# Lamar Advertising Company v. Zurich American Insurance Company

> District Court, M.D. Louisiana · March 29, 2021

URL: https://www.frixlaw.com/law-library/cases/10191796

## Case

- **Court:** District Court, M.D. Louisiana
- **Decided:** March 29, 2021
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA
LAMAR ADVERTISING
COMPANY
CIVIL ACTION
VERSUS
NO. 18-1060-JWD-RLB
ZURICH AMERICAN
INSURANCE COMPANY

RULING AND ORDER
This matter is before the Court on two Motions for Partial Summary Judgment. The first
Motion for Partial Summary Judgment (Doc. 105) was filed by Defendant Zurich American
Insurance Company (“Zurich” or “Defendant”). Plaintiff Lamar Advertising Company (“Lamar”
or “Plaintiff”) opposes the motion. (Doc. 118.) Zurich filed a reply. (Doc. 128.)
The second Motion for Partial Summary Judgment Regarding Zurich’s Failure to Pay for
Any of Lamar’s Lost Business Income (Doc. 111) was filed by Lamar. Zurich opposes the
motion. (Doc. 120.) Lamar filed a reply. (Doc. 129.)
Oral argument is not necessary. The Court has carefully considered the law, facts in the
record, and arguments and submissions of the parties and is prepared to rule. For the following
reasons, both motions are denied.
I. Background
A. Relevant Facts
Zurich issued and delivered Policy No. MLP 4856733-06 (“Policy”), an “all risks”
commercial property insurance policy, to Lamar at 5551 Corporate Boulevard, Baton Rouge,
Louisiana 70808. (Lamar’s Statement of Material Facts That Are Not in Dispute (“SMF”) ¶ 1,
Doc. 111-2; Zurich’s Opposing Statement of Material Facts (“OSMF”) ¶ 1, Doc. 120-1.)1 The
Policy was in effect from March 1, 2017 to March 1, 2018. (SMF ¶ 3; OSMF ¶ 3.) Lamar is the
“First Named Insured” under the Policy. (SMF ¶ 4; OSMF ¶ 4.) Lamar’s Puerto Rico office is an
“Insured Location” under the Policy. (SMF ¶ 5; OSMF ¶ 5.)
Hurricane Maria made landfall in Puerto Rico on September 20, 2017, as a Category 4

hurricane, and damaged Lamar’s Puerto Rico office and its contents. (SMF ¶ 6; OSMF ¶ 6.)
Hurricane Maria was a “Named Storm” and a “Covered Cause of Loss” as defined by the Policy.
(Id.) Zurich received notice that Lamar’s Puerto Rico office was damaged by Hurricane Maria on
September 22, 2017.2 (SMF ¶ 7; OSMF ¶ 7.)
Thereafter, Zurich’s representatives inspected damages caused by Hurricane Maria at
Lamar’s Puerto Rico office on October 11, 2017, October 18, 2017, October 23, 2017, October
31, 2017, April 13, 2018, and May 12, 2018. (SMF ¶ 8; OSMF ¶ 8.)
On October 13, 2017, Zurich received the following documents from Lamar: (a) “before”
hurricane photos; (b) “after” hurricane photos; (c) a copy of the lease agreement for Lamar’s

Puerto Rico office; (d) a cost summary of improvements and furniture, fixtures, and equipment
in the office prior to the Hurricane (totaling more than $1.3 million); (e) an invoice for 80%
cleanup and 75% of gypsum demolition; and (f) an e-mail outlining the cost for cleanup and
gypsum demolition. (SMF ¶ 9; OSMF ¶ 9.)

1 Many of the facts in this case are undisputed. Generally speaking, when both the SMF and OSMF are cited, the
fact is undisputed, and the statement is taken almost verbatim from the SMF. Additionally, since the statements of
material fact are largely identical as it relates to both Zurich and Lamar’s motions for partial summary judgment, the
Court only cites to Lamar’s SMF and Zurich’s OSMF submitted with Lamar’s motion for the sake of judicial
economy.
2 The damages to Lamar’s Puerto Rico office caused by Hurricane Maria were not fully repaired until at least mid-
April 2018. (SMF ¶ 11; OSMF ¶ 11.)
On March 19, 2018, Zurich’s representatives received documentation estimating that
Lamar had sustained more than $4 million in total business income losses as a result of
Hurricane Maria. (SMF ¶ 12; OSMF ¶ 12.)
On July 13, 2018, Zurich’s representatives received documentation estimating that at
least $1,111,189 of Lamar’s total business income losses were attributable to a suspension of

Lamar’s business activities at its Puerto Rico office. (SMF ¶ 13; OSMF ¶ 13.) In reaching this
number, Lamar took its total estimated business income loss of $5 million and allocated it
between those losses attributable to income lost from damage to “billboards” and income loss
attributable to damage to the “office.” (MDD Dep., Doc. 110-3 at 16–17.)
On March 18, 2019, Zurich’s representatives received the following documents: a copy
of Lamar’s lease for its Puerto Rico office; detailed monthly statements from January 2014
through March 2018; monthly revenues broken down by charted panel from January 2014 to
March 2018; a list of contracts that were put on hold due to Hurricane Maria; and payroll
information from January 1, 2017 to March 31, 2018. (SMF ¶ 15; OSMF ¶ 15.)

B. Zurich’s “Estimate”
Zurich retained Brian Mohlenhoff to serve as its expert in forensic accounting in this
action. Mohlenhoff is employed by Matson, Driscoll, and Damico, LLP (“MDD”) and served as
its Rule 30(b)(6) corporate representative.
In March 2019, MDD prepared an estimate of the amount of business income loss Lamar
sustained attributable to its Puerto Rico office. The parties heavily dispute this document and its
significance.
Specifically, Lamar contends that MDD calculated its business income loss and estimated
that was more than $1 but less than $500,000. It cites to the following deposition testimony:
Q. Okay. For office related was it less than five hundred thousand dollars?
A. I believe so….
Q. Okay. Was it more than a dollar?
A. Yes.
(MDD Dep., Doc. 110-3 at 12–13.)

Zurich, on the other hand, denies this assertion based on Mohlenhoff’s and MDD’s
testimony that the estimate was a “corrected claim” which was prepared and given solely for
purposes of mediation. (MDD Dep., Doc. 120-4 at 11–12, 13–14; Mohlenhoff Dep., Doc. 120-5
at 13–17, 18–20.) According to Mohlenhoff, MDD’s “corrected claim” is actually Lamar's July
2018 claim presentation with numbers that reflect its own profit and loss statements. (MDD
Dep., Doc. 110-3 at 18; Mohlenhoff Dep., Doc. 120-5 at 17.) Additionally, MDD testified that it
disagreed with the allocation used in Lamar’s July 2018 claim and explained that it would
allocate the loss based on revenues by looking at “the various sources of revenue that were
achieved for this operation and where they were from and apply what was related to billboard

and what was related to the office.” (MDD Dep., Doc. 120-4 at 8–10.)
In response, Lamar argues that the fact that Mohlenhoff calls them “ ‘corrected claims’
does not change the undisputed fact that Zurich’s accountants could, and did, prepare estimates
of the amount of business interruption loss resulting from damage” to Lamar’s office. (Doc. 129-
1 at 1–2.)3
Lamar points out that Mohlenhoff, in his capacity as MDD's corporate representative,
testified that prior to his deposition, he reviewed unredacted versions of certain business loss

3 In its reply SMF, Lamar requests that the Court strike Zurich’s above response because “the record materials
Zurich cited do not support its denial of Fact No. 16.” (Doc. 129-1 at 1–2.) However, Lamar does not cite to any
rule, case, or law that requires the Court strike a response to a statement of material fact on this basis. Therefore, the
Court declines to do so.
estimates prepared by MDD for mediation purposes. (MDD Dep., Doc 110-3 at 6–7.) As to that
estimate, Mohlenhoff testified:
Q. And in the unredacted version that you looked at of that document was there
any Business Interruption loss estimates of the office that MDD prepared?

A. Yes. It was utilizing the claim percentages.…

Q. Did you make any assumptions in forming that estimate?

A. We utilized what we had to make some corrections to the claim where we
felt weren’t correct for, for trending and expenses…. I was asked by the
attorneys to come up with an estimate of loss based on the documentation I
had and to utilize what I had to come up with something to go to mediation
and try to settle the file….

(MDD Dep., Doc 110-3 at 7, 8–9.)
Moreover, during MDD’s deposition in March 2019, it testified that it currently had
enough information to prepare an estimate of at least $1. (MDD Dep., Doc. 110-3 at 23.)
Q. …Does MDD currently have enough information to prepare any estimate
of Lamar’s Business Interruption loss that’s attributable to damage to the
Puerto Rico office?

A. Yes, I have information, but I cannot attribute.

Q. And you have enough information to prepare an estimate?

A. Any is a big word.

Q. Any estimate?

A. That’s my –

Q. Any estimate—

A. – so it’s clear any –
Q. – one dollar?
A. You can – yeah
Q. Okay, it has enough information?
A. It can be very high level not real specific, but you can, yes.
(MDD Dep., Doc. 110-3 at 23–24; Doc. 120-4 at 14 (“Q. - - but MDD came to an estimate,
correct? A. - - for settlement purposes in a mediation only, for no other reason.”).)
C. Lamar’s Estimate

Lamar retained Ralph Stephens as its expert forensic accountant to calculate its business
income loss resulting from Hurricane Maria for the period of September 20, 2017 through March
2018. (Stephens Rep., Doc. 105-5 at 5.) On August 30, 2019, Zurich’s representatives received
Stephens’ report, which provides in part:
Hurricane Maria made landfall in Puerto Rico on September 20, 2017, causing
damage to Lamar Advertising Company's business operations in Puerto Rico. It is
estimated that the Puerto Rican operation's total business interruption loss ranges
from approximately $3,077,000 to $3,926,000.

To determine the business interruption loss that is attributable to the office building
that housed Lamar Advertising Company's business operations in Puerto Rico, the
scope of operations at the office building and the value the office building adds to
the Puerto Rican operations revenue generation were considered. A majority of the
operations occurs at this office building, including sales, billing, billboard design,
staging, and other activities. The office building is an integral and critical part of
the revenue generation for Lamar's Puerto Rican operations. Based on these
considerations, a 50 percent allocation of business interruption loss is appropriate.

Based on the importance of the office building, the business interruption loss
attributable to the office building as a result of Hurricane Maria is estimated to
range from approximately $1,539,000 to $1,963,000.

Although the allocation based on importance is an appropriate approach, an
alternative allocation method based on expenses was also considered. Based on an
expense allocation, the business interruption loss attributable to the office building
as a result of Hurricane Maria is estimated to range from approximately $663,000
to $859,000.

(Stephens Rep., Doc. 105-5 at 3.)
In reaching these estimates, Stephens explains in his report that:
… the Office and the billboards were dependent on each other and reported together
within Lamar PR's financial statements. As such, the business interruption loss
incurred by Lamar PR will need to be allocated between the Office and the
billboards because the Zurich Policy covers business interruption loss resulting
from a suspension of Lamar PR's business activities at the Office.

(Id. at 14.)
Likewise, Stephens explained in his deposition that:
Q. … In bold in the middle of this page, it says, "Based on the importance of
the ops building, the business interruption loss attributable to the office
building as a result of Hurricane Maria is estimated to range from
approximately $1,539,000 to $1,963,000." How was that determined?

A. That was determined by looking at the total business interruption losses and
then allocating it 50 percent to the billboards and 50 percent to the office.

Q. And how did you determine that 50 percent of the allocation should be to
the billboards and 50 percent should be to the office?

A. Because looking at it in this particular case, you had two -- two integral
parts of the business. One, you had the billboards in which the advertising
was displayed; and the other, you had the office in which all of the business
operations that -- that allowed for the billboard operations to take place.

So you had all the billing, all the contracts, all the legal, all the setup, all the
staging was done in the office. So, to have an office and no billboards, you'd
have no revenue. To have billboards and no office, you'd have no revenue,
so...

(Stephens Dep., Doc. 110-11 at 15–16.)
Zurich points out that Stephens testified that his calculations included lost revenues from
damaged billboards.4 (Stephens Dep., Doc. 105-4 at 8.) Specifically, Zurich cites to the
following portion of Stephens’ deposition:
Q. … Can you calculate Lamar's business interruption loss without using loss
of revenue from damaged billboards?

4 In its reply SMF, Lamar requests that the Court strike Zurich’s above response because the record materials Zurich
cited do not support its “qualified” response. (Doc. 129-1 at 2–3.) While the Court declines to strike Zurich’s
response, it will deem the undisputed portions of Lamar’s SMF admitted.
A. To calculate -- to calculate the loss of business revenue, you need to
calculate the loss of revenue from -- from the operations in Puerto Rico,
which include the billboards, absolutely.

Q. So, the answer is, no, you cannot calculate Lamar's business interruption
loss without using loss of revenue from damaged billboards, correct?

Mr. DeBarros: Objection; misstates the testimony.
A. Right. You would need to calculate the loss of revenue from the operations
in Puerto Rico in order to do that, which includes the revenue from the
billboards. That's correct.

(Stephens Dep., Doc. 105-4 at 9.)
D. Additional Evidence5
Under the Policy, a $250,000 deductible applies to all of Lamar’s Hurricane Maria losses.
(SMF ¶ 20; OSMF ¶ 20.) Zurich subtracted the $250,000 deductible from a January 22, 2018
check it sent to Lamar for property damage. (Id.) By August 30, 2018, Zurich had paid Lamar
$1,225,062.32 for property damage to Lamar’s Puerto Rico office and contents caused by
Hurricane Maria. (SMF ¶ 14; OSMF ¶ 14.) However, to date, Zurich has not paid Lamar a single
cent for any business income Lamar lost as a result of Hurricane Maria. (SMF ¶ 19; OSMF ¶ 19.)
1. Lamar’s Other Evidence
Lamar asserts that “Zurich’s accountant has no opinion as to whether the business income
Lamar lost” was a result of damage to its office, its billboards, “or anything else.” (Doc. 111-2 at
7.) In support of this contention, Lamar relies on MDD’s testimony where it testified that “we

5 The Court notes that certain facts relating to off-premises service interruption time element loss have been omitted
as irrelevant for the purposes of both motions. As Zurich correctly contends, Lamar’s business interruption claim,
according to its own expert, is based on lost revenues related to its Puerto Rico office and its damaged billboards.
(See Doc. 128 at 3.) Nowhere does Lamar’s expert mention a business interruption claim for losses arising from an
off-premises service interruption.
cannot attribute what amount of any loss is related to the office or billboards or anything else.”
(MDD Dep., Doc. 110-3 at 19.)
Lamar also cites to the following portion of Mohlenhoff’s deposition:
Q. You do not opine in your August 30th, 2019 report that there was no
suspension of business activities at Lamar's Puerto Rico office as a result of
Hurricane Maria, correct?

A. Correct.

Q. You do not opine in your August 30th, 2019 report that Lamar sustained no
business interruption loss as a result of a suspension of business activities
at Lamar's Puerto Rico office caused by damage to that office, correct?

A. Correct.

(Mohlenhoff Dep., Doc. 110-4 at 3.)
Zurich denies this assertion arguing that: “(1) Lamar has failed to produce sufficient
evidence to show that it sustained a business interruption loss solely attributable to damage to its
office; (2) Lamar has not produced any evidence to show that its office generated any revenue at
all; and (3) the evidence Lamar has produced in support of its claim shows that all of its revenue
was derived from billboards.” (Doc. 120-1 at 2–3.) In support of this, Zurich likewise relies on
MDD’s and Mohlenhoff’s testimony.
MDD testified that “we’ve never been provided all the documents we needed to prepare
an estimate” and that “all the revenue information provided [to it] was revenues from
billboards.” (MDD Dep., Doc. 120-4 at 18, 19; id. at 15–17 (“[Lamar] suffered a loss of revenue.
I have not been able to determine what it’s related to.”).) MDD explained:
Q. Okay. Is it MDD’s opinion that it was not essential for the operation of
Lamar’s Puerto Rico business operations to have an office or warehouse?

A. We were never provided enough information to fully understand the, the
operations.…
Q. Okay. Is it MDD’s opinion that MDD does not currently have enough
information to prepare any estimate of Lamar’s Business Interruption loss
attributable to damage to the Puerto Rico office and warehouse caused by
Hurricane Maria?

A. Yes.… We’ve never been provided all the documents we needed to
prepare an estimate…. We have general information, but I don’t have
enough to fully apply it to the pieces.

(MDD Dep., Doc. 120-4 at 17, 18.)
Likewise, Mohlenhoff testified that he still doesn’t have enough information to estimate
with reasonable certainty what amount of business interruption loss was attributable to Lamar’s
office. (Mohlenhoff Dep., Doc. 120-5 at 6.) When asked what additional information he needed,
Mohlenhoff explained:
A. As we’ve talked about, I need to understand the various documents and
what they represent. And there’s revenue streams that I don’t know what
they are. There’s revenues not assigned to a panel. I don’t know why not.
…I think it’s just a blank for some reason. I would like to know why.
Should it be, should it not be? Those are some questions I have….

… it's kind of a wide-ranging question. I'd like to walk through the
expenses, pre- and post-loss, understanding each one, what it is, what it
represents, is it related to a billboard, is it related to an office…. [If] it's
fixed? Is it variable?

(Mohlenhoff Dep., Doc. 120-5 at 7.)

He also testified that Lamar has not supported how the office generates revenue and that
his understanding of Lamar’s income generation was that “the revenue comes from the
billboard[s]…it comes from the panels that they rent.” (Mohlenhoff Dep., Doc. 120-5 at 7–9, 10;
id. at 12 (Lamar has “totally different” revenue generation in that if the billboards are there,
“they’re getting revenue. If [they are] not, then they couldn’t charge revenue.”).)
In response, Lamar again cites to Mohlenhoff’s testimony that: (a) he “cannot attribute
what amount of [Lamar’s business interruption] loss is related to the office or billboards or
anything else” (MDD Dep., Doc. 110-3 at 19); and (b) in his August 30th, 2019 report, he does
not opine that Lamar sustained no business interruption loss as a result of a suspension of
business activities at its office caused by damage to that office. (Mohlenhoff Dep., Doc. 110-4 at
3.)6
2. Zurich’s Other Evidence

Zurich contends that Lamar has failed to produce sufficient evidence to show that it
sustained a business interruption loss solely attributable to damage to its office. In support of this
contention, Zurich re-iterates that Stephens testified that he included damaged billboards in his
calculations in reaching his August 30, 2019 estimate. (Stephens Dep., Doc. 120-3 at 8; id. at 9
(testifying that to calculate Lamar’s business interruption loss, he would need to calculate the
loss of revenue from the operations in Puerto Rico, which include the billboards).)
Zurich also relies on portions of MDD’s and Mohlenhoff’s deposition testimony where
they explain that they cannot determine what amount of loss (if any) is attributable to Lamar’s
office because they still do not have enough information. (See MDD Dep., Doc. 120-4 at 18, 19

(“we’ve never been provided all the documents we needed to prepare an estimate.”); id. at 15–
17.) (See also, Mohlenhoff Dep., Doc. 120-5 at 6 (testifying that he still doesn’t have enough
information to estimate with reasonable certainty what amount of business interruption loss was
attributable to Lamar’s office); id. at 7, 8–9, (Lamar has not supported how the office generates
revenue); see also id. at 10, 12).)
Zurich’s representative similarly testified:
Q. …What policy provision is Zurich relying on in this case to refuse payment
for Lamar's claim for lost business income? I want Zurich's position on that.

6 In its reply SMF, Lamar requests that the Court strike Zurich’s above response because “the record materials
Zurich cited do not support its denial of Fact No. 18.” (Doc. 129-1 at 3.) However, Lamar does not cite to any rule,
case, or law that requires the Court strike a response to a statement of material fact on this basis. Therefore, the
Court declines to do so.
A. Well, again, it's -- it's my understanding that they have not refused to pay,
we just need more information to determine the correct amount to pay…

Q. And so it is Zurich's position today that it still doesn't have enough
information to pay Lamar one penny for the business interruption loss
Lamar sustained as a result of Hurricane Maria, even though Zurich was
entitled to take discovery from Lamar in this case; is that correct?....

A. We need additional information, from my understanding of the file.

(Zurich Dep., Doc. 118-4 at 18–19, 20; id. at 14 (“Q. As of today, Zurich has never made any
offer whatsoever to Lamar to settle any of Lamar's claim for lost business income as a result of
Hurricane Maria, has it? A. No. My understanding is Zurich is still waiting on documentation to
support the claim.”).)
In response, Lamar contends that the above cited evidence fails to dispute that at least $1
of its business income loss resulted from a suspension of business operations at its office due to
physical damage to the office.7 (Doc. 129-1 at 3.) It then cites to Zurich’s Rule 30(b)(6)
testimony wherein Zurich’s representative testified that he was not aware of any provision in the
Policy stating that if Lamar sustained damage to both its billboards and its office, then there is no
coverage at all for Lamar's business income losses. (Zurich Dep., Doc. 110-1 at 21–22.)
E. Policy Provisions
The parties identify the following Policy provisions as relevant to the instant motions:
SECTION IV – TIME ELEMENT
4.01. LOSS INSURED
4.01.01. The Company will pay for the actual Time Element loss the Insured
sustains, as provided in the Time Element Coverages, during the Period of
Liability. The Time Element loss must result from the necessary

7 In its reply SMF, Lamar again asks the Court to strike Zurich’s above response because “the record materials
Zurich cited do not support a denial of Fact No. 21.” (Doc. 129-1 at 3.) However, Lamar does not cite to any rule,
case, or law that requires the Court strike a response to a statement of material fact on this basis. Therefore, the
Court again declines to do so.
Suspension of the Insured's business activities at an Insured Location. The
Suspension must be due to direct physical loss of or damage to Property (of
the type insurable under this Policy other than Finished Stock) caused by a
Covered Cause of Loss at the Location[.]
(Policy, Doc. 105-3 at 31.)
4.02. TIME ELEMENT COVERAGES
4.02.01. GROSS EARNINGS
4.02.01.01. Gross Earnings loss is the actual loss sustained by the Insured during the Period of
Liability.
4.02.01.02. Gross Earnings value is determined as follows:
4.02.01.02.01. The sum of:
4.02.01.02.01.01. Total net sales value of production;
4.02.01.02.01.02. Total net sales of Merchandise;
4.02.01.02.01.03. The rental income; and
4.02.01.02.01.04. Other income derived from the Insured's business activities.
4.02.01.02.02. Less the cost of the following:
4.02.01.02.02.01. Raw Stock from which production is derived;
4.02.01.02.02.02. Supplies consisting of materials consumed directly in conversion
of Raw Stock into Finished Stock or in supplying the service(s)
sold by the Insured;
4.02.01.02.02.03. Merchandise sold, including related packaging materials; and
4.02.01.02.02.04. Service(s) purchased from outsiders (not Insured's employees) for
resale, which do not continue under contract.
4.02.01.02.03. Gross Earnings loss is determined as follows:
Gross Earnings value that would have been earned during the Period of
Liability, less charges and expenses that do not necessarily continue
during the Period of Liability.
(Policy, Doc. 105-3 at 31–32.)
SECTION VII - DEFINITIONS
The following term(s) wherever used in this Policy means:
7.11. Covered Cause of Loss - All risks of direct physical loss of or damage from any
cause unless excluded….
7.56. Suspension (Suspended) -
7.56.01. The slowdown or cessation of the Insured's business activities: or
7.56.02. As respects rental income that a part or all of the Insured Location is
rendered untenantable.
(Policy, Doc. 105-3 at 64–65, 70.)
Finally, Endorsement Number 3 of the Policy provides:
It is hereby agreed and understood that the following changes are made to the policy:
Billboards, highway signs, and bus stop advertising structures are excluded from Covered
Property on this policy. (Doc. 105-3 at 93; Doc. 105-2 at ¶ 2; Doc. 118-2 at ¶ 2.)
II. Relevant Standard
“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.” Fed. R.
Civ. P. 56(a). If the mover bears his burden of showing that there is no genuine issue of fact, “its
opponent must do more than simply show that there is some metaphysical doubt as to the
material facts ... [T]he nonmoving party must come forward with ‘specific facts showing that
there is a genuine issue for trial.’ ” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S.
574, 586-587, 106 S. Ct. 1348, 89 L. Ed. 2d 538 (1986) (citations omitted). The non-mover's

burden is not satisfied 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
and internal quotation marks omitted). “Where the record taken as a whole could not lead a
rational trier of fact to find for the non-moving party, there is no ‘genuine issue for trial.’ ”
Matsushita Elec. Indus. Co., 475 U.S. at 587. Further:
In resolving the motion, the court may not undertake to evaluate the credibility of
the witnesses, weigh the evidence, or resolve factual disputes; so long as the
evidence in the record is such that a reasonable jury drawing all inferences in favor
of the nonmoving party could arrive at a verdict in that party's favor, the court must
deny the motion.
Int’l Shortstop, Inc. v. Rally's, Inc., 939 F.2d 1257, 1263 (5th Cir. 1991) (citations omitted).
III. Parties’ Arguments8
A. Zurich’s Motion for Partial Summary Judgment
1. Zurich’s Original Memorandum (Doc. 105-1)
Zurich argues that it is entitled to a partial summary judgment holding: (1) that the Policy

excludes billboards from “Covered Property,” and (2) thus, there is no coverage for Lamar’s
business interruption claim. (Doc. 105-1 at 1.)
In support of its first argument, Zurich cites to Endorsement Number 3 of the Policy
which provides, “Billboards… are excluded from Covered Property on this policy.” (Id. at 3
(citing Policy, Doc. 105-3 at 93).)
In support of its second argument, Zurich also cites to the Policy, specifically, the Time
Element coverage section, which provides in relevant part:
The Time Element loss must result from the necessary Suspension of the Insured's
business activities at an Insured Location. The Suspension must be due to direct
physical loss of or damage to Property (of the type insurable under this Policy other
than Finished Stock) caused by a Covered Cause of Loss at the Location, …

(Id. at 4 (citing Policy, Doc. 105-3 at 31 (emphasis in original)).) Based on the “plain language”
of this provision, Zurich represents that “a Time Element loss must result from the suspension of
Lamar’s business activities at an ‘Insured Location,’ and that the suspension must be due to direct
physical loss or damage to Property covered by the Policy – in this case, its office and/or
warehouse.” (Id.) However, since billboards are not Covered Property under the Policy, the Time
Element coverage does not apply to any physical loss of or damage to them. (Id.)

8 The Court notes that certain arguments relating to off-premises service interruption time element loss have been
omitted as irrelevant for the purposes of both motions.
Despite this, Zurich points out that Lamar made a business interruption claim using lost
revenues from damage to its billboards. In support of this contention, Zurich relies on the testimony
of Lamar’s forensic accountant, Stephens, who testified: (1) that the business interruption
calculations he prepared for Lamar included lost revenues from damaged billboards and (2) that
he did not and could not calculate a business interruption loss without using loss of revenues from

its damaged billboards. (Id. at 4–5 (citing Stephens Dep., Doc. 105-4 at 64, 65).) Therefore, based
on Stephens’ testimony, and the fact that billboards are not Covered Property under the Policy,
Zurich concludes that it is entitled to a partial summary judgment holding that there is no coverage
for Lamar’s business interruption claim. (Id. at 5.)
2. Lamar’s Opposition (Doc. 118)
In opposition, Lamar argues that Zurich’s position should be rejected for three reasons.
First, Zurich mischaracterizes Stephens’ testimony. (Doc. 118 at 10–12.) According to Lamar, it
is “not Stephens’ testimony (as Zurich represents) that all of Lamar’s lost business income was
due ‘solely’ to the damaged billboards.” (Id. at 12.) On the contrary, Stephens testified that at
least $663,000 of Lamar’s business income losses were due to a suspension of business
operations at its office resulting from physical damage to that office, which is covered by the

Policy. (Id.)
Additionally,
Stephens testified that his business interruption calculations “include lost revenues
from damaged billboards” and that he “would need” to consider lost revenues from
damaged billboards in his calculations because he took the total business income
losses Lamar sustained due to all causes of loss (including lost revenues due to
damage to the office, as well as lost revenues due to damage to the billboards) and
then segregated those total business income losses between: (i) losses attributable
to a suspension of business operations at Lamar’s Puerto Rico office because of
damage to the Puerto Rico office and its contents; and (ii) losses attributable to
damage to Lamar’s billboards. … Therefore, the only evidence Zurich relies on to
support its motion does not even support its position.
(Id. at 10–11, 12 (citing Stephens Dep., Doc. 118-2; Stephens Rep., Doc. 118-2 at 28).)

Second, the issue raised in Zurich’s motion—whether Lamar’s lost business income
resulted solely from damage to its office or damage to billboards—"is inherently a factual issue
as to the cause of Lamar’s business income loss,” which cannot be decided on summary
judgment “unless reasonable minds could not differ” on the issue after drawing all reasonable
inferences in Lamar’s favor. (Id. at 2, 12–13 (citing Int’l Shortstop, 939 F.2d at 1263).)
Lamar then cites to four cases which “demonstrate the insured’s minimal burden in
opposing its insured’s summary judgment motion on the issue of the causation of a business
income loss.” (Id. at 13–16.) Specifically, Lamar cites to Evans and Clover, wherein the court
denied the insurer’s motion for summary judgment because there was a dispute as to whether the
business interruption claim was caused by roof damage (as the insured testified) or other factors
(as the insurer contended). (Id. at 13–14 (citing Evans v. Lafayette Ins. Co., 2007 WL 4545883
(E.D. La. Dec. 18, 2007); Clover v. Allstate Ins. Co., 2008 WL 821961 (E.D. La. Mar. 26,
2008)).)

Lamar cites ABM Industries for the proposition that “the concurrence of damage to
property that is covered by the policy and damage to property that is not covered by the policy
does not bar an insured’s claim for lost business income due to damage to property that is
covered by the policy.” (Id. at 15–16 (citing Zurich Am. Ins. Co. v. ABM Indus., Inc., 397 F.3d
158, 167 (2d Cir. 2005)).)
Lastly, Lamar points out that the court in Courtenay noted, “[t]he cause of the suspension
is a question of fact to be determined at trial, and if Plaintiff meets its burden of establishing that
the suspension was caused by direct physical loss to property resulting from a Covered Cause of
Loss, then coverage is triggered.” (Id. at 14–15 (quoting Courtenay, Hunter & Fontana, LLP v.
Massachusetts Bay Ins. Co., 2008 WL 3876421, at *3 (E.D. La. Aug. 19, 2008)).)
Thus, applying the above principles to this case, Lamar argues that reasonable jurors,
drawing all reasonable inferences in its favor, could render a verdict that its business income
losses were due to “direct physical loss of or damage” to its Puerto Rico office, which it contends

is covered by the Policy. (Id. at 16–17.)
Finally, Lamar argues that:
While Zurich failed to prove that all of Lamar’s business income losses are
unambiguously excluded from coverage under the Policy, Lamar met its burden of
opposing Zurich’s motion for summary judgment simply by showing that: (a)
Lamar sustained a business income loss; [and] (b) there was significant damage to
the office, warehouse, paperwork, computers, desks, phones, chairs, stock, and
other equipment resulting in a suspension of business activities at the Office for
months….

When Ralph Stephens’ testimony is put in its correct context and the full summary
judgment record is considered, not only is summary judgment in Zurich’s favor
unwarranted because a juror drawing all reasonable inferences in Lamar’s favor
could render a verdict that Lamar’s business income loss was due to “direct physical
loss of or damage” to Lamar’s office, warehouse, and contents (covered by [the]
Policy), […] but Lamar is affirmatively entitled to a summary judgment that Zurich
is liable for penalties, attorneys’ fees, and costs due to Zurich’s failure to timely
pay even $1 of Lamar’s lost business income claim.

(Id. at 13, 16–17.)
3. Zurich’s Reply (Doc. 128)
In response, Zurich contends that its motion presents two “simple” coverage issues: (1)
whether Lamar’s billboards are excluded as Covered Property from the Policy; and (2) whether
coverage is excluded for Lamar’s business interruption claim because it was calculated using lost
revenues from its damaged billboards. (Doc. 128 at 1.)
Preliminarily, Zurich represents, that contrary to Lamar’s argument, interpretation of the
Policy is at issue, not causation, which can properly be resolved on summary judgment. (Id. at 1–
2 (citing Principal Health Care v. Lewer Agency, 38 F.3d 240, 242 (5th Cir. 1996)).) As such,
the cases Lamar relies on are distinguishable from the case at hand because there is no question
in this case that Lamar’s business interruption loss was caused by a covered peril. (Id. at 2–3, 6–
9.)
It then points out that Lamar does not dispute the first issue—that its billboards are

excluded from Covered Property under the Policy. (Id. at 2.) Thus, the only remaining issue is
“whether Lamar can calculate a business interruption claim related solely to damage to its office,
without using lost revenue from its damaged billboards.” (Id.) And again, Zurich contends that
since Stephens testified that he did not and could not calculate Lamar’s business interruption
claim without using lost revenues from damaged billboards, there is no coverage under the
Policy. (Id. at 2, 3–4.)
Zurich also takes issue with Lamar’s contention that it has affirmatively established that
Zurich is liable for at least $1 in business income loss covered under the Policy. (Id. at 5.)
According to Zurich, (1) Lamar has failed to produce sufficient evidence to show that it

sustained a business interruption loss solely attributable to damage to its office; (2) Lamar has
not produced any evidence to show that its office generated any revenue at all; and (3) the
evidence Lamar has produced in support of its claim shows that all its revenue was derived from
billboards. (Id.)
Moreover, Stephens’ testimony that he cannot calculate Lamar’s business interruption
loss without using lost revenues from damaged billboards directly contradicts Lamar’s claim that
at least some of its business interruption loss was due to damage to its office and not damage to
its billboards. (Id. (citing Stephens Dep., Doc. 105-4 at 64, 65).)
B. Lamar’s Motion for Partial Summary Judgment
Lamar’s motion centers on the applicability of La. R.S. 22:1892. Both parties agree that
to recover under this statute, an insured must prove that: (1) the insurer received satisfactory
proof of the loss; (2) the insurer failed to pay the claim within thirty days of receiving
satisfactory proof of loss; and (3) the insurer’s failure to pay the claim was arbitrary, capricious,

or without probable cause. (Doc. 111-1 at 25–26; Doc. 120 at 5.)
1. Lamar’s Original Memorandum (Doc. 111-1)
Lamar begins with some of the same arguments included in its opposition to Zurich's
motion for partial summary judgment. It first argues that the undisputed material facts support
that it has made a prima facie showing that Zurich is liable for at least $1 of lost business income
as covered by the Policy. (Doc. 111-1 at 6.)
Lamar then argues that Zurich is liable for penalties, attorneys’ fees, and costs under La.
R.S. 22:1892 because all three elements are met. It first contends that there is no genuine dispute
of material fact that Zurich received “satisfactory proof of loss” no later than August 30, 2019.
(Id. at 29.) According to Lamar, “satisfactory proof of loss” is a flexible requirement, that does
not need to be in a formal style and is satisfied when an insurer has “enough information to act

upon a claim.” (Id. at 28 (quoting Austin v. Parker, 672 F.2d 508, 520 (5th Cir. 1982)).) Lamar
outlines that Louisiana courts have found the following to constitute satisfactory proof of loss: a
handwritten estimate of the cost of repairs (id. at 26 (citing Sevier v. United States Fid. & Guar.
Co., 497 So. 2d 1380 (La. 1986))); proof of insurance, photographs, and salvage information (id.
at 27 (citing State Farm Mut. Auto. Ins. Co. v. Norcold, Inc., 2011-1355 (La. App. 3 Cir. 4/4/12);
88 So. 3d 1245)); an independent adjuster’s opportunity to discover the extent of damages, but
failure to do so (id. (citing Aghighi v. La. Citizens Prop. Ins. Corp., 2012-1096 (La. App. 4 Cir.
6/19/13); 119 So. 3d 930, 934)); an insurer’s constructive knowledge of the policy limits when it
failed to reasonably investigate the claim (id. (citing Haynes v. Shumake, 582 So. 2d 959, 962–63
(La. Ct. App. 2d Cir. 1991))); and an insured’s first claim under the policy, even though the
claim was still “a work in progress” (id. at 27–28 (quoting R.J. Tricon Co., LLC v. Travelers Ins.
Co., 2009 WL 5173993 (E.D. La. Jan. 8, 2009))).
In addition to this flexible standard, Louisiana courts have “uniformly held that ‘[b]road

latitude is given in proving lost profits because this element of damages is often difficult to
prove,’ ‘such damages need be proven only within reasonable certainty,’ and ‘[p]roof of such
losses need only be as precise as circumstances in a particular situation allow.’ ” (Id. at 28
(citations omitted).)
Under the flexible standards set out above, Lamar argues that Zurich received satisfactory
proof of loss by August 30, 2019, because Zurich had: (a) pictures, documentation, and multiple
inspections showing that Lamar’s office was severely damaged, and that no business operations
were being conducted in that office for months; (b) documentation estimating that Lamar
sustained at least $4 million in total business income losses as a result of Hurricane Maria; (c)

two estimates from Lamar that it sustained at least $663,000 in business income losses
attributable to suspension of business operations at its office; and (d) an estimate from Zurich’s
accountant that Lamar had sustained more than $1 but less than $500,000 in business income
losses attributable to suspension of operations at its office. (Id. at 29–30.)
Lamar then avers that there is no genuine dispute of material fact that Zurich failed to pay
within 30 days of receiving satisfactory proof of loss on August 30, 2019, since it has not paid
for any of that loss to date. (Id. at 30.)
Lastly, Lamar argues that there is no genuine dispute of material fact that Zurich’s failure
to timely pay was “by definition, arbitrary, capricious, or without probable cause.” (Id.) Lamar
maintains that Louisiana courts have found an insurers’ actions to be arbitrary, capricious or
without probable cause when they are unjustified, lack a reasonable basis, or are without
probable cause or excuse. (Id. at 30–31 (citing Reed v. State Farm Mut. Auto. Ins. Co., 2003-
0107 (La. 10/21/03); 857 So. 2d 1012).)
According to Lamar, the Louisiana Supreme Court in La. Bag Co., Inc. v. Audubon

Indem. Co., 2008-0453 (La. 12/2/08); 999 So. 2d 1104, explained that under La. R.S. 22:1892,
[w]here there is a substantial, reasonable and legitimate dispute as to the extent or
amount of the loss, the insurer can avoid the imposition of penalties only by
unconditionally tendering the undisputed portion of the claim. This court held in
McDill that an insurer cannot ‘stonewall’ an insured simply because the insured is
unable to prove the exact extent of his damages. Where the exact extent of the
damages is unclear, an insurer must tender the reasonable amount which is due. We
have defined the “amount that is due” as ‘a figure over which reasonable minds
could not differ . . .’ Any insurer who fails to pay said undisputed amount has acted
in a manner that is, by definition, arbitrary, capricious or without probable cause.
(Id. at 31.)
Based on the foregoing, Lamar rejects Zurich’s assertion that it still needs “more
information to determine the correct amount to pay” as contrary to Zurich’s “affirmative duty to
adjust claims fairly and promptly and to make a reasonable effort to settle claims with the
insured.” (Id. at 32.) Zurich’s behavior is “the precise type of stonewalling the Louisiana
Supreme Court prohibited in La. Bag and McDill.” (Id. (citing La. Bag, 999 So. 2d at 1119–20).)
In sum, Lamar asks the Court to find Zurich liable under La. R.S. 22:1892 because
Zurich received satisfactory proof of loss by August 30, 2019; Zurich has issued no payment on
this claim to date; and this failure to pay is by definition arbitrary, capricious, and without
probable cause. (Id. at 33–34.)
2. Zurich’s Opposition (Doc. 120)
In opposition, Zurich repeats verbatim many of the arguments made in its motion for
partial summary judgment. Zurich first re-urges its argument that Lamar has not made a prima
facie showing that Zurich is liable for any business income loss under the Policy. (Doc. 120 at 6.)
It also rejects Lamar’s reliance on Mohlenhoff’s estimate:
What Mr. Mohlenhoff prepared – solely for purposes of mediation – was a
“corrected claim,” i.e., it was Lamar’s own July 13, 2018 claim submission with
corrected numbers that actually reflect revenue and expense trends from Lamar’s
own financial records. Moreover, it was prepared for the [sole] purpose of
determining what Lamar’s claim submission would be valued at if Zurich accepted
Lamar’s methodology. As Lamar knows, neither Zurich nor Mr. Mohlenhoff has
ever accepted Lamar’s methodology for calculating its alleged business income
loss, because it uses lost revenue from damaged billboards and is based on a false
allocation of expenses – rather than revenues – between its office and its billboards.
Mr. Mohlenhoff’s revision of Lamar’s own defective and disputed claim
submission is not prima facie evidence of liability.

(Id. at 6–7.)

Next, Zurich addresses Lamar’s bad faith claim. Preliminarily, Zurich contends that
“summary judgment is not appropriate when a claim for bad faith penalties depends on factual
determinations concerning the reasonableness of the insurer’s actions.” (Id. at 5–6 (citing
Hartenstein v. State Farm Fire and Cas. Ins. Co., No. 07–4594, 2008 WL 2397713, at *3 & n.
22 (E.D. La. June 10, 2008)).) It also points out that because La. R.S. 22:1892 is penal in nature,
it must be strictly construed. (Id. at 6.)
Zurich then raises an issue with the first element of the statute—satisfactory proof of loss.
Specifically, it argues that it has not received satisfactory proof of loss because “Lamar has failed
to produce sufficient evidence to show that it sustained a business interruption loss solely
attributable to damage to its office.” (Id. at 7.) Lastly, Zurich re-iterates that there is no coverage
for Lamar’s business interruption claim under the Policy. (Id. at 8–9.)
3. Lamar’s Reply (Doc. 129)
In response, Lamar contends Zurich is liable under the statute because Zurich had
“satisfactory proof” that Lamar suffered at least $1 in covered business income loss and Zurich
failed to pay for any of that loss to date. (Doc. 129 at 2–5.)
It then argues that Zurich failed to demonstrate a genuine issue of material fact sufficient
to preclude summary judgment because it did not identify specific evidence in the record: (a) that
Lamar did not sustain at least $1 in lost business income attributable to its office; (b) that a
Policy exclusion clearly and unambiguously excludes all of Lamar’s claim; or (c) that Zurich did
not receive “satisfactory” proof of loss. (Id. at 5.)

Lamar rejects Zurich’s reliance on Stephens’ and Mohlenhoff’s testimony as
“misplaced”. (Id. at 4.) According to Lamar, Mohlenhoff’s assertion that he prepared
“corrected claims” and not “estimates”, does not create a genuine issue of material fact because:
(1) on August 30, 2019, Zurich received Stephens’ report, which estimated that Lamar sustained
at least $663,000 in lost business income attributable to its office; and (2) Mohlenhoff does not
opine that Lamar did not sustain at least $1 in business income loss as a result of a suspension of
Lamar’s operations due to physical damage to the office. (Id.)
Lamar also rejects Mohlenhoff’s assertion that “[a]ll the revenue information provided
[to him] was revenues from billboards” as conclusory, unsubstantiated, and immaterial. (Id. at 6.)

Lamar explains:
That Lamar “generates revenue” by leasing billboards is not material to Lamar’s
Motion. Even accepting as true Brian Mohlenhoff’s bald assertion, … [it] does not
change the undisputed material fact that at least some of Lamar’s business income
was lost because Lamar had no office and no business equipment for months; nor
does it affirmatively establish that all of the income Lamar lost was due to damaged
billboards. Brian Mohlenhoff’s clear and unequivocal testimony was that: (a) he
“cannot attribute what amount of Lamar’s business interruption loss is related to
the office or billboards or anything else”; and (b) he does not opine that Lamar
sustained no business income loss as a result of a suspension of business activities
at Lamar’s Puerto Rico office caused by damage to the office. Therefore, there is
no genuine issue of material fact here.

(Id. at 7–8.)
Lastly, Lamar contends that Stephens’ testimony does not create a genuine issue of
material fact. Again, Stephens explained that in calculating Lamar’s total business income loss,
he segregated billboard losses from office related ones and concluded that Lamar sustained at
least $663,000 in business income losses attributable to physical damage to the office. (Id. at 5–
6.) Thus, based on the undisputed evidence, there is no genuine issue of material fact that Zurich

is liable under La. R.S. 22:1892 because it received satisfactory proof of loss for Lamar’s
business interruption claim by August 30, 2019, and to date, has failed to pay any of that loss.
(Id. at 10.)
IV. Law and Analysis
A. Contract Interpretation
A special subset of principles governs the treatment of contracts at this procedural stage.
Generally, under controlling Louisiana law, “[w]hen a contract can be construed from the four
corners of the instrument, interpretation of the contract presents a question of law that can be
decided on summary judgment.” Young v. Tolintino, 44, 631 (La. App. 2 Cir. 12/2/09); 26 So. 3d

835, 838; see also, e.g., Sims v. Mulhearn Funeral Home, Inc., 2007-0054 (La. 05/22/07), 956
So. 2d 583, 590. As such, determining whether a contract is unambiguous and interpreting an
unambiguous contract are treated as questions of law. See La. Civ. Code art. 2046; Sport Tech,
Inc. v. SFI Mfg., 36,413 (La. App. 2 Cir. 12/20/02); 838 So. 2d 807, 816; NAB Natural Res.,
L.L.C. v. Willamette Indus., 28,555 (La. App. 2 Cir. 08/21/96); 679 So. 2d 477, 480; Brown v.
Drillers, Inc., 93-1019 (La. 01/14/94); 630 So. 2d 741, 748. If, however, the contract is
ambiguous, its opacity can only be resolved by a duly appointed factfinder, not a court on a
motion for summary judgment. See, e.g., Prejean v. Guillory, 2010-0742 (La. 7/2/10); 38 So. 3d
274, 279; Elston v. Montgomery, 46,262 (La. App. 2 Cir. 05/18/11); 70 So. 3d 824, 830–31.
As the Supreme Court of Louisiana has often repeated, “[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.” Carbon v. Allstate Ins. Co., 97-3085 (La.
10/20/98), 719 So. 2d 437, 439. “Interpretation of a contract is the determination of the common
intent of the parties.” La. Civ. Code art. 2045; Clovelly Oil Co., LLC v. Midstates Petroleum Co.,

LLC, 12-2055 (La. 03/19/13); 112 So. 3d 187, 192. The parties’ reasonable intention must be
determined “by examining the words of the contract itself, and not assumed.” Lobell v.
Rosenberg, 2015-0247 (La. 10/14/15); 186 So. 3d 83, 89.
In this process, courts give contract terms their plain, ordinary, and generally accepted
meaning unless the contract provides more specialized ones. Lambert v. Md. Cas. Co., 418 So.
2d 553, 559 (La. 1982). “A provision susceptible of different meanings must be interpreted with
a meaning that renders it effective and not with one that renders it ineffective.” La. Civ. Code art.
2049; Tri-State Bank & Trust v. Moore, 609 So. 2d 1091, 1094 (La. Ct. App. 1992). “Each
provision in a contract must be interpreted in light of the other provisions so that each is given

the meaning suggested by the contract as a whole.” La. Civ. Code art. 2050; Olympia Minerals,
LLC v. HS Res., Inc., 2013-2637 (La. 10/15/14); 171 So. 3d 878, 894.
B. Bad Faith Statute
Courts in Louisiana have set forth that an insured seeking to recover the statutory
penalties under La. R.S. 22:1892 must establish three elements: “(i) that the insurer received a
satisfactory proof of loss, (ii) that the insurer failed to pay the claim within the applicable
statutory period, and (iii) that the insurer's failure to pay was arbitrary and capricious.” Grilletta
v. Lexington Ins. Co., 558 F.3d 359, 368–69 (5th Cir. 2009). One who claims entitlement to
penalties and attorney fees has 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. Reed v. State Farm, 857 So. 2d 1012, 1020 (La. 2003). Further, La. R.S. 22:1892 “must be
strictly construed because it is penal in nature.” Richardson v. GEICO Indem. Co., 2010-0208
(La. App. 1 Cir. 9/10/10), 48 So. 3d 307, 314, writ denied, 2010-2473 (La. 12/17/10), 51 So. 3d
7).

With regard to the first factor, Louisiana has adopted “liberal rules concerning the lack of
formality relative to proof of loss.” Sevier v. U.S. Fid. & Guar. Co., 497 So. 2d 1380, 1384 (La.
1986). Satisfactory proof of loss, as required for an insured to obtain penalties from an insurer, is
that which is sufficient to fully apprise the insurer of the claim and extent of the damage. La.
Bag, 2008-0453, p.16, 999 So. 2d at 1115; McDill v. Utica Mutual Ins. Co., 475 So. 2d 1085,
1089 (La. 1985). So long “as the insurer obtains sufficient information to act on the claim, ‘the
manner in which it obtains the information is immaterial.’ ” Sevier, 497 So. 2d at 1384 (quoting
Austin v. Parker, 672 F.2d 508, 520 (5th Cir. 1982)). Thus, a “satisfactory proof of loss occurs
when the insurer has adequate knowledge of the loss.” In re Hannover Corp. of America, 67 F.3d

70, 73 (5th Cir. 1995) (citations omitted).
Whether and when the insurer received “satisfactory proof of loss” sufficient to trigger
the payment periods is a question of fact. 15 William Shelby McKenzie & H. Alston Johnson,
III, La. Civ. L. Treatise: Insurance Law and Practice § 11:5 (4th ed. 2020) (citing McDill, 475
So. 2d at 1089; La Louisiane Bakery Co. Ltd. v. Lafayette Ins. Co., 61 So. 3d 17 (La. Ct. App.
5th Cir. 2011); Iteld v. Four Corners Const., L.P., 133 So. 3d 312 (La. Ct. App. 4th Cir. 2014);
Lemoine v. Mike Munna, L.L.C., 148 So. 3d 205 (La. Ct. App. 1st Cir. 2014)).
Whether an insurer’s conduct is arbitrary and capricious is also finding of fact. Id. The
Louisiana Supreme Court has cautioned that summary judgment is rarely appropriate when
determining if an insurers actions were arbitrary and capricious. In Merwin v. Spears, 2012-0946
(La. 6/22/12), 90 So. 3d 1041, 1042, the Louisiana Supreme Court reversed a district court’s
grant of summary judgment explaining:
[F]or purposes of plaintiffs' penalty claim, the issue is whether Farmers' failure to
make timely payment was arbitrary, capricious, or without probable cause. La. R.S.
22:1892. We conclude there are genuine issues of material fact as to whether
Farmers' initial decision to deny the claim, based on its investigation and
consultation with plaintiffs' expert, was reasonable under the totality of the facts.
Therefore, the district court erred in granting summary judgment on this issue.
Merwin v. Spears, 2012-0946 (La. 6/22/12), 90 So. 3d 1041, 1042.
C. Analysis
The Court will first address Zurich’s motion, which raises questions of Policy coverage
and interpretation. The Court will then address Lamar’s motion, which will require the Court to
determine whether Lamar is entitled to bad faith penalties under La. R.S. 22:1892 for its business
interruption claim. Related to this issue is whether there is at least some portion of Lamar’s claim
which is undisputed.
1. Zurich’s Motion for Partial Summary Judgment
Preliminarily, the parties dispute whether the determination of coverage for the business
interruption claim can be properly resolved on summary judgment. Lamar contends that
Zurich’s motion cannot be resolved on summary judgment because it raises factual issues as to
the cause of its business income loss. (Doc. 118 at 12–13.) On the other hand, Zurich argues
causation is not the issue, interpretation is, which can properly be resolved on summary
judgment. (Doc. 128 at 1–2.) The Court agrees with Zurich: whether Lamar’s business
interruption claim is prohibited based on the language of the Policy is a legal question that can
properly be resolved on summary judgment. McGuire v. Am. S. Home Ins. Co., 2007-0810 (La.
App. 4 Cir. 10/10/07), 969 So. 2d 681, 684 (citing Robinson v. Heard, 01–1697, p. 4 (La.
2/26/02), 809 So. 2d 943, 945)) (“Interpretation of an insurance policy usually involves a legal
question which can be resolved properly in the framework of a motion for summary judgment.”).
As such, the four cases that Lamar cites to “demonstrate the insured’s minimal burden in
opposing its insured’s summary judgment motion on the issue of the causation of a business
income loss,” are distinguishable on this ground alone. (Doc. 118 at 13–16.) For example, in

Evans, the question before the court was whether the cessation of the insured’s business was
caused by wind damage to its roof (a covered peril) or other factors such as lack of power and a
mandatory evacuation order (non-covered perils). Evans v. Lafayette Ins. Co., 2007 WL
4545883, at *3 (E.D. La. Dec. 18, 2007). The court denied the insurer’s motion for summary
judgment because there were disputed issues of fact regarding the cause of the business
interruption loss. Id. There was no dispute that the property itself was covered under the
insurance policy issued in that case.
In Clover, the question before the court was whether the insured’s business interruption
loss was caused by physical damage to the building from a hurricane, or because she decided not

to re-open her store and move to another state. Clover v. Allstate Ins. Co., 2008 WL 821961, at
*3 (E.D. La. Mar. 26, 2008). Like the court in Evans, the court in Clover denied the insurer’s
motion for summary judgment because there were disputed issues of fact regarding the cause of
the business interruption loss. Id. at *4. Again, there was no dispute that the property itself was
covered under the insurance policy.
In Zurich American, the insured—which provided janitorial, lighting and engineering
services throughout the World Trade Center (“WTC”) complex—sought business interruption
coverage for income derived from property that it “used” and “controlled”, such as freight
elevators, janitorial closets, and storage rooms. Zurich Am. Ins. Co. v. ABM Indus., Inc., 397 F.3d
158, 166 (2d Cir. 2005). The district court held that it could not recover under the business
interruption provision because “[t]he undisputed cause of the interruption here was the
destruction of the World Trade Center, which would have totally interrupted the ABM business
here in issue regardless of what happened to the freight elevators, loading docks, etc.” Id. at 167.
However, the Second Circuit found that since the destruction of the WTC and the properties

owned by ABM were simultaneous, the ruination of the WTC was the cause of ABM's business
interruption such that it could recover under the policy. Id.
Courtenay also involved a business interruption claim where the cause of the plaintiff’s
suspension of business was in question. Courtenay, Hunter & Fontana, LLP v. Massachusetts
Bay Ins. Co., 2008 WL 3876421, at *3 (E.D. La. Aug. 19, 2008). The defendant contended that
the plaintiff’s operations were suspended in accordance with the Civil Authorities and Utilities
sections of the insurance policy. Id. The plaintiff, on the other hand, sought recovery under the
business income section of the policy by “implicitly contending that it suspended its operations
due to property damage at the premises.” Id. The court noted that under the express terms of the

policy in that case, the cause of the suspension would determine whether coverage under the
business income section applied. Id. It explained “[t]he cause of the suspension is a question of
fact to be determined at trial, and if Plaintiff meets its burden of establishing that the suspension
was caused by direct physical loss to property resulting from a Covered Cause of Loss, then
coverage is triggered.” Id.
Unlike the above cases, there is no question that Lamar’s business interruption was
caused by a Covered Cause of Loss—Hurricane Maria. (SMF ¶ 6, Doc. 111-2; OSMF ¶ 6, Doc.
120-1.) Instead, the question before the Court is whether, under the terms of the Policy, lost
business income is only payable when operations are suspended simultaneously due to damage
to covered property and damage to excluded property.
Now, turning to the heart of the matter, it is undisputed that billboards are excluded from
Covered Property under the Policy. (Doc. 105-2 at ¶ 2; Doc. 118-1 at ¶ 2; Doc. 105-3 at 93.)
Based on this, Zurich argues that there is no coverage for any of Lamar’s lost business income

because the Policy requires that the loss be caused “solely,” “directly,” or “exclusively” from
damage to covered property. (Doc. 128 at 3.) However, the language in the Policy fails to
support Zurich's position. The Time Element coverage section states in relevant part as follows:
The Time Element loss must result from the necessary Suspension of the Insured's
business activities at an Insured Location. The Suspension must be due to direct
physical loss of or damage to Property (of the type insurable under this Policy
other than Finished Stock) caused by a Covered Cause of Loss at the Location, …

(Policy, Doc. 105-3 at 31 (emphasis added).)
Notably, the words “solely,” “directly,” and “exclusively” are absent from this provision.
Thus, to prevail on this argument, Zurich would have the Court read language into the contract
which does not appear in the Policy. As Lamar correctly contends, there is no requirement that
the business income loss or even the Suspension of business activities “directly”, “solely”, or
“exclusively” result from physical loss of or damage to Property of the type insured by the
Policy. Instead, the Policy only requires that the damage to property causing the interruption in
operations must be attributable to a Covered Cause of Loss.
Under a plain reading of the Policy, if Lamar can establish that it suspended operations
due to damage to Property (of the type insurable under this Policy…), including its office, that
resulted from a non-excluded peril, then coverage under the business interruption section is
triggered, even if business income may also have been lost because of damage to billboards.
Again, nothing in the Policy restricts business interruption coverage to situations where damage
must be related solely to Covered Property. Additionally, Zurich has not directed the Court to
any provision in the Policy that provides that if there is damage to both the office and the
billboards, then there is no coverage at all for Lamar's business income losses.
After a thorough reading of the Policy, the Court finds that the Policy is clear and
unambiguous on its face and can be enforced as written. As the Louisiana Supreme Court stated,

“the rules of construction do not authorize a perversion of the words or the exercise of inventive
powers to create an ambiguity where none exists.” Cadwallader v. Allstate Ins. Co., 2002-1637
(La. 06/27/03); 848 So. 2d 577, 580. Applying the established rules of construction, the Court
concludes that the argument set forth by Zurich is not a reasonable interpretation of the Policy.
As such, the Court is not required to consider extrinsic evidence in interpreting its
meaning. Lloyds of London v. Transcontinental Gas Pipe Line Corp., 101 F.3d 425 (5th Cir.
1996) (Only upon finding a term of the contract ambiguous will the court consider extrinsic
evidence in interpreting its meaning.); Liberty Mut. Ins. Co. v. Pine Bluff Sand & Gravel Co., 89
F.3d 243, 246 (5th Cir. 1996) (upon determination of ambiguity, extrinsic evidence may be

considered to determine contract's meaning). Nevertheless, even if the Court were to consider
extrinsic evidence, Stephens’ testimony, which Zurich heavily relies on, does not support its
position.
Zurich represents Stephens’ testimony to be that all of Lamar’s lost business income was
due “solely” to the damaged billboards. However, nowhere in the record does Stephens say this.
On the contrary, Stephens estimated that at least $663,000 of Lamar’s business income losses
were due to a suspension of business operations at its office resulting from physical damage to
the office. (Stephens Rep., Doc. 105-5 at 3.) In reaching this estimate, Stephens testified that he
took the total business income losses Lamar sustained due to all causes of loss and segregated
those losses attributable to a suspension of business operations at the office from those
attributable to damage to the billboards. (Stephens Rep., Doc. 105-5 at 3; Stephens Dep., Doc.
118-2 at 9–19.)
Thus, it is immaterial that Stephens testified: (1) “that the business interruption
calculations he prepared for Lamar included lost revenues from damaged billboards” and (2) that

he did not and could not calculate a business interruption loss without using loss of revenues
from its damaged billboards because he segregated them out. (Stephens Dep., Doc. 105-4 at 8,
9.) And again, there is nothing in the Policy that prohibits this.
Additionally, Zurich’s representative testified that he was not aware of any provision in
the Policy stating that if Lamar sustained damage to both its billboards and its office, then there
is no coverage at all for Lamar's business income losses. (Zurich Dep., Doc. 110-1 at 21–22.)
In sum, not only is Zurich’s interpretation of the Policy unreasonable, it has failed to
establish that “there is no reasonable interpretation of the policy, when applied to the undisputed
material facts shown by the evidence supporting the motion, under which coverage [for Lamar’s

business income losses] could be afforded.” Reynolds v. Select Properties, Ltd., 93-1480 (La.
4/11/94), 634 So. 2d 1180, 1183. Therefore, Zurich’s motion for partial summary judgment is
denied.
2. Lamar’s Motion for Partial Summary Judgment
The Court now turns to Lamar’s motion for partial summary judgment which turns on
whether Lamar has proven that “[Zurich] received satisfactory proof of loss… [and Zurich’s]
failure to pay was arbitrary and capricious.” Grilletta v. Lexington Ins. Co., 558 F.3d 359, 368–
69 (5th Cir. 2009).
Fully distilled, Lamar’s motion is predicated on a single conclusion: no jury could
reasonably construe the evidentiary record in such a manner as to find that Zurich was not
“arbitrary, capricious or without probable cause” when it failed to tender a payment for Lamar’s
business income loss. Here, however, if a jury were to believe Zurich's experts and disbelieve
that of Lamar, that jury could so conclude. True, a jury may not find Zurich's experts to be

credible; true, these experts' opinions may not prove persuasive, their cogency overwhelmed by
the weight of contrary testimony. But, just as true, the jury may find that Zurich's experts are
worthy of belief and that Lamar never provided Zurich with data sufficient to allow it to
determine the loss attributable to the covered property. Thus, at present, evidence for Zurich's
side of this argument, amounting to far more than a scintilla, can be assembled from the extant
record. “In these and similar cases, courts have again and again concluded that the dueling
theories of ostensibly credible experts create a triable issue of fact….” Lalumandier v. State
Farm Mut. Auto. Ins. Co., No. 13-426-JWD-RLB, 2016 WL 3211515, at *3 (M.D. La. Jan. 28,
2016) (deGravelles, J.) (collecting cases). Such issues must be resolved by a jury and not by any

court, for a “reasonable jury could [still] return a verdict for the nonmoving party,” Id. (quoting
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct. 2505, 2510, 91 L. Ed. 2d 202
(1986)). Lamar's bad faith claim is just such a contest.
a. Coverage
Preliminarily, the Court notes there are questions of fact as to whether Lamar met its
initial burden of establishing a prima facie showing it made a satisfactory proof of loss as to at
least a portion of its business interruption claim, i.e. that at least a portion of the claim is
undisputed.
The Policy at issue is an “all risk” policy, which creates “a special type of coverage that
extends to risks not usually covered under other insurance.” (SMF ¶ 1, Doc. 111-2; OSMF ¶ 1,
Doc. 120-1.) See Dow Chemical Co. v. Royal Indem. Co., 635 F.2d 379, 386 (5th Cir. 1981).
Under an “all-risk” policy, an insured need only prove direct physical loss to covered property.
Living Word Bible Church, Inc. v. Travelers Indem. Co., No. 07-7450, 2009 WL 2856127, at *2

(E.D. La. Sept. 1, 2009). Once an insured has proven a loss covered under the policy, the burden
shifts to the insurer to prove policy limits or exclusions. Tunstall v. Stierwald, 809 So.2d 916,
921 (La. 2002). This burden placed on the insurer is a heavy one since the policy must contain a
clear and unambiguous expression of exclusion from coverage. Auster Oil & Gas, Inc. v. Stream,
891 F.2d 570, 580 (5th Cir. 1990); Scarborough v. Northern Assurance Co. Of Am., 718 F.2d
130, 134 (5th Cir. 1983); Burlington Res., Inc. v. United Nat'l Ins. Co., 481 F. Supp. 2d 567, 571
(E.D. La. 2007).
It is largely undisputed that Zurich is liable for some loss of business income under the
Policy. Both parties agree that under the Policy: Lamar is the First Named Insured; the office

was an Insured Location; and Hurricane Maria was a Named Storm and a Covered Cause of
Loss. (SMF ¶¶ 4–6, Doc. 111-2; OSMF ¶¶ 4–6, Doc. 120-1.) Likewise, both parties agree that the
office was physically damaged by Hurricane Maria. (SMF ¶¶ 6–11; OSMF ¶¶ 6–11; Zurich Dep.,
Doc. 118-4 at 16.)
The parties dispute mainly centers on the amount of the business income loss. Under
Louisiana law, damages for loss of profits may not be based on speculation and conjecture. La
Louisiane Bakery Co. v. Lafayette Ins. Co., 09-825 (La. App. 5 Cir. 2/8/11), 61 So. 3d 17, 34.
However, as Louisiana courts have held, “such damages need be proven only within reasonable
certainty ... [b]road latitude is given in proving lost profits because this element of damages is
often difficult to prove and mathematical certainty or precision is not required.” Id. (citing Cox
Commc'ns v. Tommy Bowman Roofing, LLC, 04-1666, (La. App. 4 Cir. 3/15/06), 929 So. 2d 161,
166–67; Louisiana Farms v. Louisiana Depart't of Wildlife and Fisheries, 95–845, (La. App. 3
Cir. 10/9/96), 685 So. 2d 1086, 1105; Lavigne v. J. Hofert Co., 431 So. 2d 74, 77 (La. App. 1
Cir. 1983)). “Accordingly, where it is not possible to state or prove a perfect measure of lost

earnings, ‘courts have reasonable discretion to assess damages based upon all the facts and
circumstances of the case.’ ” Ochsner Clinic Found. v. Lexington Ins. Co., 226 F. Supp. 3d 658,
673–74 (E.D. La. 2017) (quoting Cotton Bros. Baking Co. v. Indus. Risk Insurers, 774 F. Supp.
1009, 1028 (W.D. La. 1989)). “Proof of such losses need only be as precise as circumstances in a
particular situation allow.” Id. at 674 (citing Citadel Broad. Corp. v. Axis U.S. Ins. Co., 2014-
0326 (La. App. 4 Cir. 2/11/15), 162 So.3d 470, 475). See also, Nick Farone Music Ministry v.
City of Bastrop, 179 So. 3d 629, 631 (La. App. 2015) (“Loss of business income or profits is a
type of special damages that must be proved with reasonable certainty.”); Bayle v. Allstate Ins.
Co., 615 F.3d 350, 361 (5th Cir. 2010) (“we could find no suggestion in Louisiana law that

insureds are ever relieved of the burden of proving damages.”).
Lamar argues that it has made a prima facie showing that Zurich is liable for at least $1 in
covered business income loss based on Lamar’s Rule 30(b)(6) testimony that it needed its Puerto
Rice office to generate revenue (Doc. 110-13 at 15, 18–19) and Stephens’ expert report which
estimated that Lamar lost at least $663,000 in business income because of damage to its office
caused by Hurricane Maria (Doc. 110-12 at 5).
However, Zurich disputes this and argues that there are genuine issues of material fact
precluding summary judgment based on: (1) Stephens’ testimony that he included losses
resulting from damage to billboards when calculating Lamar’s lost business income attributable
to its office; and (2) Mohlenhoff’s testimony that: (a) he does not accept Lamar’s methodology
for calculating its business income loss; (b) “[a]ll the revenue information provided [to him] was
revenues from billboards”; and (c) that he prepared “corrected claims” for the sole purpose of
mediation. (Doc. 120 at 6–9.)
Here, Stephens’ and Mohlenhoff’s disagreement as to how to calculate Lamar’s covered

business income loss creates a genuine issue of material fact precluding summary judgment. See
Evans v. Lafayette Ins. Co., No. 06-6783, 2007 WL 4545883, at *3 (E.D. La. Dec. 18, 2007)
(“The experts for opposing sides take different approaches to the business loss analysis. Disputed
issues of fact preclude the granting of summary judgment on this issue.”) Again, Stephens
testified that he segregated the total business income loss between those losses resulting from
damage to the office and those losses resulting from damage to billboards and concluded that
Lamar sustained at least $663,000 in lost business income as a result of a suspension of its
operations due to physical damage to the office. (Stephens Rep., Doc. 105-5 at 3; Stephens Dep.,
Doc. 118-2 at 9–19.) On the other hand, Mohlenhoff testified that both MDD and Zurich rejected

Lamar’s estimates because they include lost revenues from damaged billboards and are based on
an allocation of expenses between the office and billboards instead of revenues. (MDD Dep.,
Doc. 120-4 at 8–10.)
Mohlenhoff also testified that Lamar has not supported how the office generates revenue
and that his understanding of Lamar’s income generation was that “the revenue comes from the
billboard[s]…it comes from the panels that they rent.” (Mohlenhoff Dep., Doc. 120-5 at 5, 7–9;
see also id. at 12 (“the ultimate income comes from the billboard[s]”).)
Likewise, MDD testified that “[it] cannot attribute what amount of any loss is related to
the office or billboards or anything else.” (MDD Dep., Doc. 110-3 at 19; id. at 15–17; id. at 18,
19 (“we’ve never been provided all the documents we needed to prepare an estimate” and that
“all revenue information provided [to it] was revenues from billboards.”); id. at 21 (“They lost
revenues, but … that’s different than business suspension.”).)
Thus, while it is undisputed that Zurich is liable for some loss under the Policy, Lamar
has failed to establish what amount Zurich is liable for since Lamar has not provided Zurich and

its accountants with enough information to determine that amount. And although MDD testified
that it had enough information to prepare an estimate of at least $1 (see MDD Dep., Doc. 110-3
at 23), Zurich’s representative testified to the contrary:
Q. Is it Zurich's position today that Zurich does not owe Lamar a single penny
for any lost business income that Lamar sustained as a result of Hurricane
Maria?

A. No, that is not our position.

Q. Well, will Zurich acknowledge today that Lamar sustained at least $1 of lost
business income as a result of Hurricane Maria that is covered by Zurich's
policy?

Mr. King: Object to the form of the question.
A. No.

Q. Zurich will not acknowledge that?

A. That is correct.

Q. Zurich acknowledges that Lamar's Puerto Rico office was physically
damaged as a result of Hurricane Maria, correct?

A. Correct.

(Zurich Dep., Doc. 118-4 at 15–16.)
b. Bad Faith
Turning to Lamar’s bad faith claim, and construing the evidence in a light most favorable
to Zurich and drawing reasonable inferences in its favor (as required), the Court concludes that
there are fact questions as to whether and when Zurich received satisfactory proof of loss. Based
on the evidence, a reasonable juror could conclude that Zurich has not received satisfactory proof

of loss on Lamar’s business interruption claim. The best evidence of this is Zurich’s Rule
30(b)(6) testimony which shows that it needs more information to verify and valuate the claim
and, specifically, to determine which portion of the loss is attributable to damage to the office.
Again, Zurich’s representative testified:
Q. …What policy provision is Zurich relying on in this case to refuse payment
for Lamar's claim for lost business income? I want Zurich's position on that.

A. Well, again, it's -- it's my understanding that they have not refused to pay,
we just need more information to determine the correct amount to pay.…

Q. And so it is Zurich's position today that it still doesn't have enough
information to pay Lamar one penny for the business interruption loss
Lamar sustained as a result of Hurricane Maria, even though Zurich was
entitled to take discovery from Lamar in this case; is that correct?....

A. We need additional information, from my understanding of the file.

(Zurich Dep., Doc. 118-4 at 18–19, 20; id. at 14 (“Q. As of today, Zurich has never made any
offer whatsoever to Lamar to settle any of Lamar's claim for lost business income as a result of
Hurricane Maria, has it? A. No. My understanding is Zurich is still waiting on documentation to
support the claim.”).)
Mohlenhoff’s testimony also supports this. In March of 2020, Mohlenhoff testified that
he still doesn’t have enough information to estimate with reasonable certainty what amount of
business interruption loss was attributable to Lamar’s office. (Mohlenhoff Dep., Doc. 120-5 at
6.) He explained that he needed additional information:
A. As we’ve talked about, I need to understand the various documents and
what they represent. And there’s revenue streams that I don’t know what
they are. There’s revenues not assigned to a panel. I don’t know why not.
…I think it’s just a blank for some reason. I would like to know why.
Should it be, should it not be? Those are some questions I have….

… it's kind of a wide-ranging question. I'd like to walk through the
expenses, pre- and post-loss, understanding each one, what it is, what it
represents, is it related to a billboard, is it related to an office…. [If] it's
fixed? Is it variable?

(Mohlenhoff Dep., Doc. 120-5 at 6–7.)

He also testified that Lamar has not supported how its Puerto Rico office generates any
revenue and that his understanding of Lamar’s income generation was that “the revenue comes
from the billboard[s]…it comes from the panels that they rent.” (Mohlenhoff Dep., Doc. 120-5 at
7–9, 10; id. at 12 (Lamar has “totally different” revenue generation in that if the billboards are
there, “they’re getting revenue. If [they are] not, then they couldn’t charge revenue.”).)
Similarly, MDD’s testimony demonstrates that although Lamar “suffered a loss of
revenues,” MDD has not been able to determine the amount of the loss attributable to damage to
the office as it has “not been provided the documentations [it] needs to perform that final
calculation.” (MDD Dep., Doc. 120-4 at 16.) Specifically, MDD testified:
Q. Okay. Is it MDD’s opinion that MDD does not currently have enough
information to prepare any estimate of Lamar’s Business Interruption loss
attributable to damage to the Puerto Rico office and warehouse caused by
Hurricane Maria?

A. Yes.… We’ve never been provided all the documents we needed to
prepare an estimate…. We have general information, but I don’t have
enough to fully apply it to the pieces.

(MDD Dep., Doc. 120-4 at 18.)

Q. Does MDD currently have enough information to prepare any estimate of
Lamar’s Business Interruption loss that’s attributable to damage to the
Puerto Rico office?
A. Yes. I have information but I cannot attribute.

(MDD Dep., Doc. 110-3 at 23; id. at 21 (“They lost revenues, but … that’s different than
business suspension.”).) (See also, Doc. 120-4 at 15–17 (MDD testifying that it can’t opine
whether Lamar sustained any business interruption loss because of damage to its office because
it was “never provided enough information to fully understand the, the operations.”).)9
Thus, while Lamar argues that, based on Stephens’ report, it has provided satisfactory
proof of loss that at least $663,000 is owed under the Policy, Zurich has produced evidence from
which a reasonable juror could conclude that Zurich has not received satisfactory proof of loss
for Lamar’s business interruption claim.
Additionally, the Court finds Lamar’s contentions that Zurich could and did have
satisfactory proof of loss based on MDD’s preparation of a “corrected claim” to be unpersuasive.
Again, MDD testified that the “corrected claim” was actually Lamar’s July 2018 claim
presentation with numbers that reflect its own profit and loss statements. (MDD Dep., Doc. 110-

9 The Court notes that MDD contradicts itself in its deposition. MDD initially said that it did not have enough
information to prepare an estimate of Lamar’s business interruption loss attributable to its office; however, it later
testified as follows:

Q. Okay. Is it MDD's opinion that even with all the information provided in exhibit-24 to
MDD on March 19, 2019, MDD still does not have enough information to prepare any
estimate of Lamar's Business Interruption loss attributable to damage to the Puerto Rico
office and warehouse caused by Hurricane Maria?

A. All the revenue information provided was revenues from billboards.

Q. Okay, I'm going to ask you again. Is it MDD's opinion that even with all the information
provided to MDD in exhibit-24, MDD still does not have enough information to prepare
any estimate of Lamar's Business Interruption loss attributable to damage to Lamar's
Puerto Rico office and warehouse caused by Hurricane Maria?

A. No.

(MDD Dep., Doc. 120-4 at 19.) Despite MDD’s contradictory testimony, Zurich has produced sufficient evidence
that it did not and has not received enough information from Lamar to calculate its business interruption loss. It is up
to the jury to decide which parts of MDD’s testimony (if any) to believe. Anderson, 477 U.S. at 248. Lalumandier,
2016 WL 3211515, at *3.
3 at 18; Doc. 120-4 at 13–14.) MDD also testified that it disagreed with the allocation used in
Lamar’s July 2018 claim and explained that it would allocate the loss based on revenue by
looking at “the various sources of revenue that were achieved for this operation and where they
were from and apply what was related to billboard and what was related to the office.” (MDD
Dep., Doc. 120-4 at 8–10.) Moreover, MDD and Mohlenhoff both testified that they rejected

Lamar’s July 2018 estimate and the methods used to calculate it and that the “corrected claim”
was prepared solely for purposes of mediation. (MDD Dep., Doc. 120-4 at 11–12, 13–14;
Mohlenhoff Dep., Doc. 120-5 at 13–17, 18–20.) Therefore, at present, genuine issues of material
fact preclude summary judgment on Lamar’s bad faith claim. See Faith Prods., LLC v. St. Paul
Travelers Ins. Co., No. 07-4726, 2009 WL 2823654, at *5 (E.D. La. Aug. 27, 2009) (finding
summary judgment precluded based on genuine issue as to whether and when insurer received
satisfactory proof of loss); Wood v. Allstate Indem. Co., No. 15-2327, 2017 WL 217754, at *5
(W.D. La. Jan. 18, 2017).
Finally, to the extent that Lamar contends Zurich did not act reasonably, the Court

likewise finds that genuine issues of material fact preclude summary judgment. “An insurer's
conduct depends on the facts known to the insurer at the time of its action ....” La. Bag, 999 So.
2d at 1114. “When the insured claims penalties for refusal to pay a claim timely, the inquiry
usually focuses on whether the insurer acted reasonably in its adjustment of the claim based on
the facts known or that should have been known by the insurer. Normally, the reasonableness of
the insurer's claims handling will be a factual issue, and cases involving this issue will be fact
specific.” 15 William Shelby McKenzie & H. Alston Johnson, III, La. Civ. L. Treatise: Insurance
Law and Practice § 11:15 (4th ed. 2020). Summary judgment is rarely appropriate where
motivation and intent, in this case Zurich's reasons for delaying payment, are at issue. Goree v.
Lincoln Parish Detention Center Com'n, No. 09-745, 2010 WL 4295328, at *3 (W.D. La. Oct.
22, 2010) (citing Thornbrough v. Columbus and Greenville R. Co., 760 F.2d 633, 641 (5th Cir.
1985) (rev'd on other grounds)).
V. Conclusion
Accordingly,

IT IS ORDERED that the Motion for Partial Summary Judgment (Doc. 105) filed by
Defendant Zurich American Insurance Company is DENIED.
IT IS FURTHER ORDERED that the Motion for Partial Summary Judgment Regarding
Zurich’s Failure to Pay for Any of Lamar’s Lost Business Income (Doc. 111) filed by Plaintiff
Lamar Advertising Company is DENIED.
Signed in Baton Rouge, Louisiana, on March 29, 2021.

S
JUDGE JOHN W. deGRAVELLES
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10191796. Public record. Not legal advice.