JANE TRICHE MILAZZO, District Judge.
Before the Court is Defendant Southern Fidelity Insurance Company's ("SFIC") Motion for Summary Judgment (Doc. 35). For the following reasons, the Motion is
This insurance dispute arose after a tornado ripped through New Orleans East and damaged Plaintiff Leticia Wells's home. On February 7, 2017, Plaintiff reported a claim with SFIC, her homeowner's insurer, for the damage to her home caused by the tornado. The next day, SFIC sent an adjuster to Plaintiff's home. The adjuster advised SFIC that it should hire an engineer to inspect the damages and estimate the cost of repair. On February 16, 2017, the engineer hired by SFIC inspected Plaintiff's property. SFIC received reports from the engineer and the adjuster on March 9, 2017. The adjuster's report estimated the cost of repair to Plaintiff's home at $31,960.28. On March 13, 2017, SFIC paid Plaintiff the full amount of the adjuster's estimate.
Plaintiff then hired a contractor who estimated that it would cost more than $270,000 to repair her home. SFIC received notice of this contractor's estimate on May 24, 2017. Shortly thereafter, Plaintiff invoked the appraisal process provided for by her insurance policy ("the Policy") to resolve the dispute about the cost of repair.
On October 3, 2017, SFIC received the appraisal award that resulted from the appraisal process. About two weeks later, on October 18, 2017, SFIC paid Plaintiff $13,406.12—the difference between the appraisal award and the amount SFIC had already paid her minus the policy's $5,000 deductible.
On January 19, 2018, Plaintiff filed suit against SFIC in the Civil District Court for the Parish of Orleans.
On June 8, 2018, SFIC moved for summary judgment.
"The court 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."
In determining whether the movant is entitled to summary judgment, the Court views facts in the light most favorable to the non-movant and draws all reasonable inferences in his favor.
"In response to a properly supported motion for summary judgment, the nonmovant must identify specific evidence in the record and articulate the manner in which that evidence supports that party's claim, and such evidence must be sufficient to sustain a finding in favor of the nonmovant on all issues as to which the nonmovant would bear the burden of proof at trial."
The Court will first address Plaintiff's breach of contract claims before turning to her bad faith insurance claims.
"Under Louisiana law, `[a]n insurance policy is a contract between the parties and should be construed by using the general rules of interpretation of contracts set forth in the Louisiana Civil Code.'"
Plaintiff alleges that SFIC breached the Policy by failing to pay the full cost of repair necessary to fix her home after the tornado damaged it. SFIC responds that this Court's confirmation of the appraisal award that SFIC paid to Plaintiff for the damage to her home freed SFIC of any further obligations to pay her under the Policy.
The Policy's "Appraisal" provision provides:
Here, Plaintiff invoked the Policy's appraisal process to determine the amount of money SFIC owed her for damage to her property caused by the tornado. A valid appraisal award resulted from the process. In its Order and Reasons confirming the appraisal award, this Court stated: "The appraisal award sets the amount of loss payable to Leticia Wells for the claim that was the subject of the appraisal."
"Louisiana law authorizes the recovery of bad faith penalties from insurers who fail to pay legitimate claims under two nearly identical [statutes]."
"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."
In Long v. American Security Insurance Co., Louisiana's Fourth Circuit Court of Appeal stated that compliance "with a contracted and self-invoked appraisal process fails to provide evidence or factual proof of vexatious, arbitrary, [or] capricious [conduct] or conduct without probable cause."
Here, SFIC timely reimbursed Plaintiff the undisputed costs of repair at every stage of the claims process. Once the disputed costs were resolved—in this case, through an appraisal process—it timely paid the updated costs of repair. SFIC's failure to pay Plaintiff the amount of the appraisal award before the award was given does not constitute evidence of bad faith. Nor does any other evidence cited to by Plaintiff show that SFIC engaged in bad faith. No genuine dispute of material fact exists regarding whether SFIC engaged in bad faith. It did not. Therefore, it is entitled to summary judgment on those claims.
For the foregoing reasons, SFIC's Motion for Summary Judgment is