Articles Posted in Insurance Company Delays

Published on: | By

detour_confusion_sign_direction-scaled
Automobile insurance claims are complex enough, as it is unlikely that all parties involved will immediately agree on a settlement amount. These claims become even more convoluted when there are questions as to what state law should apply or when the insured isn’t fully aware of what his policy entails. Unfortunately, this is precisely what happened when a man was involved in an accident in New Orleans. 

Jones was involved in a motor vehicle accident in Orleans Parish, and the other driver, insured by Allstate, was found to be at fault. Jones settled with Allstate and then attempted to recover under his own uninsured/underinsured motorist claim from GEICO. GEICO denied his claim stating that Jones was in direct violation of his Georgia-issued policy and statutory law when he failed to obtain GEICO’s approval before settling with and releasing Allstate. 

Jones then brought a claim against GEICO, where he, in part, filed a motion for summary judgment seeking a judicial determination that Louisiana law applied, not Georgia’s. The Civil District Court of Orleans Parish granted Jones’ partial summary judgment claim and found that Louisiana law applied. GEICO then appealed the Trial Court’s ruling to the Louisiana Fourth Circuit Court of Appeal, where the issue focused on whether the Trial Court correctly granted Jones’ motion for partial summary judgment. 

Continue reading

Published on: | By

 

It is extremely important to review your home insurance policy to determine what types of damages the policy will actually cover, especially in areas prone to suffer from hurricane damages. Under Louisiana law, the insured individual is required to first prove that the insurance policy covers the cause of the claim. For example, if the policy only covers certain types of causes of damage, such as wind and hail, then the insured must prove that the damage was in fact caused by either wind or hail. Once the insured has done this, then the insurance company can argue that the incident is not covered by the policy. Therefore, it is extremely important that the insured take the time to determine the cause of the damage in order to prove that the policy covers their claim.

 

A case arising from Lake Charles, Louisiana illustrates this point. In this case, a homeowner suffered roof damage that they believed was caused by Hurricane Ike around September 13, 2008. Four shingles were missing and the insured claimed that this resulted in leakage in several rooms of the home. However, State Farm, the homeowner’s insurance company, determined that the leakage was not caused by Hurricane Ike and reclassified the claim as a “non-hurricane” claim.

 

State Farm, using several experts, determined that the leakage resulted from normal wear and tear on the roof, and therefore the homeowner’s insurance policy did not cover the leakage damage. Instead, State Farm concluded that only the four missing shingles were the result of wind and that they were the only damages that State Farm should reimburse to the insured; State Farm did not reimburse the insured for the damages caused by the leakage, but just the replacement value of the four damaged or missing shingles. The total damages that State Farm paid were under $500.00.

 

The insured had damages that were estimated at $9,385.00 by one expert and $204,717.78 by another expert. However, while these experts estimated what the cost of the leakage damage and repairing the roof would be, neither expert determined the actual cause of the damages. One of the insured’s experts thought that the wind had lifted the house’s flat roofing, which allowed water to enter the home. However, the expert could not explain why the nails on the flat roofing were still in place if the wind had lifted it. The State Farm expert, on the other hand, determined that the wind damage only included those four damaged or missing shingles and the leakage was actually caused by normal wear and tear. The State Farm expert concluded that there was “no evidence of roof damage that would be caused by severe weather . . . . The roofs, both asbestos shingle and built up roofs and all associated flashings are past their life cycle and are in need of replacement.”

 

The insured’s policy did not cover “poor workmanship; wear, tear, deterioration, or latent defect; settling, cracking, or expansion of walls, roofs, or ceilings; or leakage of water from air conditioning systems, household appliances, or plumbing.” Since the State Farm expert determined that the cause of the damage was from normal wear and tear, there was no way that the insured could satisfy the requirement to prove that the policy covered his claim. As such, the court granted State Farm summary judgment.

 

The court will grant summary judgment where one party cannot meet their required burden as a matter of law at trial. Summary judgment allows the court to avoid costly trials where there is one clear winner before the trial even begins. In this case, where the insured had no evidence that all of the damage he was claiming was caused by an occurrence included in the insurance policy, the court determined that summary judgment was appropriate. If the insured had employed experts that specifically testified as to the cause of the leakage damage, then the court may have allowed the case to proceed to trial. Further, the insured could have made a more diligent effort to report leakage as it occurred, which would help prevent the damage from spreading in the long run.

 

This case illustrates several very important points for the average homeowner. First, you should carefully read your policy so that you know what type of damage is covered. Second, if necessary, you may need to acquire experts that can explain what caused the damage to your home. Lastly, report damages immediately so that you can avoid costly repairs later on.  Continue reading

Published on: | By

Louisiana has a Direct Action Statute that allows injured third parties to sue an insurance company directly when the insurance company’s insured causes an injury. For example, if you are involved an automobile accident where you are not at fault, you can sue the at-fault driver’s insurance company directly instead of suing the at-fault driver themselves. The Direct Action Statute is beneficial because it gives injured third parties access to the entity that will actually pay compensation for the injuries. It can be especially helpful where the insured fails to file a claim with their insurance company themselves. However, the injured third-party’s ability to sue the insurance company directly is limited by the insurance contract between the insurance company and the insured.

Despite the fact that the insurance contract is between the insurance company and the insured, an injured third party must still comply with most of the terms of the contract. This overarching rule applies specifically to whether the policy covers the insured and whether the policy covers a particular event. The insurance company will ask: Did this person have coverage when this accident happened? and Does this policy cover this type of event? For example, in insurance contracts limited to specific times, the insurance company will not cover a claim that occurred outside the time frame of the contract, regardless of who brings the claim. In a related example, automobile coverage that is limited to only certain vehicles will cover only those vehicles, regardless of who brings the claim. That is, the injured third party can have no greater rights than the insured would have had if he or she brought the complain themselves.

In a United States Fifth Circuit Court of Appeals case, the court determined that specific requirements of the contract also extend to injured third parties. That case involved a “claims-made-and-reported” policy. That type of policy not only requires that a claim arise within the policy period, but also that the insured (or another party under the Direct Action Statute) had to have reported the claim within the policy period. This type of notice requirement helps insurance companies avoid claims that are reported years after they happen; instead, this policy requires notice within a certain amount of time.

Continue reading

Published on: | By

When you signed up for automobile insurance, you might have noticed that many states now require automobile insurance agencies to include some sort of uninsured motorist (“UM”) clause in your insurance agreement. Oftentimes, the only way to get out of including this in your coverage, and therefore having to pay a higher premium, is by explicitly rejecting this additional coverage. How exactly do you reject this additional coverage, though? While this might seem like an easy question, most states, including the state of Louisiana, require very specific requirements to be met in order for rejection of UM coverage to be proper.

In the State of Louisiana, that is exactly the case: In order to get out of paying a higher premium for this uninsured motorist coverage, the insured has to explicitly reject that coverage. And the state of Louisiana has many rules with regard to how to properly complete this task.

In order for an uninsured motorist rejection to be considered proper, Louisiana courts have found six tasks that must be completed by the insured. In Duncan v. U.S.A.A Ins. Co., 06-0363 (La. 11/29/06), 950 So. 2d 544, the court outlines these six tasks as follows:

1) initialing the selection or rejection of coverage chosen;
2) if limits lower than the policy limits are chosen (available in options 2 and 4), then filling in the amount of coverage selected for each person and each accident;
3) printing the name of the named insured or legal representative;
4) signing the name of the named insured or legal representative;
5) filling in the policy number; and
6) filling in the date.

While the Court in Duncan did not explicitly deal with the timing of these tasks, a couple years later, the Court in Gray v. American National Propery & Cas. Co., 07-1670 (La. 2/26/08), 977 So. 2d 839, discussed the requisite timing in which the above tasks need to be completed. According to the Court in Gray, all six of these tasks have to be completed before the UM selection form is signed by the insured. The Court also went on to say that the completion of these tasks has to be done in a manner showing that the insured’s signature signifies that he or she agrees with all of the information that is contained in the insurance form. While the Court said that the tasks have to be completed before the UM selection form is signed by the insured, that was not the most important part of the Court’s findings. Rather, the most important part of the Court’s holding was that the insured’s signature needs to signify agreement with all that is contained in the form.

In the recent case decided by the Louisiana Supreme Court, Edward Morrison v. U.S.A.A Casualty Ins. Co., No. 2012-CC-2334, the Court really focused on the fact that the most important part of the timing of the UM selection form is that the insured’s signature is affirming agreement to all the clauses contained therein. This case primarily deals with task #1 listed above which requires that an individual properly initial the selection or rejection of coverage chosen in order for UM rejection to be considered proper.

In this case, the insured’s representative clearly meant to reject UM coverage but accidentally did not initial the line that stated such in the agreement form. When the insurer received the form, he or she noticed that the form was incomplete and sent it back to the insured’s representative. At that time, the representative initialed the proper line rejecting UM coverage and returned the form to the insurer. This clearly showed that the insured agreed with all of the clauses and various information contained in the form. Furthermore, all of this was completed before the relevant accident, so the court held the UM rejection valid.

Continue reading

Published on: | By

In a previous blog post, we discussed how exactly uninsured/underinsured motorist (UM) benefits can be rejected in Louisiana. While that post went through some of the legal technicalities involved in rejecting UM coverage, it did not discuss in depth some of the scenarios in which coverage might be rejected and how the court might actually rule despite those legal technicalities.

This blog post will focus on specific cases and scenarios in which, despite not following every legally prescribed requirement under Louisiana law, the court has decided that coverage was actually properly rejected or limited. Some of these examples involve just a word or two out of place, others involve completely leaving off pertinent information. But all of the below examples make it clear that the parties’ intents are more important that perfectly following the letter of the law.

The first example deals with a case involving an automobile accident. In that case, the individual driving the car involved in the accident was driving one of his employer’s vehicles. So the question was whether or not the employer’s insurance company, General Insurance Company of America (GICA), had properly produced a valid and enforceable uninsured/underinsured motorist rejection form, as required by the commissioner of insurance. Whether or not this UM rejection form had been properly completed would mean the difference between $100,000.00 and $1,000,000.00 available under the policy. GICA contended that it had filled the form out properly and that coverage should be $100,000.00, and the individual driving the car claimed the opposite and that coverage should be in the amount of $1,000,000.00.

In that case, the plaintiff argued that the form did not fulfill all requirements as specified by Louisiana statute for proper uninsured/underinsured motorist rejection. Specifically, the form that was signed had an improper title. Despite the fact that the form did not have the exact proper title, the court decided that the form was still valid and enforceable, and therefore, UM rejection was properly executed. The governing factor in the case was whether or not GICA’s intent was clear from the UM rejection form. Because the intent was clear, despite the improper title, rejection was still proper.

Another example from the Louisiana court system involved a UM rejection form that not only had the title wrong, but also had several other deviations. Despite these errors, the uninsured/underinsured motorist rejection was still deemed proper because the form was clear about the limitation of the coverage. From the form, it was obvious that the party meant to limit UM motorist coverage.

Yet another case dealt with a form that was missing the insurance company name and policy number. Both of those pieces of information are technically required by law in order for the UM rejection to be valid. However, the court in that case ruled that such omissions will not invalidate an otherwise valid form when it is clear that the intent was to reject UM coverage. The technical errors had little weight on the court’s decision because the overall intent of the parties was clearly stated in the signed document.

In a Louisiana Supreme Court case, a form did not properly contain the printed name of the legal representative of the corporate insured. However, once again, despite this technical error, the Court determined that the uninsured/underinsured motorist rejection form would not be considered invalid because of that small error because the overall intent of the parties was clear from the form.

From these examples, it is clear that the courts will not always strictly apply the stated law and that sometimes the overall intent of the parties is more important and carries more weight in determining the validity of a UM rejection form.

Continue reading

Published on: | By

If you have ever been injured on the job or if you have ever known an employee who broke the law while on the job, you might know something about an employee-employer relationship and the legal obligations that come with such a relationship. Typically, if you are working for an employer and one of the two above-mentioned scenarios happens (in addition to several other possible scenarios), the employer can be held vicariously liable for the actions of the employee. Furthermore, the employer’s insurer might also be held liable if the accident or unlawful behavior happened while on the job.

A recent case that took place in the Parish of Lafayette helps illustrate some of the issues of the employee-employer relationship and when exactly an employer might be held liable for the actions of someone else. In this Lafayette case, a lady had been riding on the back of a motorcycle when the driver of her motorcycle suddenly collided with another motorcycle. At the time of the accident, the driver was pulling into the parking lot of a truck stop. As a result of the collision, the female rider suffered severe brain injuries and was permanently disabled.

In response to the serious injuries suffered by their daughter, the woman’s parents each sued several parties and insurers seeking recovery for the damages suffered by both their daughter and themselves individually. One of the parties was a business owner of the truck stop who the parents argued was the employer of one or both of the motorcycle operators involved in the collision. According to the parents’ lawsuits, under the employee-employer relationship, the truck stop owner was vicariously liable because the motorcycle operators were working for the owner of the truck stop at the time of the accident. Despite these allegations, the parents’ suits against the employer were dismissed when the employer filed a motion for summary judgment, which was granted.

On appeal, the parents argued that the motion for summary judgment should not have been granted for several different reasons, one of them being that there was an issue of fact as to whether or not the two motorcycle operators were employees of the truck stop owner. In response to their appeal, the court shed light on some of the important considerations that must be made when analyzing an employee-employer relationship.

First, the court looked to another Louisiana case, Savoie v. Fireman’s Fund Ins. Co., 347 So.2d 188 (La. 1977), in order to determine if an employee-employer relationship exists. In determining the existence of such a relationship, one of the main issues that has to be analyzed is whether or not the employer exercises sufficient right of control and supervision over the employee.

Some of the factors that might result in a court determining that right of control does exist are selection and engagement of a a worker, whether or not the individual receives wages, the power of control the employer exercises over the worker, and whether or not the employer has the power to dismiss the individual.

Ultimately, the court found that neither motorcycle operator was an employee of the truck stop owner and that the motion for summary judgment was proper. Neither driver received wages from the truck stop owner, and even if one of the motorcycle operators had been delivering a part to the owner, as was alleged, that alone was not enough to make him an employee, especially in light of the fact that the owner and the operator had been friends for years.

Continue reading

Published on: | By

One area where lawyers must continue to improve is drafting contracts. It is imperative that lawyers learn the intricacies of legal writing and the different meanings words have in the legal community and their ordinary meaning. If a word or phrase in a company’s contract is ambiguous, it is susceptible to multiple interpretations and might result in litigation at some point. A common example of litigation like this involves insurance policies. Therefore, it’s important to draft clear and concise contracts in order to save the time, money, and effort associated with litigation.

Ambiguous contractual provisions are to be strictly construed against the insurer and in favor of coverage for the insured. Insurance coverage is meant to protect the insured, so the public policy reflects this favoring. However, this strict construction rule applies only if the ambiguous policy provision is susceptible to two or more reasonable interpretations. The key is that it must be reasonable, not just another interpretation. If the word or phrase is clear, then no further interpretation is necessary. The words and phrases used in insurance policies are to be construed using their plain, ordinary, and generally prevailing meaning unless the words have acquired a technical meaning.

This seems to be a clear explanation of how contract terms are to be interpreted, but even so, many cases arise with an insured claiming that a certain phrase is ambiguous and they should not be denied relief under their policy. For example, Herbert Farms, who conducts a rice farming operation in St. Landry Parish, Louisiana, claimed the phrase “rice drying house” in their policy was ambiguous and other reasonable interpretations of the phrase was possible. Herbert Farms filed a claim for losses under its policy when its rice was damaged while in storage, seeking coverage under a section that listed “grain tanks” as covered property. However, there is a clear and unambiguous exclusionary clause that states that property covered in certain sections, including the section listing grain tanks, is not covered. The two pertinent pieces of property not covered in Herbert Farms’ policy were the contents of a rice warehouse and rice drying houses.

Continue reading

Published on: | By

In the aftermath of Hurricanes Katrina and Rita, the Louisiana legislature set deadlines for the filing of claims for damages resulting from the hurricanes. These dates were September 1, 2007 for claims of damage resulting from Hurricane Katrina and October 1, 2007 for claims of damage resulting from Hurricane Rita. Any claims filed beyond these dates would be subject to the exception of prescription, meaning that any legal remedies stemming from such damages would be extinguished. Under certain circumstances, however, Louisiana law allows for the suspension of prescription. For members of an ongoing class action in Louisiana state court, the deadline to file individual claims based on the same damages is suspended.

The countdown for the valid filing of individual claims begins to run again when a class member elects to be excluded from the class action or is notified that he or she has been excluded from the action, or is notified that the action has been dismissed. Once the countdown starts to run again, it resumes with how much time was left before the commencement of the class action. For instance, if there were two months remaining to file an individual claim of damages at the time a class action was started, the countdown for a class member’s individual claim would resume with two months remaining upon the member’s exclusion or the dismissal of the class action. This would hold true no matter how much time had elapsed since the class action’s commencement. However, it is crucial to note that such suspension of prescription is only allowed for class actions in Louisiana state court.

In a recent Louisiana Supreme Court case, a couple in Harvey, LA filed an individual claim for property damages resulting from Hurricanes Katrina and Rita more than two years after the deadline set by the legislature. Because the couple were members of a recently dismissed class action in federal court seeking the same damages, they argued that the countdown for the filing of their individual claim had been suspended. The Louisiana Supreme Court ruled, however, that only class actions filed in Louisiana state court (rather than federal class actions, or class actions in another state’s court system) could suspend the deadline for filing claims under Louisiana law. This meant that the couple’s individual claim had long expired unless they could prove membership in a class action in Louisiana state court for the same damages during that period.

Continue reading

Published on: | By

Regardless of your level of legal training, we’re all guilty of ignoring the fine print but insurance coverage is often determined by the placement of an unnoticed word or punctuation mark in the language of the policy. Under Louisiana law, the insured bears the burden of proving that an incident falls within the terms of the policy. In contrast, an insurer seeking to avoid coverage through a motion for summary judgment bears the burden of proving that a provision or exclusion precludes coverage. Courts treat insurance policies like other contracts and therefore strive to interpret each term according to its true meaning. As straightforward as it sounds, a contract’s true meaning is always disputed even if on its face the language appears clear. This requires courts to hear creative arguments on the meaning of particular terms buried in the policy.

On June 8, 2010, in an unfortunate incident at the Library Lounge in Monroe, McKenzie A. Hudson (Mr. Hudson) was approached by an intoxicated patron and struck in the head. In December 2010, Mr. Hudson died from severe brain injuries allegedly suffered during the attack. Mr. Hudson’s mother filed a wrongful death/survival suit against several defendants including the entity that owned the bar as well as its principals. Several weeks later Ms. Hudson added First Financial Insurance Company (FFIC), insurer of the bar.

Recognizing the language of the bar’s insurance policy, Ms. Hudson admitted that her son’s assailant did not intend or expect her son’s death but instead it resulted when he lost consciousness, fell to the pavement, and fractured his skull. The particular provision at issue in the policy read that it did not provide coverage for assault, battery, or other physical altercation. The policy defined assault in part as “a willful attempt or threat to inflict injury upon another” and battery as “wrongful physical contact with a person without his or her consent that entails some injury or offensive touching.”

Ms. Hudson differentiated between the FFIC’s old policy language which was ambiguous as to “extraordinary” injuries and its current policy which included amendments intended to broaden and clarify exclusions. Ms. Hudson specifically pointed to the removal of an “or” between the assault and battery provisions which had the effect of causing the provisions to be read together. This eliminated coverage for all “intended” or “expected” injuries. Since her son was not intentionally killed or expected to die she argued coverage should be provided. In response, FFIC submitted numerous cases where similar assault and battery exclusions were upheld.

Like the trial court, the court of appeals granted summary judgment in favor of FFIC for several reasons. First, the court reviewed the cases submitted by the FFIC and concluded that the “overwhelming” majority of insurers were dismissed from suits arising from injury or death after an assault or battery. Furthermore, the court pointed to a similar case where it was determined that the presence of an “and” or “or” did not necessarily indicate that the provisions should or should not be read together. The court concluded that the provisions were clear in their language and that there was no question Mr. Hudson was the victim of battery. Therefore, the policy excluded insurance coverage for his death.

Although the courts demonstrate a reluctance to rule against the insurance companies in policy exclusion cases this does not mean a particular result is guaranteed. The terms of each insurance policy varies and requires careful review of its language before any legal action is taken.

Continue reading

Published on: | By

Defendant Robert Turnage was in an accident with Plaintiffs Heather and Nicholas Tate on Memorial Day 2011 on Louisiana Highway 28 East, in Pineville. Tate attempted to pull out of a McDonald’s parking lot when she was struck my Turnage’s vehicle. Tate filed a petition for damages and the trial court found Tate to be 10% liable and Turnage to be 90% liable, awarding general, special and property damages to Heather Tate, along with general and special damages to her son Nicholas. Turnage appealed this judgment.

Turnage brought up 4 issues in his appeal: 1. The Plaintiff was essentially free from fault and met the heightened burden of proof imposed upon left-turning motorists from private driveway; 2. The Plaintiff preempted the Defendant’s right-of-way, although the accident did not occur at an intersection; That Defendant was 90% at fault, although the Court found credible his testimony that he did not motion to the Plaintiff that the way was clear for her to cross the highway; 4. The Plaintiff was 10% at fault in causing the Accident.

The standard of review for the appellate court is based on precedent, or previous case law, that sets for the amount of deference that the appellate court has in ruling the trial court’s initial decision. The appellate court is bound by the precedent that states:

“a court of appeal may not set aside a trial court’s finding of fact in the absence of manifest error or unless it is clearly wrong…the court of appeal may not reverse even though convinced that had it been sitting as the trier of fact, it would have weighed the evidence differently.”

The appellate court in this case has a higher standard of review in that they cannot reverse the decision based on small differences they perceived in the facts that the trial court ruled on, but can only rule differently if the original fact finder ruled in error or the ruling is completely wrong.

Turnage testified that he left a “gap” while sitting at a red light outside of the McDonald’s that Tate was pulling out of. Tate claimed that Turnage waved her forward to make the left turn she was waiting to make out of the private parking lot, but Turnage denies this, which the trial court found to be irrelevant. Louisiana Revised Statute 32:104(A) requires that a turning vehicle must not enter the roadway “unless and until such movement can be made with reasonable safety” and that La.R.S. 32:124 requires that a motorist entering a highway from a private road or driveway “yield the right of way to all approaching vehicles so close as to constitute an immediate hazard.” Although Tate is held to this standard, as soon as Turnage left the gap for Tate to pull out he no longer was in favor and he needed to exercise with caution by looking both way, which he states he failed to do. The appellate court found no error in the trial court ruling and that the fact that Tate almost completed the left hand turn before being hit only makes it more evident that Turnage proceeded unlawfully.

The appellate court disagreed with Turnage’s arguments that Tate failed to meet the burden of extreme care, that the trial court relied on Tate’s testimony that Turnage signaled her to pull through, and that the trial court abused its discretion in saying that Turnage was 90% at fault. The appellate court affirmed the trial court’s ruling and all costs of appeal were assessed to Robert Turnage and Southern Casualty Insurance Co.

If you ever experience a similar situation or are involved in a car accident contact the Berniard Law Firm.

Continue reading

Contact Information
1140 St Charles Ave
New Orleans, LA 70130
Phone: (504) 521-6000Fax: (504) 617-6300

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Please do not include any confidential or sensitive information in a contact form, text message, or voicemail. The contact form sends information by non-encrypted email, which is not secure. Submitting a contact form, sending a text message, making a phone call, or leaving a voicemail does not create an attorney-client relationship.

Copyright © 2024, Berniard Law Firm
JUSTIA Law Firm Blog Design