# Talluri v. AIG Property Casualty Company

> District Court, E.D. Louisiana · April 30, 2024

URL: https://www.frixlaw.com/law-library/cases/10190757

## Case

- **Court:** District Court, E.D. Louisiana
- **Decided:** April 30, 2024
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/10190757

## How later opinions describe it (automated extraction)

- explaining that, where a property is not a total loss, an insurance company’s adjusters presumably need time to complete their adjustments after inspecting

## Opinion text

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA

RAJA TALLURI ET AL. CIVIL ACTION

VERSUS No. 23-377

AIG PROPERTY CASUALTY SECTION I
COMPANY

ORDER & REASONS
Three motions are before the Court. First is a motion1 for summary judgment
filed by defendant AIG Property Casualty Company (“defendant”). Plaintiffs Raja
Talluri and Gayathri Talluri (“plaintiffs”) oppose2 this motion. Defendant filed a
reply.3 Second is plaintiffs’ motion4 for partial summary judgment. Defendant
opposes5 this motion, and plaintiffs filed a reply.6 Third is plaintiffs’ motion7 in limine
to exclude certain evidence at trial. Defendant also opposes8 this motion, and
plaintiffs filed a reply.9 For the reasons that follow, the Court grants in part and
denies in part defendant’s motion for summary judgment, denies plaintiffs’ motion
for summary judgment, and grants in part and defers in part plaintiffs’ motion in
limine.

1 R. Doc. No. 32.
2 R. Doc. No. 41.
3 R. Doc. No. 45.
4 R. Doc. No. 34.
5 R. Doc. No. 38.
6 R. Doc. No. 46.
7 R. Doc. No. 33.
8 R. Doc. No. 42.
9 R. Doc. No. 47.
I. BACKGROUND
This case involves an insurance dispute arising from Hurricane Ida damage to
plaintiffs’ property.10 Defendant issued an insurance policy covering the property

during the relevant period.11 On September 1, 2021, plaintiffs reported Hurricane Ida
damages to defendant.12 Defendant then retained Dennis White (“White”) of Alacrity
Solutions, LLC to inspect the property on its behalf.13 White inspected the property
on September 24, 2021.14 On September 26, 2021, White submitted a “First Report”
to defendant.15 The report details the damage to the property and includes multiple
photos.16 The report also states that “[a]t this time, an Engineer and Building

Consultant is needed for assistance with the handling of this claim.”17 Specifically,
the report asserts that “an engineer is needed to determine if the integrity of the
exterior wall has been compromised[.]”18
On September 27, 2021, plaintiffs’ counsel submitted an invoice for mitigation
expenses to tarp plaintiffs’ roof in the amount of $86,404 and made a demand for an
additional $2,251,861.19 to replace the roof based on a bid from Precision

10 R. Doc. No. 1, ¶¶ 6, 8.
11 R. Doc. No. 32-5, ¶ 1 (defendant’s statement of uncontested material facts); R. Doc.
No. 41-1, ¶ 1 (plaintiffs’ response to defendant’s statement of uncontested material
facts).
12 R. Doc. No. 32-5, ¶ 5; R. Doc. No. 41-1, ¶ 5.
13 R. Doc. No. 32-5, ¶ 7; R. Doc. No. 41-1, ¶ 7.
14 R. Doc. No. 32-5, ¶ 8; R. Doc. No. 41-1, ¶ 8.
15 R. Doc. No. 34-10.
16 See generally id.
17 Id. at 2.
18 Id.
Construction and Roofing (“Precision”).19 On September 30, 2021, the adjustment of
the claim was reassigned to Leif Eklund (“Eklund”), defendant’s employee because
the claim was too large for White.20 On October 1, 2021, Eklund sent a letter to

plaintiffs’ counsel.21 The letter “acknowledge[d] [plaintiffs’] demand for policy limits
as well as [plaintiffs’] Proof of Loss for the roof only of $2,338.273.19.”22 The letter
stated that defendant “reject[ed] both in their entirety” because defendant was still
in the process of investigating the claims and developing estimates.23 However, the
letter also stated that defendant accepted the emergency tarp costs of $86,404 and
explained that defendant would “be issuing a $20,000 advance for immediate

needs.”24 Also on October 1, 2021, defendant issued a $106,404 payment to
plaintiffs.25
Additionally, on the same day, H&A Consulting International (“H&A”)
received a request from Eklund “to perform an origin and cause investigation” of the
property.26 “The scope of the investigation was to determine the origin and cause of
the reported damage to the building, and whether the damage can be attributed to
the impact of Hurricane Ida.”27 On October 5, 2021, defendant conducted its second

19 R. Doc. No. 32-3, ¶ 7.
20 R. Doc. No. 32-5, ¶ 10; R. Doc. No. 41-1, ¶ 10.
21 R. Doc. No. 32-5, ¶ 11; R. Doc. No. 41-1, ¶ 11; see also R. Doc. No. 32-3, at 12–13.
22 R. Doc. No. 32-3, at 12.
23 Id.
24 Id.
25 R. Doc. No. 32-1, at 5; R. Doc. No. 41, at 5.
26 R. Doc. No. 32-3, at 21.
27 Id.
inspection of the property.28 Numerous individuals were present for this inspection,
including Richard Harb of H&A and Jeffrey Chimento of J.S. Held, LLC (“JS Held”).29
On October 13, 2021, Eklund sent plaintiffs’ counsel a reservation of rights letter

based on the inspection.30 The letter cited various policy exclusions and requested
certain information from plaintiffs.31
On October 18, 2021, H&A submitted a “Forensic Engineering Report” to
Eklund.32 This report concluded that much of the damage to the property was
consistent with damage caused by Hurricane Ida, but that some of it was not
consistent with damage caused by high winds.33 For example, the report explains that

“cracks in the terrace and driveway tile and separation of the stair rails on the east
side of the building are consistent with damage caused by differential foundation
movement due to soil consolidation below the foundation and vehicle wheel load.”34
On October 19, 2021, JS Held provided a $359,479.21 estimate for roof repairs,
mailbox repairs, and other costs including dumpsters, a temporary toilet, and a
temporary hand washing station.35 On October 26, 2021, through Eklund, defendant
issued a $309,479.21 payment based on this estimate minus the $50,000 deductible.36

28 Id. ¶ 9.
29 Id.; see also R. Doc. No. 32-1, at 5; R. Doc. No. 41, at 6.
30 R. Doc. No. 32-3, ¶ 11; see also id. at 15–19.
31 See generally id. at 15–19.
32 Id. at 20–39.
33 See generally id.
34 Id. at 27.
35 Id. at 40–46. Although plaintiffs dispute “when the estimate was received by [ ]
Eklund[,]” R. Doc. No. 41-1, ¶ 15, the date-stamp on the bottom of the document reads:
“10/19/2021.” See R. Doc. No. 32-3, at 40–46.
36 R. Doc. No. 32-3, ¶ 15.
Eklund rejected plaintiffs’ $2,338,273.19 roof demand “because the roof estimate
provided by [plaintiffs’] counsel was not for a like kind and quality repair.”37 Eklund
“provided the estimate received from JS Held for a roof repair using roof tiles

manufactured by the same manufacturer for the existing roof.”38 Eklund also
reiterated his request for the information he had requested from plaintiffs in his
October 13, 2021 letter but had not yet received.39
On November 11, 2021, Eklund received plaintiffs’ public adjuster estimate for
$6,713,922.27.40 Eklund responded via email the same day and, because Eklund had
not received the information he had requested in the October 13, 2021 letter from

plaintiffs, he again requested the information.41 Also on November 11, 2021,
plaintiffs’ counsel provided the requested information to Eklund via email.42
Additionally, plaintiffs’ counsel sent Eklund an engineering report from Patrick
Snowden of Structural Alliance.43 Eklund provided the public adjuster’s estimate to
JS Held and provided the engineering report to H&A.44
On November 29, 2021, Eklund received a report from H&A disputing the
engineering report.45 On December 1, 2021, Eklund received an updated estimate

from JS Held based on its review of the H&A causation report and the public

37 Id. at 50.
38 Id. ¶ 15; see also id. at 50–52.
39 Id. ¶ 15; see also id. at 50–52.
40 Id. ¶ 17; see also id. at 190–318.
41 R. Doc. No. 41-6, at 1–4.
42 Id. at 1.
43 R. Doc. No. 32-3, ¶ 17.
44 Id.
45 Id. ¶ 18; see also id. at 321–23.
adjuster’s estimate.46 Based on this estimate, defendant issued an additional
payment of $445,304.44 on December 6, 2021.47 Eklund also provided a detailed
explanation of the payment and defendant’s rejection of the public adjuster’s

estimate.48
Eklund sought contractor bids for an alternative roof replacement “[b]ecause
of an ongoing dispute as to what was a like kind and quality roof replacement.”49 On
December 8, 2021, Eklund received a $933,879.00 bid from Roofing Solutions, which
was significantly higher than previous bids.50 Eklund did not issue payment based
on this bid and did not provide a copy of this bid to plaintiffs.51 During his deposition,

Eklund testified that this was because Eklund “didn’t think it was a reasonable bid”
and “it didn’t make any sense to [him].”52
On December 9, 2021, Eklund sent the bids to JS Held.53 On December 20,
2021, Eklund received a revised estimate from JS Held based on the newly obtained
roof bids.54 Accordingly, on December 29, 2021, Eklund sent a supplemental payment
letter to plaintiffs’ counsel explaining the forthcoming supplemental payment.55 On
January 4, 2022, Eklund issued a $366,710.78 additional payment.56

46 Id. ¶ 19; see also id. at 324–85.
47 Id. ¶ 20; see also id. at 386–87.
48 Id.; see also id. at 388–401.
49 Id. ¶ 21.
50 R. Doc. No. 41-10; R. Doc. No. 46-7, at 18.
51 R. Doc. No. 46-7, at 21.
52 Id. at 20.
53 R. Doc. No. 32-3, ¶ 21.
54 Id. ¶ 22.
55 Id. ¶ 23.
56 Id. ¶ 24; id. at 463.
At this point, defendant had paid a total of $1,227,898.43 in undisputed
damages.57 On February 16, 2022, Eklund invoked appraisal based on the remaining
disputed damages of $5,436,023.84.58 On October 13, 2022, an umpire issued an

appraisal award in the amount of $16,126,268.59
On November 9, 2022, defendant issued a $10,449,185.30 supplemental
payment pursuant to the appraisal award.60 The only portions of the appraisal award
defendant did not pay were $1,288,378 for additional living expenses (“ALE”) and
$3,188,288 for guaranteed rebuilding cost (“GRC”) coverage.61 Eklund’s declaration
states that he “did not pay the ALE component because under the policy ALE is owed

only on an incurred basis, and [plaintiffs] had not provided any documentation of any
incurred ALE.”62 In his declaration, Eklund further explained that he “did not pay
the GRC amount because under the policy, it is not owed unless repair or rebuilding
starts, and [defendant was] not provided with any documentation that repair had
started.”63
Defendant’s counsel sent a letter to plaintiffs’ counsel explaining the payment
and defendant’s refusal to pay the ALE and GRC amounts on November 2, 2022.64

57 Id. ¶ 25.
58 Id. ¶ 26; id. at 464–66.
59 Id. ¶ 27; id. at 467.
60 Id. at 468–71. The Court notes that Eklund’s declaration states this payment was
in the amount of $10,371,703. See id. ¶ 28. However, the checks attached to Eklund’s
declaration indicate that defendant made two payments totaling $10,449,185.30 on
November 9, 2022.
61 Id. ¶ 28.
62 Id.
63 Id.
64 Id. ¶ 29; id. at 472–74.
With respect to the ALE amount, the letter stated: “To the extent [plaintiffs] incur[]
ALE in the future, [defendant] will pay such ALE as it is incurred and presented to
[defendant].”65 With respect to the GRC amount, the letter stated: “Please keep us

posted on the status of repairs so [defendant] can make any additional payment that
may be owed.”66
Plaintiffs filed the instant lawsuit on January 30, 2023.67 On July 5, 2023,
plaintiffs’ counsel sent an email “confirm[ing] that repairs to the roof [had]
commenced[.]”68 On July 28, 2023, defendant issued an additional payment of
$3,188,288.26 for the additional dwelling and other structures part of the award

covered by the GRC provision.69 According to Eklund, “the only portion of the
appraisal award not paid is the ALE component, as [Eklund] ha[s] not been provided
with any documentation that any ALE has been incurred[.]”70
Defendant and plaintiffs then filed cross-motions for summary judgment and
partial summary judgment. Defendant contends that the Court should grant
summary judgment in its favor and dismiss all of plaintiffs’ claims because it timely
issued each payment after receiving satisfactory proof of loss.71 Plaintiffs respond

that defendant’s payments were not timely.72 Further, plaintiffs argue that the

65 Id. at 473.
66 Id.
67 R. Doc. No. 1.
68 R. Doc. No. 32-3, at 475.
69 Id. at 8, ¶ 31; id. at 476.
70 Id. at 8, ¶ 33.
71 R. Doc. No. 32, 12–19.
72 R. Doc. No. 41, at 8 (arguing that the October 26, 2021 payment was untimely); id.
at 9–11 (arguing that the December 6, 2021 payment was untimely); id. at 11–15
question of whether defendant’s refusals to pay were “arbitrary, capricious, or
without probable cause” is a fact-intensive determination for the jury.73
In their motion for partial summary judgment, plaintiffs argue that they are

entitled to summary judgment because there is no genuine dispute that three of
defendant’s payments—the October 26, 2021 payment, the December 6, 2021
payment, and the January 4, 2022 payment—were untimely.74 Defendant responds
that the initial inspections did not constitute satisfactory proof of loss triggering the
relevant thirty- and sixty-day time periods.75 Rather, defendant asserts that it timely
issued all payments within thirty days of receiving satisfactory proof of loss, including

appropriately making timely supplemental payments based on new information once
it received that new information.76
Plaintiffs also filed a motion in limine seeking to exclude evidence of the cost
to build the property and the existence of loans relating to the same because such
evidence is irrelevant or, alternatively, because its probative value is substantially
outweighed by the danger of unfair prejudice, confusion of the issues, or misleading
the jury.77 While defendant does not oppose the motion with respect to the existence

of the loans, defendant contends that evidence of the cost to build the property is

(arguing that the January 4, 2022 payment was untimely); id. at 15–16 (arguing that
the November 9, 2022 payment was untimely); id. at 16 (arguing that the July 28,
2023 payment was untimely).
73 Id. at 18–20.
74 See generally R. Doc. No. 34-1.
75 R. Doc. No. 38, at 4–6.
76 Id. at 6.
77 R. Doc. No. 33.
relevant as it provides context for determining whether defendant’s decision not to
pay plaintiffs’ initial demand was arbitrary and capricious and that such evidence is
also relevant to questions surrounding “like kind and quality” materials.78

II. THE PARTIES’ CROSS-MOTIONS FOR SUMMARY JUDGMENT
a. Standards of Law
i. Summary Judgment
Summary judgment is proper when, after reviewing the materials in the
record, a court determines that there is no genuine dispute of material fact and the
movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). “[A] party

seeking summary judgment always 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.” Celotex
Corp. v. Catrett, 477 U.S. 317, 323 (1986). The party seeking summary judgment need
not produce evidence negating the existence of a material fact; it need only point out
the absence of evidence supporting the other party’s case. Id.; see also Fontenot v.
Upjohn Co., 780 F.2d 1190, 1195–96 (5th Cir. 1986) (“There is no sound reason why

conclusory allegations should suffice to require a trial when there is no evidence to
support them even if the movant lacks contrary evidence.”).
Once the party seeking summary judgment carries that burden, the
nonmoving party must come forward with specific facts showing that there is a
genuine dispute of material fact for trial. See Matsushita Elec. Indus. v. Zenith Radio

78 See generally R. Doc. No. 42.
Corp., 475 U.S. 574, 587 (1986). The showing of a genuine dispute is not satisfied by
creating “‘some metaphysical doubt as to the material facts,’ by ‘conclusory
allegations,’ by ‘unsubstantiated assertions,’ or by only a ‘scintilla’ of evidence.” Little

v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (citations omitted). Rather, a
genuine dispute of material fact exists when the “evidence is such that a reasonable
jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 248 (1986). If the nonmovant fails to meet its burden of showing a
genuine dispute for trial that could support a judgment in favor of the nonmovant,
summary judgment must be granted. See Little, 37 F.3d at 1075–76.

The party responding to the motion for summary judgment may not rest upon
the pleadings but must identify specific facts that establish a genuine dispute.
Anderson, 477 U.S. at 248. The nonmoving party’s evidence, however, “is to be
believed, and all justifiable inferences are to be drawn in [the nonmoving party’s]
favor.” Id. at 255.
ii. Louisiana’s Bad Faith Statutes
“In order to establish a cause of action for penalties and/or attorney fees and

costs under [La. R.S. 22:1892, formerly] La. R.S. 22:658, a claimant must show that
(1) an insurer has received satisfactory proof of loss, (2) the insurer failed to tender
payment within thirty days of receipt thereof, and (3) the insurer’s failure to pay is
arbitrary, capricious or without probable cause.” 2715 Marietta, LLC v. Axis Surplus
Ins. Co., No. 22-3292, 2023 WL 8773747, at *4 (E.D. La. Dec. 19, 2023) (Ashe, J.)
(quoting Guillory v. Lee, 16 So. 3d 1104, 1126 (La. 2009)) (alteration in original).
“Similarly, La. R.S. 22:1973 authorizes an award of penalties when an insurer’s
failure to pay a claim within [sixty] days after the receipt of a satisfactory proof of
loss is ‘arbitrary, capricious, or without probable cause.’” Id. (quoting La. R.S.

22:1973(B)(5)). “The prohibited conduct in each statute is virtually identical with the
primary difference being a [thirty]- or [sixty]-day period for payment of claims.” Id.
(citing Calogero v. Safeway Ins. Co., 753 So. 2d 170, 174 (La. 2000)).
“It is well settled that a ‘satisfactory proof of loss’ is only that which is
‘sufficient to fully apprise the insurer of the insured’s claims.’” La. Bag Co. v. Audubon
Indem. Co., 999 So. 2d 1104, 1119 (La. 2008) (quoting McDill v. Utica Mut. Ins. Co.,

475 So. 2d 1085, 1089 (La. 1985)). “Satisfactory proof of loss must include ‘the extent
of damages,’ and the plaintiff bears the ‘burden of proving the insurer received
satisfactory proof of loss as a predicate to a showing that the insurer was arbitrary,
capricious, or without probable cause.’” Korbel v. Lexington Ins. Co., 308 F. App’x 800,
803 (5th Cir. 2009) (quoting Reed v. State Farm Mut. Auto. Ins. Co., 857 So. 2d 1012,
1019 (La. 2003)).
“In addition, with regard to the form of a proof of loss, [the Louisiana Supreme

Court] has stated that proof of loss is a ‘flexible requirement to advise an insurer of
the facts of the claim,’ and that it need not ‘be in any formal style.’” La. Bag Co., 99
So. 2d at 1119 (quoting Sevier v. U.S. Fid. & Guar. Co., 497 So. 3d 1380, 1384 (La.
1986)). “As long as the insurer receives sufficient information to act on the claim, the
manner in which it obtains the information is immaterial.” Id. (cleaned up).
“The phrase ‘arbitrary, capricious, or without probable cause’ is synonymous
with ‘vexatious,’ and a ‘vexatious refusal to pay’ means ‘unjustified, without
reasonable or probable cause or excuse.’” La. Bag Co., 999 So. 2d at 1114 (quoting

Reed, 857 So. 2d at 1021). “[A]n insurer must pay any undisputed amount over which
reasonable minds could not differ.” Marietta, 2023 WL 8773747, at *4 (quoting Dupree
v. Lafayette Ins. Co., 51 So. 3d 673, 698 (La. 2010)). “[W]hen there is a ‘reasonable
and legitimate question to the extent and causation of a claim, bad faith should not
be inferred from an insurer’s failure to pay within the statutory time limits when
such reasonable doubts exist.’” Id. (quoting La. Bag, 999 So. 3d at 114 and Reed, 857

So. 2d at 1021).
b. Plaintiffs’ ALE Claims
In its motion for summary judgment, defendant first argues that the Court
should dismiss any of plaintiffs’ claims related to ALE because the policy provides
coverage for ALE only on an incurred basis and plaintiffs have not incurred any
ALE.79 Defendant argues both that the Court should dismiss plaintiff’s claims to
recover allegedly outstanding ALE under the policy and that the Court should

dismiss plaintiffs’ bad faith claims related to alleged earlier failures to pay owed
ALE.80
Plaintiffs admit that they have not yet incurred ALE “for temporary housing
for the restoration period.”81 However, plaintiffs contend that they incurred ALE “as

79 R. Doc. No. 32-1, at 11.
80 Id.
81 R. Doc. No. 41, at 16.
it relates to [p]laintiffs’ cost of generators, totaling $64,568.25.”82 Plaintiffs state that
they submitted proof of “incurred ALE for generators” to defendant on November 11,
2021.83 Specifically, in their reply brief in support of their own motion for partial

summary judgment, plaintiffs assert that they submitted invoices for generators,
gate motors, tracks, mounting hardwire, electrical, push arms, keypads, and tennis
court lights.84 Plaintiffs argue that these items qualify as ALE because they were
necessary to make the house livable and safe.85 Plaintiffs also suggest that
defendant’s $20,000 payment, issued on October 1, 2022 as an “advance for
immediate needs,” was for ALE, though defendant claims this “advance” constituted

“unallocated” funds.86 Additionally, defendant “released unconditional tenders
related to [ALE] in its November 9, 2022[] partial payment of the appraisal award.”87
While plaintiffs contend that this payment was untimely and should be subject to bad
faith penalties, they do not appear to contend that defendant actually owes any
presently outstanding ALE.88
In reply, defendant argues that Eklund legitimately disputed that the
generator costs were covered by the policy.89 Defendant also submits a supplemental

declaration in which Eklund asserts that he rejected invoices submitted for the costs

82 Id.
83 Id. at 17.
84 R. Doc. No. 46, at 6.
85 Id.
86 R. Doc. No. 41, at 16.
87 Id.
88 See id. at 16–17.
89 R. Doc. No. 45, at 3.
of generators because “these costs represented an improvement” since plaintiffs did
not have a generator before the storm.90 Nevertheless, “these disputed amounts were
included as part of the appraisal award, and paid in the November 9, 2022

payment.”91
Pursuant to the policy, defendant agreed to “cover any reasonable increase in
living expenses incurred by [plaintiffs] to maintain [plaintiffs’] household’s usual
standard of living” if a “covered loss” made plaintiffs’ residence “uninhabitable.”92 As
defendant points out, ALE are only owed on an incurred basis.93 As noted, plaintiffs
agree that they have not yet incurred ALE for temporary housing during the

restoration period.94 Further, plaintiffs do not appear to dispute that defendant paid
for the generators and other items in the November 9, 2022 payment following the
appraisal award.95 Accordingly, the Court finds no basis for plaintiffs to recover
additional ALE pursuant to the policy. To the extent that plaintiffs’ complaint asserts
any claims seeking additional ALE, such claims will be dismissed.

90 R. Doc. No. 45-1, ¶ 1.
91 Id. The Court notes that the appraisal award submitted to the Court as an exhibit
does not explain the umpire’s reasoning with respect to the generators and other
items. See R. Doc. No. 32-3, at 467.
92 R. Doc. No. 32-4, at 9.
93 R. Doc. No. 32-1, at 11; see also R. Doc. No. 32-4, at 9.
94 R. Doc. No. 41, at 16 (“As it relates to funds for temporary housing for the
restoration period[,] [d]efendant is correct in that funds for temporary housing for the
restoration period have not yet been incurred, as specific repairs which would prohibit
the same have not yet occurred.”).
95 See id. at 17 (arguing that defendant’s ALE payment “was not paid [ ] until after
the appraisal award was issued on November 9, 2022”).
However, plaintiffs’ bad faith claims with respect to ALE raise a different
question. As explained, defendant initially refused to pay for generators based on
Eklund’s finding that the generators represented “improvement[s] or upgrade[s]” and

that the policy therefore did not cover them.96 There is no indication that defendant
cited any policy provision when it refused to issue this payment, nor is there any
indication that defendant suggested a less costly reasonable alternative to maintain
plaintiffs’ usual standard of living at that time.
Deciding whether plaintiffs are entitled to bad faith damages with respect to
the eventual ALE payment requires determining whether Eklund’s explanation for

denying plaintiffs’ claim based on the November 11, 2021 invoices was arbitrary,
capricious, or without probable cause. See Marietta, 2023 WL 8773747, at *4.
Defendant’s motion and exhibits do not establish that Eklund’s determination
regarding the policy’s coverage of the generators was reasonably based on his
interpretation of the policy such that there is no genuine dispute of material fact as
to whether his refusal to pay for the generators was “vexatious.” To be clear, the Court
is not holding that the purchase of a generator qualifies as ALE broadly. Rather, the

Court finds that—under the specific circumstances of this case and based on the scant
ALE-related evidence submitted in support of defendant’s motion—the jury must
decide whether defendant legitimately disputed the generators and other expenses

96 R. Doc. No. 45-1, ¶ 1. Eklund references no portion of the policy stating that
defendant will not cover improvements or upgrades as part of an ALE payment.
as reasonable ALE or whether defendant’s conduct was “vexatious.” Accordingly, the
Court will deny defendant’s motion for summary judgment on this issue.
c. Plaintiffs’ Remaining Bad Faith Claims

Both defendant’s motion for summary judgment and plaintiffs’ motion for
partial summary judgment address the question of bad faith with respect to certain
payments. Defendant argues that it is entitled to summary judgment dismissing
plaintiffs’ claims pursuant to Louisiana’s bad faith statutes because all of its
payments were timely.97 Plaintiffs contend that they are entitled to partial summary
judgment on the issue of bad faith with respect to three specific payments which they

argue were untimely.98 Ultimately, the Court concludes neither party is entitled to
summary judgment as to the timeliness of the October 26, 2021 payment, the
December 6, 2021 payment, the January 4, 2022 payment, and a portion of the
November 9, 2022 payment. However, defendant is entitled to summary judgment as
to the timeliness of the October 1, 2021 payment, the remaining portion of the
November 9, 2022 payment, and the July 28, 2023 payment.
i. October 1, 2021 Payment

On October 1, 2021, defendant issued a $106,404 payment to plaintiffs for
shrink-wrapping the roof and for “immediate needs.”99 Plaintiffs do not appear to
dispute that this payment—which was issued four days after plaintiffs submitted an
invoice for the roof tarp and seven days after White’s initial inspection—was

97 R. Doc. No. 32-1, at 12–19.
98 R. Doc. No. 34-1, at 15.
99 R. Doc. No. 32-1, at 5; R. Doc. No. 41, at 5; R. Doc. No. 32-3, at 12.
timely.100 Accordingly, the Court finds that there is no genuine dispute of material
fact as to the timeliness of this payment and defendant is entitled to summary
judgment on the question of bad faith with respect to this payment.

ii. October 26, 2021 Payment
On October 26, 2021, defendant issued a $309,479.21 payment to plaintiffs.101
This payment pertained to the roof and mailbox.102 According to plaintiffs, this
payment was untimely as a matter of law because defendant received satisfactory
proof of loss on September 24, 2021 when White inspected the property.103 White’s
September 26, 2021 report stated that an engineer was needed “to determine if the

integrity of the exterior wall [had] been compromised[.]”104 Plaintiffs emphasize that
White did not recommend or request an engineer as it relates to interior damage or
other structure damage.105 Further, plaintiffs state that White “testified that he did
not observe pre-existing damage during his inspection and payment was ready to be
tendered on all the damage he documented with the exception of the exterior wall as
that required an engineer.”106 Plaintiffs therefore assert that defendant was obligated

100 See R. Doc. No. 41, at 5 (discussing this payment without asserting that it was
untimely).
101 R. Doc. No. 32-3, ¶ 15; R. Doc. No. 34-7.
102 R. Doc. No. 32-3, ¶ 15; R. Doc. No. 34-8 (transcript of Heath Blumberg’s deposition),
at 75.
103 R. Doc. No. 41, at 8.
104 R. Doc. No. 34-10, at 2.
105 R. Doc. No. 41, at 8.
106 R. Doc. No. 34-1, at 5–6. Plaintiffs state that White’s deposition transcript was not
completed at the time they filed their motion for partial summary judgment. Id. at 6
n.10.
to issue the payment for the roof and mailbox within thirty days of White’s September
24, 2021 inspection.107
According to defendant, the October 26, 2021 payment was timely as a matter

of law because defendant did not receive satisfactory proof of loss until it received the
JS Held estimates for the roof and building damage on October 19, 2021.108 Defendant
issued payment based on the JS Held estimate for the roof seven days after this
estimate was received.109
Although an adjuster’s inspection of the property may sometimes constitute
satisfactory proof of loss pursuant to Louisiana law, “this . . . does not mean that an

insurer always receives satisfactory proof of loss as a result of its initial inspection of
a damaged property.” Bainbridge, LLC v. Western World Ins. Co., No. 22-3296, 2023
WL 4528481, at *2 (E.D. La. July 13, 2023) (Milazzo, J.) (emphasis in original).
Whether defendant received satisfactory proof of loss as to the roof or mailbox on the
date of White’s initial inspection is a question of fact. See id.
Plaintiffs cite no caselaw suggesting summary judgment in their favor is
appropriate as to the alleged untimeliness of the October 26 payment, as the cases

plaintiffs do cite are distinguishable.110 Specifically, in J.R.A. Inc. v. Essex Insurance
Company, a case involving a total loss following Hurricane Katrina, the court merely
noted that an inspection may constitute satisfactory proof of loss and determined that

107 Id. at 4–6.
108 R. Doc. No. 38, at 6–7.
109 R. Doc. No. 32-3, ¶ 15; R. Doc. No. 34-7.
110 See R. Doc. No. 34-1, at 13, n.43.
the district court’s factual finding that the original inspection constituted satisfactory
proof of loss was neither “manifestly erroneous” nor “clearly wrong.” 72 So. 3d 862,
881 (La. App. 4th Cir. 2011). In Guillory v. Louisiana Farm Bureau Casualty

Insurance Company, the court similarly held that a jury’s conclusion that an insurer’s
original inspection qualified as satisfactory proof of loss was not manifestly erroneous
in light of the specific facts of that case. 371 So. 3d 1202, 1211 (La. App. 3d Cir. 2023).
In this case, a reasonable jury could certainly find that the initial inspection
did not constitute satisfactory proof of loss because White was not qualified to provide
an estimate111 or because defendant’s guidelines recommend “consider[ing] hiring a

building consultant to prepare an estimate” for damages exceeding $200,000.112
Further, a reasonable jury may find that defendant acted reasonably in promptly
scheduling a second inspection with a qualified adjuster, a building consultant, and
an engineer pursuant to its guidelines. See Korbel, 308 F. App’x at 804 (explaining
that, where a property is not a total loss, an insurance company’s adjusters
presumably need time to complete their adjustments after inspecting). Indeed,
particularly since defendant was obligated to issue payment for “like kind and quality

materials,” a reasonable jury may even determine that defendant did not receive
satisfactory proof of loss with respect to the October 26, 2021 payment until October
19, 2021, when it received the JS Held roof estimate. In that case, defendant’s October

111 R. Doc. No. 38-3; R. Doc. No. 38-4; R. Doc. No. 38, at 4–5.
112 R. Doc. No. 38-4, at 2. The Court notes that defendant’s corporate representative
testified that defendant learned that the claim would exceed $200,000 through
plaintiffs’ September 27, 2021 roof demand which exceeded $2 million. See id. at 3.
26, 2021 payment would have been timely, foreclosing bad faith damages.
Accordingly, summary judgment for plaintiff with respect to this payment is
inappropriate.

At the same time, summary judgment for defendant on this issue is also
inappropriate. A reasonable jury could find that White’s “First Report” constituted
satisfactory proof of loss because it communicated to defendant “actual knowledge of
the facts.” Bainbridge, 2023 WL 4528481, at *2. As noted, White’s “First Report”
detailed damage to the property and stated that an engineer was needed only to
assess the integrity exterior wall. Further, according to plaintiffs, White “testified [in

his deposition] that payment was ready to be tendered on all the damage he
documented with the exception of the exterior wall[.]”113 Defendant cites no caselaw
suggesting that, as a matter of law, information learned during an initial inspection
by an adjuster does not qualify as “satisfactory proof of loss.”114 Although the question

113 R. Doc. No. 34-1, at 5–6.
114 The cases defendant relies on are not to the contrary. The Marietta court simply
held that bad faith damages were unavailable as a matter of law where the insurance
company’s denial of an insured’s claim was based on a legitimate dispute among
experts as to the cause of the loss. 2023 WL 8773747, at *5. In that case, the insurance
company “expeditiously sent an adjuster to inspect the property, and on the adjuster’s
recommendation, hired an engineer to provide a second opinion” before denying a
claim based on the experts’ findings and the policy exclusions. Id. Similarly, Treigle
stands for the proposition that, where there is a legitimate dispute as to whether
damages were caused by a covered loss, an insurance company does not act arbitrarily
or capriciously in denying a claim. 2023 WL 3569828, at *5. By contrast, in the instant
case, White—the insurance company’s initial adjuster—detailed various damages to
the property and asserted that they were caused by Hurricane Ida, recommended
hiring an engineer only with respect to an exterior wall, later testified that further
experts and inspections were unnecessary, and also testified that payment was ready
to be tendered on all the damage he documented except the exterior wall.
is close, the Court finds that these facts are sufficient to create a genuine dispute as
to whether the original inspection constituted satisfactory proof of loss. Accordingly,
the Court will deny both plaintiffs’ and defendant’s motions for summary judgment

as to this payment.
iii. December 6, 2021 Payment
On December 6, 2021, defendant issued a $445,304.44 payment to plaintiffs.115
This payment was the first payment pertaining to interior damages.116 Defendant
contends that this payment was based on an updated estimate from JS Held, which
Eklund received on December 1, 2021.117 JS Held’s December 1 updated estimate was

based on JS Held’s review of the October 18, 2021 H&A causation report and
plaintiffs’ public adjuster estimate.118 Plaintiffs sent their public adjuster estimate to
Eklund on November 11, 2021.119
Plaintiffs contend that they are entitled to summary judgment on the question
of bad faith with respect to this payment because it was untimely as a matter of
law.120 According to plaintiffs, defendant received satisfactory proof of loss as to
interior damages as early as the September 24, 2021 inspection.121 However, as the

Court explained with respect to the roof, there is a genuine dispute of material fact
regarding whether this initial inspection constituted satisfactory proof of loss.

115 R. Doc. No. 32-3, ¶ 20; see also id. at 386–87.
116 R. Doc. No. 34-1, at 8.
117 R. Doc. No. 32-3, ¶ 19.
118 See id. ¶¶ 19, 12.
119 Id. ¶ 17.
120 R. Doc. No. 34-1, at 6–8.
121 R. Doc. No. 41, at 10–11.
Plaintiffs also suggest that defendant received various other satisfactory proofs
of loss as a matter of law. First, plaintiffs assert that the October 5, 2021 inspection
constituted satisfactory proof of loss.122 However, as with the September 24, 2021

inspection, the Court finds there is a genuine dispute as to whether this inspection
fully apprised defendant of the extent of the damages, particularly in light of
defendant’s obligation to identify “like kind and quality” materials.
Next, plaintiffs assert that the receipt of the engineering and protocol reports
on October 18, 2021 and October 19, 2021 constituted satisfactory proof of loss.123
Accordingly, plaintiffs suggest that they have established bad faith as a matter of law

through the forty-three day delay between defendant’s receipt of its engineering
report and its December 1, 2021 estimate.124 However, the Court finds that whether
such a delay in generating expert reports qualifies as bad faith is a question for the
jury, particularly since—as defendant points out—it took plaintiffs’ appraisal team
more than 150 days to conduct its own investigation and issue its final valuation
estimate.125 The jury must decide whether the parties were engaged in a legitimate
dispute regarding the causation or extent of the damages. If so, plaintiffs are not

entitled to bad faith damages as to this payment. See Marietta, 2023 WL 8773747, at
*5 (explaining that an insurance company is not obligated to make a payment where

122 See id. at 9–11.
123 Id. at 10–11.
124 Id. at 10.
125 See R. Doc. No. 45, at 2–3.
there is a legitimate dispute among experts as to that payment); Treigle, 2023 WL
3569828, at *5 (same).
Likewise, the Court finds that defendant has failed to satisfy its burden of

proving that the December 6, 2021 payment was timely based on the updated
estimate. As previously explained, there is a genuine factual dispute with respect to
when defendant received satisfactory proof of loss as to the interior damages included
in this payment. Accordingly, the Court will deny both motions for summary
judgment on the question of bad faith with respect to this payment.
iv. January 4, 2022 Payment

On January 4, 2022, defendant issued a supplemental payment of $366,710.78
pertaining to the roof.126 Plaintiffs and defendant each assert that they are entitled
to summary judgment on the timeliness of this payment.127 The Court has already
explained that there is a genuine dispute of material fact regarding whether White’s
September 24, 2021 inspection constituted satisfactory proof of loss as to the roof or
whether there was a legitimate dispute regarding what constituted a “like kind and
quality” replacement roof. The timeliness of this supplemental roof payment is

therefore also a question for the jury. Accordingly, the Court will deny both parties’
motions for summary judgment with respect to this payment.
v. November 9, 2022 Payment

126 R. Doc. No. 32-3, ¶ 24; id. at 463.
127 R. Doc. No. 32-1, at 7; R. Doc. No. 34-1, at 8–9.
On November 9, 2022, twenty-seven days after the umpire issued the appraisal
award, defendant issued a $10,449,185.30 payment to plaintiffs.128 Defendant asserts
that it is entitled to summary judgment on the timeliness of this payment.129

Defendant emphasizes that, once it invoked the appraisal process, “all claimed
amounts [were] legitimately in dispute until after the appraisal award [was]
rendered.”130 While plaintiffs do not argue that they are entitled to summary
judgment on the untimeliness of this payment,131 plaintiffs nevertheless contend that
the payment was untimely as it relates to the difference between defendant’s final JS
Held estimate totaling $1,188,462.81 and plaintiffs’ public adjuster estimate totaling

$6,713,922.27.132 However, plaintiffs do not argue that the payment was untimely as
it relates to the difference between plaintiffs’ public adjuster estimate and the
ultimately higher appraisal award.
The Court has already determined that, on the specific facts of this case—
namely, that defendant’s initial report stated that an expert opinion was needed only
as to an exterior wall—the question of when defendant received satisfactory proof of
loss is a question for the jury. A reasonable jury may find that defendant received

satisfactory proof of loss when it conducted the initial inspection or when it received
plaintiffs’ public adjuster estimate. If that is so, the jury could find that defendant

128 R. Doc. No. 32-3, at 468–71.
129 R. Doc. No. 32-1, at 7–9, 18–19.
130 Id. at 18.
131 See R. Doc. No. 34-1, at 15 (arguing that plaintiffs are entitled to summary
judgment on the issue of bad faith with respect to three payments, not including the
November 9, 2022 payment).
132 R. Doc. No. 41, at 15–16.
acted arbitrarily and capriciously by failing to issue the portion of the November 9,
2022 payment pertaining to the difference between the JS Held estimate and the
public adjuster estimate earlier or by failing to invoke appraisal until February 2022.

See, e.g., Nguyen v. St. Paul Travelers Ins. Co., No. 06-4130, 2007 WL 1672504, at *4
(E.D. La. June 6, 2007) (Vance, J.) (explaining that insurer’s invocation of appraisal
four months after receiving satisfactory proof of loss was untimely).
On the other hand, a reasonable jury could find that defendant did not receive
satisfactory proof of loss through the initial inspection or the public adjuster’s
estimate since there was a legitimate dispute between plaintiffs’ experts and

defendant’s experts as to the extent of the damages and the appropriate payment.
Accordingly, summary judgment for defendant on this question is inappropriate at
this point.
vi. July 28, 2023 Payment
The final payment at issue for purposes of the instant motions is the
$3,188,288.26 payment for GRC issued on July 28, 2023.133 Defendant contends that
it is entitled to summary judgment on the question of the timeliness of this

payment.134 According to defendant, this payment was timely because the policy
provides that GRC is not owed unless repair or rebuilding starts, and plaintiffs did
not provide defendant with documentation that roof repairs had started until July 5,
2023.135 Although plaintiffs do not suggest that they are entitled to summary

133 R. Doc. No. 32-3, at 8, ¶ 31; id. at 476.
134 R. Doc. No. 32-1, at 8–9.
135 See R. Doc. No. 32-3, at 8, ¶ 28; R. Doc. No. 32-1, at 8–9.
judgment on the untimeliness of this payment,136 plaintiffs do argue that this
payment was untimely.137 According to plaintiffs, they provided defendant with
documentation that roof repairs had started when they submitted the invoice for the

roof wrap on September 27, 2021.138 In reply, defendant asserts that the roof wrap
was a mitigation cost and that such mitigation costs do not constitute the
commencement of repairs pursuant to the policy language.139
The Court finds that defendant is entitled to summary judgment as to the
timeliness of this payment. As defendant observes, the policy provides that defendant
“will pay Guaranteed Rebuilding Cost” and states that this “means that for a covered

loss [defendant] will pay the reconstruction cost of [plaintiffs’] house or other
permanent structures[.]”140 There is no indication that the roof wrap constituted a
reconstruction cost. To the contrary, the appraisal estimate upon which the appraisal
award was based attributed the roofing tarp invoice as “Mitigation[.]”141 Further, on
July 5, 2023, plaintiffs’ counsel sent an email stating: “This email will confirm that
repairs to the roof have commenced in the above referenced claim.”142 Indeed, the
subject line of that email is “Notice That Roof Repairs Have Commenced[.]”143

136 See R. Doc. No. 34-1, at 15 (arguing that plaintiffs are entitled to summary
judgment on the issue of bad faith with respect to three payments, not including the
July 28, 2023 payment).
137 R. Doc. No. 41, at 16.
138 Id.
139 R. Doc. No. 45, at 3–4.
140 R. Doc. No. 32-4, at 7.
141 R. Doc. No. 45-2, at 1.
142 R. Doc. No. 32-3, at 475.
143 Id.
Accordingly, the Court finds that there is no genuine dispute of material fact
as to when defendant received satisfactory proof of loss with respect to the
commencement of repair or rebuilding the roof. The evidence clearly indicates that

plaintiffs advised defendant that repairs had started on July 5, 2023, and defendant
timely issued payment less than thirty days later. The Court will therefore grant
defendant’s motion for summary judgment as to the July 28, 2023 payment.
IV. PLAINTIFFS’ MOTION IN LIMINE
As noted, plaintiffs also filed a motion in limine to exclude evidence of the cost
to build the property and the existence of loans relating to the same.144 Specifically,

plaintiffs contend that this evidence is irrelevant pursuant to Federal Rule of
Evidence 401 because the cost to build the property ten years ago has no bearing on
defendant’s obligation to pay Hurricane Ida damages, the cost of repair or
replacement damages today, or the facts surrounding whether defendant timely and
adequately paid on plaintiffs’ claim.145 Even if the evidence is relevant, plaintiffs
argue that it should be excluded pursuant to Rule 403 because “its probative value is
substantially outweighed by the danger of unfair prejudice, confusion of the issues,

or misleading the jury[.]”146 Specifically, plaintiffs contend that, because the cost to
build the property ten years ago is less than the cost to build it today, allowing the

144 R. Doc. No. 33.
145 See generally R. Doc. No. 33-1.
146 Id. at 4 (quoting Fed. R. Evid. 403).
jury to hear the cost to build the property ten years ago “would only prejudice
[p]laintiffs and mislead the jury.”147
Defendant does not oppose the motion to the extent it seeks to exclude evidence

about the existence of loans related to the building of the property.148 However,
defendant contends that evidence of the cost to build the property is relevant as it
provides context for determining whether defendant’s decision not to pay plaintiffs’
initial demand was arbitrary and capricious.149 Defendant also asserts that the
evidence is relevant to determining which “like kind and quality” materials should
apply to the reconstruction or repair of any storm-related damage.150

In reply, plaintiffs assert that defendant never stated its decision to trigger
appraisal was based on its concerns about the costs claimed by plaintiffs’ when
compared to the cost of building the property.151 Plaintiffs also argue that defendant
has not established that the cost to build the property ten years ago has any bearing
on the cost to fix the property today.152 Plaintiffs emphasize that reconstruction cost
is assessed “at the time of the loss” such that the cost to build ten years earlier is
irrelevant.153 Additionally, plaintiffs assert that the building cost does not establish

what would constitute “like kind and quality” materials for individual damaged

147 Id. at 5–6.
148 R. Doc. No. 42, at 1–2.
149 Id. at 2.
150 Id. at 3.
151 R. Doc. No. 47, at 1–2.
152 Id. at 2–3.
153 Id. at 3.
components of the property such as the roof, imported onyx and marble, contents, and
crown molding hand painted by an artist.154
Pursuant to Federal Rule of Evidence 401, evidence is relevant if “it has any

tendency to make a fact more or less probable than it would be without the evidence”
and “the fact is of consequence in determining the action.” Rule 402 provides that
“[i]rrelevant evidence is not admissible.” Additionally, pursuant to Federal Rule of
Evidence 403, courts “may exclude relevant evidence if its probative value is
substantially outweighed by the danger of . . . unfair prejudice, confusing the issues,
misleading the jury, undue delay, wasting time, or needlessly presenting cumulative

evidence.” “The grant or denial of a motion in limine is considered discretionary[.]”
Hesling v. CSX Transp., 396 F.3d 632, 643 (5th Cir. 2005) (italics added).
Having considered the relevant standards and the parties’ arguments, the
Court grants the motion in limine with respect to the existence of loans as unopposed.
However, with respect to the question of evidence regarding the cost to construct the
property ten years ago, the Court finds that references to the original costs of specific
materials or even the costs of building certain portions of the property may be useful

in determining whether the parties legitimately disputed the costs of replacement
materials and which materials would qualify as “like kind and quality” materials. At
this time, the Court lacks sufficient information to make a finding pursuant to Rule
403 regarding whether the prejudicial effect of such evidence is substantially

154 Id. at 3–4.
outweighed by the probative value of such evidence. Accordingly, the Court will defer
its decision on this aspect of the motion in limine until trial.
V. CONCLUSION

For the foregoing reasons,
IT IS ORDERED that defendant’s motion for summary judgment is
GRANTED IN PART and DENIED IN PART.
IT IS FURTHER ORDERED that the motion is GRANTED to the extent it
seeks dismissal of plaintiffs’ claims for ALE that have not yet been incurred and to
the extent it seeks dismissal of plaintiffs’ bad faith claims based on the October 1,

2023 and July 28, 2023 payments.
IT IS FURTHER ORDERED that the motion is GRANTED to the extent it
seeks dismissal of any bad faith claims based on the November 9, 2022 payment
except as it relates to the difference between defendant’s final JS Held estimate and
plaintiffs’ public adjuster estimate.
IT IS FURTHER ORDERED that the motion is DENIED to the extent it
seeks dismissal of plaintiffs’ other claims for bad faith damages.

IT IS FURTHER ORDERED that plaintiffs’ claims for ALE that have not
yet been incurred and any claims for bad faith damages based on the October 1, 2023
payment, the July 28, 2023 payment, and the November 9, 2022 payment—except as
it relates to previously described difference between the parties’ estimates—are
DISMISSED WITH PREJUDICE.
IT IS FURTHER ORDERED that plaintiffs’ motion for partial summary
judgment is DENIED.
IT IS FURTHER ORDERED that plaintiffs’ motion in limine is GRANTED
IN PART and DEFERRED IN PART. The motion is GRANTED to the extent it
seeks to exclude evidence of loans related to the construction of the property. The
motion is DEFERRED until trial to the extent it seeks to exclude references to costs
at the time of construction. The Court will consider the admissibility of such evidence
following any properly made objections during the trial.
New Orleans, Louisiana, April 30, 2024.

UNITED STATES DISTRICT JUDGE

32

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10190757. Public record. Not legal advice.