United States District Court, M.D. Louisiana
CHARLES NELSON, ET AL.
AMERICAS INSURANCE COMPANY
RULING AND ORDER ON DEFENDANT'S MOTION FOR
PARTIAL SUMMARY JUDGMENT ON CLAIMS UNDER LOUISIANA REVISED
W. deGRAVELLES UNITED STATES DISTRICT JUDGE.
matter comes before the Court on the Motion for Partial
Summary Judgment on Claims Under Louisiana Revised Statute
22:1318 (Doc. 31) (the “VPL
Motion”) filed by Defendant Americas Insurance
Company (“AIC” or “Defendant”).
Plaintiffs Charles Nelson and Barbara Nelson
(“Plaintiffs”) oppose the motion (Doc. 39), and
AIC has filed a reply (Doc. 50). Oral argument is not
necessary. The Court has carefully considered the law, the
facts in the record, and the arguments and submissions of the
parties and is prepared to rule.
essential facts are undisputed. Plaintiffs had a
homeowner's policy with AIC. Their property flooded.
Then, after Plaintiffs began cleanup but before they made any
major repairs, their property burned down. AIC paid
Plaintiffs certain insurance proceeds but offset the amounts
with what Plaintiffs recovered from their flood insurer.
now bring this suit seeking, among other things, to recover
the total amount of their homeowner's policy under
Louisiana's Valued Policy Law, La. Rev. Stat. Ann. §
22:1318 (“VPL”). This statute provides in
Under any fire insurance policy insuring inanimate, immovable
property in this state, if the insurer places a valuation
upon the covered property and uses such valuation for
purposes of determining the premium charge to be made under
the policy, in the case of total loss the insurer shall
compute and indemnify or compensate any covered loss
of, or damage to, such property which occurs during the term
of the policy at such valuation without deduction or
offset, unless a different method is to be used in the
computation of loss, in which latter case, the policy, and
any application therefor, shall set forth in type of equal
size, the actual method of such loss computation by the
La. Rev. Stat. Ann. § 22:1318(A) (emphasis added).
moves for summary judgment on this claim on the grounds that
Plaintiffs' property was not rendered a total loss by a
covered peril (fire) but was rather partially destroyed by a
non-covered peril (flood). Defendant points to Fifth Circuit
decisions and various Eastern and Western District cases.
Plaintiffs oppose, arguing that they prevail because of the
plain language of the statute and because there are questions
of material fact precluding summary judgment.
following reasons, the VPL Motion is granted.
Because Plaintiffs' property was damaged due to flooding
(a non-covered peril) and fire (a covered peril), there was
no “total loss” under the VPL, and Plaintiffs
cannot recover the total amount of their homeowner's
policy with AIC for the damages they sustained in the fire.
Relevant Factual Background
issued a homeowner's insurance policy, Policy Number
626401 (the “Policy”), for certain property owned
by Plaintiffs in Independence, Louisiana (the
“Property”). (Policy, Doc. 29-5.) The Policy
provides the following:
SECTION I - PERILS INSURED AGAINST
A. Coverage A - Dwellings and Coverage B - Other
1. We insure against risks of direct
physical loss to property described in Coverages
A and B.
2. We do not insure, however, for loss:
a. Excluded under Section I - Exclusions;
(Policy, Doc. 29-5 at 19.)
respect to the first, Coverage A (entitled
“Dwelling”) provides, “We cover: a. The
dwelling on the ‘residence premises' shown in the
Declarations, including structures attached to the
dwelling[.]” (Policy, Doc. 29-5 at 14.) Further, an
“occurrence” is defined in the Policy as
“an accident . . . which results, during the policy
period, in: . . . ‘Property damage[, ]' ”
which is defined as “physical injury to, destruction
of, or loss of use of tangible property.” (Policy, Doc.
29-5 at 13.)
respect to the second (Exclusions), the Policy provides:
SECTION I - EXCLUSIONS
A. We do not insure for loss caused directly or indirectly by
any of the following. Such loss is excluded regardless of any
other cause of event contributing concurrently or in any
sequence to the loss. These exclusions apply whether or not
the loss event results in widespread damage or affects a
substantial area. . . .
3. Water Damage
Water Damage means:
a. Flood, surface water, waves, tidal water,
overflow of a body of water, or spray from any of these,
whether or not driven by wind;
(Policy, Doc. 29-5 at 22-23.)
Policy also provides that AIC will “not be liable in
any one loss: . . . [f]or more than the applicable limit of
liability.” (Policy, Doc. 29-5 at 24.) The Policy
describes the following “Limits” and
“coverage for which premium was paid:”
Coverage A - Dwelling
$ 138, 500
Coverage B - Other Structures
$ 13, 850
Coverage C - Personal Property
$ 69, 250
Coverage D - Loss of Use
$ 27, 700
Coverage E - Liability
$ 100, 000
Coverage F - Medical Payments
$ 1, 000
(Policy, Doc. 29-5 at 2, 4.)
The Flood Insurance Policy
Occidental Fire & Casualty Company of North Carolina also
issued to Plaintiffs a flood insurance policy on the
Property. (Docs. 29-6; 29-7; Petition for Breach of
Contract, Breach of Duty of Good Faith and Fair Dealings and
For Penalties (“Petition”) ¶
6, Doc. 1-1 at 2.)
The Great Flood and the Fire
home was damaged in August 2016 by the Great Flood.
(Petition, ¶¶ 5, 8, Doc. 1-1 at 1-2.)
Barbara Nelson testified that, after the flood, she never
obtained “an estimate to repair the roof or interior
damage . . . [b]ecause [they] were going to wait and redo the
whole house . . . because [they] had flooded and
all[.]” (B. Nelson Dep. 39:16-22, Doc. 50-1 at 2.) The
areas that were damaged were in the living room and her
bedroom. (B. Nelson Dep. 39:23-40:4, Doc. 50-1 at 3.)
is conflicting evidence as to how much AIC paid Plaintiffs
for wind damage sustained during the Great Flood. AIC asserts
that it paid Plaintiffs $3, 361.63. (Marcia Riley Aff. ¶
21, Doc. 29-4 at 2; Letter, Doc. 29-21 at 1). Plaintiffs
respond that this figure is misleading, as AIC adjuster
Marcia Riley testified that Plaintiffs were really only paid
$438.74, which was the actual cash value less the deductible.
(Riley Dep. 41:10-20, Doc. 39-6 at 1.) Barbara Nelson
similarly testified that she received about $400, after
deductible and depreciation, for the wind damage. (B. Nelson
Dep. 40:5-14, Doc. 50-1 at 3.)
event, Occidental issued two checks in December 2016 for the
August 14, 2016, flood damage. (Occidental Checks, Doc.
29-7.) The checks were in the amounts of $61, 357.81 and $12,
290.58. (Occidental Checks, Doc. 29-7.) These flood payments
will be discussed in greater detail below.
alleged, “while [they] were attempting to obtain funds
from their flood insurer to begin repairing their home, their
home caught fire on October 20, 2016, due to an unknown
cause.” (Petition ¶ 8, Doc. 1-1 at 2.)
parties dispute the extent to which work was done on the
Property after the flood but before the fire. Specifically,
Barbara Nelson attests that, “on October 19, [her]
daughter, Tabatha Whitehead, had been to check on the
[P]roperty and perform clean-up work, and found it in good
condition, with the electricity working.” (B. Nelson
Aff ¶ 4, Doc. 39-8 at 1.) Whitehead similarly stated
that she checked on the Property on October 19, “which
was done routinely, and performed clean-up work. [She] found
the [P]roperty in good condition, with the electricity
working, and the upper floor habitable.” (Whitehead
Aff. ¶ 5, Doc. 39-9 at 1.) Riley similarly admitted that
Plaintiffs “went [to the Property] several times . . .
just to check on the [P]roperty's condition, make sure
that it was okay and to determine what they could do to begin
repairs according to their statements[.]” (Riley Dep.
143:12-19, Doc. 39-12 at 2.)
Defendant points to other evidence. Specifically, Barbara
Nelson testified at her deposition that, at the time of the
fire, there was no time frame for repairing the house, and no
one had spent the night at the house since the flood. (B.
Nelson Dep. 57:14-21, Doc. 30-5 at 2.) Barbara Nelson also
Q: And at this time when Tony Robinson is there, did
y'all start any kind of mitigation, any kind of mediation
to repair the flood stuff, meaning did you start pulling
items out, did you start tearing the walls down?
A: While he was there, no sir.
Q: It looks like he was there approximately September
7th, 2016; the fire occurs about somewhere October
Between that time, did y'all start any of the pulling
stuff out, pulling the walls down, anything like that?
A: We started pulling stuff out but not the walls down.
Q: Who was pulling some of the things out?
A: Me and Tiffany. . . .
Q: Y'all didn't hire anybody to do anything?
A: No, sir.
(B. Nelson Dep. 40:15-41:13, Doc. 50-1 at 3-4.) Additionally,
Mrs. Nelson said that no one spent the night at the Property
between the flood and the fire. (B. Nelson Dep. 43:17-20,
Doc. 50-1 at 6.) Mrs. Nelson also stated she would go to the
Property “every two or three weeks . . . to check on
everything.” (B. Nelson Dep. 43:21-44:4, Doc. 50-1 at
6-7.) At the time of the fire, it had been weeks since she
had gone to the Property. (B. Nelson Dep. 45:6-12, Doc. 50-1
at 8.) Sometimes Mrs. Nelson would go with her other daughter
Tabitha. (B. Nelson Dep. 58:13-24, Doc. 50-2 at 5.)
Whitehead testified that she and Mrs. Nelson went to the
Property maybe two or three times to check it. (T. Whitehead
Dep. 15:2-21, Doc. 50-3 at 2.) When they went, they tried to
clean out the contents, though they never moved furniture
out. (T. Whitehead Dep. 15:22-16:4, Doc. 50-3 at 2-3.)
Payments Made to Plaintiffs under the Policy for the Fire and
under the Occidental Policy for the Flood
11, 2017, AIC informed Plaintiffs of what payments they would
receive for the fire damage to the Property. (Letter, Doc.
29-21 at 1; Riley Aff. ¶ 21, Doc. 29-4 at 2.) The
payments were broken down as follows:
Less of Use
Flood Building Estimate Grand Total
($64, 051, 09)
Flood Debris Removal Total
Prior AIC Claim 10004472 Gross Claim Amount
$5, 135, 00