WESTERN CONSOLIDATED PREMIUM PROPERTIES, INC. v. WESTCHESTER SURPLUS LINES INSURANCE COMPANY Civil Action No. 06-4845.
WESTERN CONSOLIDATED PREMIUM PROPERTIES, INC., 1500 LORENE, LLC, AND 2700 WHITNEY, LLC v. WESTCHESTER SURPLUS LINES INSURANCE COMPANY AND TRAVELERS PROPERTY CASUALTY COMPANY OF AMERICA, SECTION `K"(5).
United States District Court, E.D. Louisiana.
December 16, 2011.
ORDER AND OPINION
STANWOOD R. DUVAL, Jr., District Judge.
Before the Court is the "Motion for Summary Judgment" filed on behalf of defendant Travelers Property Casualty Company of America ("Travelers") (Doc. 147). Having reviewed the pleadings, memoranda, and relevant law, the Court, for the reasons assigned, GRANTS the motion.
Plaintiffs filed suit against Westchester Surplus Lines Insurance Company
After plaintiffs filed suit, the parties focused their efforts on settlement. Westchester tendered its policy limits in December 2006. Thereafter Travelers and plaintiffs began mediation that resulted in a settlement agreement resolving plaintiffs' claims against Travelers under the policy for "any claims for indemnity, damages, liability, and/or obligation whatsoever whether under contract, quasi-contract, common law bad faith, statutory theory, or otherwise." The settlement did not affect the plaintiffs' claims "for any wrongful claims handling which occurs after the date of this agreement" or under the "Business Interruption, Extra Expense and Rental Value/Rental Income" coverages. Additionally, with respect to the claims for "Business Interruption, Extra Expense and Rental Value/Rental Income" the settlement agreement provided:
Doc. 9-3, Exhibit A.
The parties proved unable to resolve the matter. In October 2011, the panel of appraisers rendered its findings awarding plaintiffs $2,863,455.00.
Summary Judgment Standard
Rule 56(a) of the Federal Rules of Civil Procedure provides that summary judgment should be granted "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." The party moving for summary judgment bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of the record "which it believes demonstrate the absence of a genuine issue of material fact." Stults v. Conoco,
RSR Corporation v. International Insurance Company, 612 F.3rd 851,857 (5
Law and Analysis
Plaintiffs offer no opposition to Travelers' motion for summary judgment on their breach of contract claim other than urging that defendant is not entitled to summary judgment on that claim "so long as there remains a dispute over the Appraisal award." Doc. 152-1, p. 6. Having denied plaintiffs' "Motion to Vacate the Appraisal Award," the Court concludes that there is no genuine issue of material fact remaining concerning plaintiffs' claim for breach of contract. Therefore, Travelers is entitled to summary judgment on the claim for breach of contract.
Travelers is also entitled to summary judgment on plaintiffs' claim for statutory penalties under Louisiana law. Plaintiffs oppose the motion asserting that they have not conducted discovery with respect to Travelers' claim handling practices or is claim decisions on their claim and should be allowed to conduct such discovery before the Court rules on the motion for summary judgment. Plaintiffs' contention is not persuasive.
Louisiana Rev. Stat. 22:1892 provides that an insured is entitled to statutory penalties if an insurer fails to pay a claim within thirty days of the insured providing satisfactory proof of loss and the insurer's failure to timely pay is arbitrary, capricious, or without probable cause. La. Rev. Stat. 22:1973 penalizes similar behavior. It permits an insured to recover consequential damages that result from an insurer's failure to pay a claim within sixty (60) days of receiving satisfactory proof of loss, if the delay in payment is "arbitrary, capricious, and without probable cause." La. Rev. Stat. 22:1973. Thus, to recover under either statute, the plaintiff must demonstrate that the insurer (1) received a satisfactory proof of loss; (2) that the insurer failed to pay within the designated time period, and (3) that the failure to pay was arbitrary, capricious or without probable cause. Boudreaux v. State Farm Mutual Automobile Insurance Company,
In the course of settling certain claims against Travelers on February 22, 2007, plaintiffs released their claims:
Doc. 142-2, p. 2 (emphasis added). After entering into that agreement, the parties continued to attempt to resolve this matter and ultimately, pursuant to the cited settlement agreement, submitted the matter to a panel of appraisers. However, prior to submitting the matter for the appraisal process, the Court resolved various insurance coverage issues which were presented to it in a motion by Travelers. After resolution of those coverage issues, the parties proceeded with the appraisal process. Nineteen (19) days after the appraisal panel issued the appraisal award, Travelers sent plaintiffs a check for the difference between the amount awarded plaintiff in the appraisal award and the prior payments made by Travelers on the business income/rental value/rental income claim.
Considering the varied and complex insurance coverage issues involved in this case which had to be resolved prior to submitting plaintiffs' claim to the appraisal, the Court finds that Travelers' failure to pay plaintiff's claim prior to the arbitration award was not "arbitrary, capricious or without probable cause" as a matter of law. Moreover, because Travelers paid plaintiffs the amount due under the appraisal award well within the statutory period mandated under La. Rev. Stat. 22:1892 and 22:1973, Travelers made timely payment of the claim, and it is therefore entitled to summary judgment. Accordingly, the Court grants Travelers' motion for summary judgment and dismisses plaintiffs claims for statutory penalties.
Based upon the appraisal award, the denial of plaintiffs' motion for new trial (Doc.160), the denial of plaintiffs' "Motion to Vacate the Appraisal Award" (Doc. 166), and the granting of this motion for summary judgment, the Court finds that all claims brought by plaintiffs in this matter have been either ruled upon or resolved. Now that Travelers has voluntarily dismissed its counterclaim (Doc. 167), there are no outstanding claims in this case. Therefore, the Court directs the parties to submit to the Court, not later than
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