Co., 857 So.2d 1012, 1021 (La.
2003). The bad faith statutes are penal in nature and must be
strictly construed. Id. at 1020.
1892 requires that an insurer pay claims or make an offer of
settlement within thirty days of receipt of a satisfactory
proof of loss. La. R.S. 22:1892. In order to recover under
Section 1892, a claimant must demonstrate “that (1) an
insurer has received satisfactory proof of loss, (2) the
insurer fail[ed] to tender payment within thirty days of
receipt thereof, and (3) the insurer's failure to pay is
arbitrary, capricious or without probable cause.”
La. Bag Co., Inc. v. Audubon Indem. Co., 999 So.2d
1104, 1112-13 (La. 2008). The Louisiana Supreme Court has
interpreted “arbitrary and ...