The opinion
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
ROBERT J. NELTON CIVIL ACTION
VERSUS NO. 23-6066
FARMERS PROPERTY AND CASUALTY SECTION: “G”(4)
INSURANCE COMPANY, et al.
ORDER AND REASONS
Before the Court is Defendant Farmers Property and Casualty Insurance Company’s
(“Farmers”) Motion for Summary Judgment.1 This litigation involves property damage allegedly
caused by Hurricane Ida. Farmers seeks summary judgment in its favor, arguing that because it
paid Plaintiff Robert J. Nelton (“Plaintiff”) a total of $93,300.48 pursuant to the Appraisal Award
provision, Plaintiff cannot maintain claims for breach of contract and bad faith adjusting penalties.2
Considering the motion, the opposition, the reply memorandum, the record, and the applicable law
the Court grants the motion as to Plaintiff’s breach of contract claims and denies the motion as to
Plaintiff’s claim for bad faith adjusting penalties.
I. Background
Plaintiff owns immovable property located at 4401 Bayouside Drive, Chauvin, Louisiana
70344.3 Defendants Farmers Property and Casualty Insurance Company and Metropolitan
Property and Casualty Insurance Company (collectively, “Defendants”) issued a policy of
1 Rec. Doc. 21.
2 Id.
3 Rec. Doc. 1-2 at 2.
homeowners insurance to Plaintiff under policy number 1691508271 covering Plaintiff for
damages to the dwelling, other structures, and contents located on the property resulting from
perils, including hurricanes.4 On or about August 29, 2021, Hurricane Ida made landfall in
Louisiana, allegedly causing damages to the property.5 Plaintiff reported the loss to Defendants
and took steps to mitigate damages.6
On or about September 24, 2021, Defendants inspected the property and documented the
damages.7 The petition states that the inspection constituted satisfactory proof of loss.8 On or about
September 2, 2022, Plaintiff’s counsel sent Defendants a demand letter requesting the amount of
$250,120.15.9 On or about February 15, 2023, Plaintiff invoked the appraisal provisions of the
policy.10 On or about March 7, 2023, Defendants named the appraiser.11 According to the petition,
Plaintiff had not received the appraisal award when this litigation was filed.12 The petition states,
despite being provided with satisfactory proof of loss, Defendants failed to timely and adequately
4 Id.
5 Id.
6 Id.
7 Id. at 3.
8 Id.
9 Id.
10 Id.
11 Id.
12 Id.
tender payment to Plaintiff.13 Plaintiff alleges the failure of Defendants to pay the claim was
arbitrary, capricious, and/or without probable cause in violation of Louisiana law.14
On August 24, 2023, Plaintiff filed a petition against Defendants in the 32nd Judicial
District Court for the Parish of Terrebonne.15 Plaintiff brings claims for breach of insurance
contract, violations of Louisiana Revised Statute §§ 22:1892 and 22:1973, intentional and
negligent infliction of emotional distress, and negligent claims adjusting.16
On March 10, 2025, Farmers filed the instant motion.17 On April 8, 2025, Plaintiff filed an
opposition to the motion.18 On April 11, 2025, Farmers filed a reply memorandum in further
support of the motion.19
II. Parties’ Arguments
A. Farmers’ Arguments in Support of the Motion
Farmers seeks summary judgment in its favor, arguing it timely paid Plaintiff the appraisal
award for the contractual damages due under the policy, and thus, it did not breach the contract.20
Farmers explains Plaintiff first provided notice of the alleged loss following Hurricane Ida on or
about September 3, 2021.21 According to Farmers, it initiated loss adjustment and inspected the
13 Id.
14Id. at 4.
15 Rec. Doc. 1-2.
16 Id. at 4–8.
17 Rec. Doc. 21.
18 Rec. Doc. 24.
19 Rec. Doc. 17.
20 Rec. Doc. 21.
21 Id. at 2.
property on September 24, 2021, and on October 6, 2021, Farmers issued a timely payment totaling
$31,992.65.22
Farmers explains on October 12, 2021, Plaintiff contacted Farmers expressing
dissatisfaction with the insurance adjuster and the estimate.23 On October 22, 2021, Farmers
contends Plaintiff called and advised that additional damages were found and requested a
reinspection, to which Farmers explained the supplemental process and requested that Plaintiff
submit contractor bids/estimates and supplemental documentation.24 Between March 23, 2022 and
March 29, 2022, Farmers states that Plaintiff submitted several receipts and invoices confirming
replacement of and repairs to the property, and on April 5, 2021, Farmers issued supplemental
payment totaling $23,254.20.25
On September 19, 2022, Farmers states it received a demand letter and public adjuster
estimate from Plaintiff’s attorney totaling $250,120.15, which did not account for Plaintiff’s
deductible and payments previously made by Farmers.26 According to Farmers, Plaintiff’s counsel
invoked appraisal on February 15, 2023, and on April 6, 2023, an appraisal inspection was
performed.27 Farmers explains that the appraisal estimate totaled $100,816.47.28 After accounting
for Plaintiff’s $7,516 policy deductible and Farmers’ prior payments totaling $55,246.84, Farmers
22 Id.
23 Id.
24 Id. at 3.
25 Id.
26 Id. at 4.
27 Id.
28 Id.
contends the unpaid portion of the award totaled $38,053.63.29 Farmers states it issued a
supplemental payment to Plaintiff in this amount on August 23, 2023.30 Farmers avers that, in
compliance with the policy, it timely paid Plaintiff the amount awarded pursuant to the appraisal
award, and thus, no additional contractual damages can be sought.31 Farmers argues that because
it is not in breach of the insurance contract, Plaintiff’s claims for statutory penalties and attorney’s
fees should also be dismissed since there was no bad faith in handling Plaintiff’s alleged losses.32
B. Plaintiff’s Arguments in Opposition to the Motion
In opposition, Plaintiff explains that on September 24, 2021, Farmers conducted its first
inspection of the property, and on October 6, 2021, Farmers tendered initial payments in amounts
of $16,043.78 for Coverage A and $15,948.86 for Coverage B.33 Plaintiff contends he demanded
a reinspection immediately thereafter, but Farmers did not conduct the reinspection as requested.34
On September 2, 2022, Plaintiff contends his counsel submitted a demand letter to Farmers and
enclosed a repair estimate in the amount of $233,673.86 for Coverage A and $16,442.29 for
Coverage B, which was denied by Farmers on September 30, 2022.35 Plaintiff avers Farmers never
retained an engineer or otherwise attempted to determine causation, and this constitutes bad faith.36
29 Id.
30 Id.
31 Id. at 6.
32 Id. at 7.
33 Rec. Doc. 24 at 2.
34 Id. at 2–3.
35 Id. at 3.
36 Id.
According to Plaintiff, Farmers did not take any other action on the claim until Plaintiff
invoked the appraisal provision on February 15, 2023.37 Plaintiff alleges the appraisal award
tendered by Farmers was $38,000 short.38 Plaintiff contends there are questions of material fact in
dispute regarding Farmers’ refusal to pay the full value of Plaintiff’s claims that pre-date the
appraisal award.39 Plaintiff explains that Farmers’ duty under Louisiana law is to adjust and
investigate Plaintiff’s claims and this duty is not satisfied simply because Farmers requested
additional documentation.40 Plaintiff posits that Farmers had sufficient information to apprise the
full value of Plaintiff’s claim following the inspection on September 24, 2021, and on September
2, 2022, when Plaintiff’s counsel sent Farmers a demand letter including repair estimates.41
Plaintiff refutes the appraisal award, arguing it is missing damage allegedly caused by Hurricane
Ida, and the appraisal award excludes contents and recoverable depreciation.42 Plaintiff avers there
is a dispute of fact of whether the appraisers performed their duties required of them per the
policy.43
Plaintiff contends he has not yet completed depositions of Farmers’ corporate
representatives or experts.44 Plaintiff explains he wishes to depose Farmers’ desk field adjusters
37 Id. at 4.
38 Id.
39 Id.
40 Id. at 4–5.
41 Id. at 5.
42 Id. at 6.
43 Id. at 13.
44 Id. at 7.
involved with the claim, as well as the appraisers.45 Plaintiff requests that the Court defer
consideration of Farmers’ motion for summary judgment until Plaintiff has the benefit of
conducting depositions.46
Plaintiff contends Farmers cannot meet its burden of proving it properly adjusted Plaintiff’s
claim as a matter of law.47 Plaintiff asserts this Court should deny Farmers’ motion for summary
judgment.48
C. Farmers’ Arguments in Further Support of the Motion
In further support of the motion, Farmers contends Plaintiff fails to demonstrate which
facts would become available through discovery to warrant a deferral of the Court’s ruling on this
motion.49 Farmers avers there is no genuine issue of material fact in dispute.50 While Plaintiff
contends the appraisers did not perform their duties per the policy, Farmers avers Plaintiff fails to
demonstrate what duties were required by the policy that the appraisers failed to perform.51
Farmers explains that the contact states “if the appraisers submit a written report of an agreement
to us, the amount agreed upon amount will be the amount of the loss,” and the award became
45 Id. at 8.
46 Id.
47 Id. at 15.
48 Id. at 19.
49 Rec. Doc. 25 at 1.
50 Id. at 2.
51 Id. at 3.
binding when the appraisers mutually agreed on the appraisal award, regardless of Plaintiff’s
disagreement with the award.52
According to Farmers, it timely paid what was owed for the claim prior to the appraisal
award.53 Farmers contends it issued supplemental payments after receiving satisfactory proof of
loss.54 Farmers explains it did not reinspect the property because Plaintiff chose to go through the
supplemental claims process.55 Farmers avers it timely and appropriately adjusted Plaintiff’s claim
in good faith.56
Following the September 3, 2022 demand letter from Plaintiff’s counsel, Farmers
explained it reasonably disputed the amounts of damages and causation.57 While Plaintiff argues
that Farmers used requests for additional information as an attempt to avoid its duty of good faith,
Farmers contends this assertion is unfounded.58
Farmers argues it is not liable to Plaintiff under Louisiana Revised Statute §§ 22:1892 or
1973.59 Farmers contends the undisputed facts demonstrate that Farmers had reasonable grounds
52 Id. at 4.
53 Id. at 5.
54 Id.
55 Id.
56 Id.
57 Id.
58 Id.
59 Id. at 6.
to dispute making additional payments and to request more information.60 Farmers contends it did
not act in bad faith, rather there was a reasonable dispute with the customer.61
Farmers argues the appraisal award is evidence Farmers was correct in disputing the
amount of damages claimed by Plaintiff in the demand letter.62 Farmers points out that the
appraisal award was closer to the amount of damages Farmers initially estimated, $62,762.84.63
Farmers contends this supports its refusal to pay the damages claimed by Plaintiff in the amount
of $250,120.15.64 Farmers avers that Plaintiff’s dissatisfaction with the outcome of the appraisal
process does not create a triable issue, and the Court should grant the motion for summary
judgment.65
III. Legal Standard
Summary judgment is appropriate when the pleadings, discovery, and affidavits
demonstrate “no genuine dispute as to any material fact and the movant is entitled to judgment as
a matter of law.”66 To decide whether a genuine dispute as to any material fact exists, the court
considers “all of the evidence in the record but refrain[s] from making credibility determinations
or weighing the evidence.”67 All reasonable inferences are drawn in favor of the nonmoving
60 Id.
61 Id. at 7.
62 Id.
63 Id.
64 Id.
65 Id. at 9.
66 Fed. R. Civ. P. 56(a); see also Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994).
67 Delta & Pine Land Co. v. Nationwide Agribusiness Ins. Co., 530 F.3d 395, 398–99 (5th Cir. 2008)
(citing Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000)).
party.68 Yet “unsupported allegations or affidavits setting forth ‘ultimate or conclusory facts and
conclusions of law’ are insufficient to either support or defeat a motion for summary judgment.”69
If the entire record “could not lead a rational trier of fact to find for the non-moving party,” then
no genuine issue of fact exists and, consequently, the moving party is entitled to judgment as a
matter of law.70 The nonmoving party may not rest upon the pleadings.71 Instead, the nonmoving
party must identify specific facts in the record and articulate the precise manner in which that
evidence establishes a genuine issue for trial.72
The party seeking summary judgment always bears the initial responsibility of showing the
basis for its motion and identifying record evidence that demonstrates the absence of a genuine
issue of material fact.73 “To satisfy this burden, the movant may either (1) submit evidentiary
documents that negate the existence of some material element of the opponent’s claim or defense,
or (2) if the crucial issue is one on which the opponent will bear the ultimate burden of proof at
trial, demonstrate that the evidence in the record insufficiently supports an essential element of the
opponent’s claim or defense.”74 If the moving party satisfies its initial burden, the burden shifts to
the nonmoving party to “identify specific evidence in the record, and to articulate” precisely how
68 Turner v. Baylor Richardson Med. Ctr., 476 F.3d 337, 343 (5th Cir. 2007) (quoting Reeves, 530 U.S. at
150).
69 Galindo v. Precision Am. Corp., 754 F.2d 1212, 1216 (5th Cir. 1985); Little, 37 F.3d at 1075.
70 Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (quoting First Nat’l Bank of
Ariz. v. Cites Serv. Co., 391 U.S. 253, 289 (1968)).
71 Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986).
72 See id.; Ragas v. Tennessee Gas Pipeline Co., 136 F.3d 455, 458 (5th Cir. 1998).
73 Celotex Corp., 477 U.S. at 323.
74 Duplantis v. Shell Offshore, Inc., 948 F.2d 187, 190 (5th Cir. 1991) (internal citation omitted).
that evidence supports the nonmoving party’s claims.75 The nonmoving party must set forth
“specific facts showing the existence of a ‘genuine’ issue concerning every essential component
of its case.”76
The nonmovant’s burden of demonstrating a genuine issue of material fact is not satisfied
merely by creating “some metaphysical doubt as to the material facts,” “by conclusory allegations,
by unsubstantiated assertions, or by only a scintilla of evidence.”77 Moreover, the nonmoving party
may not rest upon mere allegations or denials in its pleadings.78
IV. Analysis
A. Outstanding Discovery
As an initial matter, Plaintiff argues that additional discovery is necessary to develop
material facts and this Court should deny the instant motion as premature. Federal Rule of Civil
Procedure 56 does not require that any discovery take place before summary judgment can be
granted; if a party cannot adequately defend such a motion, Federal Rule of Civil Procedure 56(d)
is his remedy.79 The Fifth Circuit has long recognized that a plaintiff’s entitlement to discovery
prior to a ruling on a motion for summary judgment is not unlimited, and may be cut off when the
75 Forsyth v. Barr, 19 F.3d 1527, 1537 (5th Cir. 1994), cert. denied, 513 U.S. 871 (1994); see also Morris
v. Covan World Wide Moving, Inc., 144 F.3d 377, 380 (5th Cir. 1998).
76 Morris, 144 F.3d at 380; see also Bellard v. Gautreaux, 675 F.3d 454, 460 (5th Cir. 2012).
77 Little, 37 F.3d at 1075 (internal citations and quotation marks omitted).
78 Morris, 144 F.3d at 380.
79 New America Shipbuilders, Inc. v. United States, 871 F.2d 1077, 1081 (Fed. Cir. 1989); Reflectone, Inc.
v. Farrand Optical Co., Inc., 862 F.2d 841, 843–44 (11th Cir. 1989); American Nurses Association v. State of
Illinois, 783 F.2d 716, 729 (7th Cir. 1986); Weir v. Anaconda Co., 773 F.2d 1073, 1081 (10th Cir. 1985); United
States of America, acting Through the Small Business Association v. Light, 766 F.2d 394, 397 (8th Cir. 1985).
Federal Rule of Civil Procedure 56(f) was recodified without substantial change in the 2010 amendments as Federal
Rule of Civil Procedure 56(d).
record shows that the requested discovery is not likely to produce the facts needed by the plaintiff
to withstand a motion for summary judgment.80
The protection afforded by Rule 56(d) is an alternative to a response in opposition to
summary judgment under Rule 56(e) and is designed to safeguard against a premature or
improvident grant of summary judgment.81 To obtain a Rule 56(d) continuance, the nonmovant
must present specific facts explaining his inability to make a substantive response as required by
Rule 56(e) and by specifically demonstrating “how postponement of a ruling on the motion will
enable him, by discovery or other means, to rebut the movant’s showing of the absence of a
genuine issue of fact.”82 The nonmovant may not simply rely on vague assertions that discovery
will produce needed, but unspecified, facts.83
Plaintiff here did not file an affidavit or declaration. The Fifth Circuit has observed that
“[w]hile a party’s failure to comply with Rule 56(d) procedure does not preclude consideration of
the motion, some equivalent statement, preferably in writing ... is to be expected.”84 Assuming,
that Plaintiff’s request for additional discovery in the opposition memorandum constituted a
request for a Rule 56(d) continuance, the Court finds that Rule 56(d) may not be invoked by the
mere assertion that discovery is incomplete; the opposing party must demonstrate “how the
80 Paul Kadair, Inc. v. Sony Corp. of America, 694 F.2d 1017, 1029–30 (5th Cir. 1983). See Fisher v.
Metropolitan Life Insurance Co., 895 F.2d 1073 (5th Cir. 1990) and Netto v. Amtrak, 863 F.2d 1210, 1216 (5th Cir.
1989).
81 10A Wright, Miller, and Kane, Federal Practice and Procedure § 2740 (1983).
82 Securities and Exchange Commission v. Spence & Green Chemical Co., 612 F.2d 896, 901 (5th
Cir.1980), cert. denied, 449 U.S. 1082, 101 S.Ct. 866, 66 L.Ed.2d 806 (1981) (quoting Willmar Poultry Co. v.
Morton–Norwich Products, Inc., 520 F.2d 289, 297 (8th Cir. 1975), cert. denied, 424 U.S. 915, 96 S.Ct. 1116, 47
L.Ed.2d 320 (1976)).
83 Gossett v. Du–Ra–Kel Corp., 569 F.2d 869, 873 (5th Cir. 1978).
84 Fontenot v. Upjohn Co., 780 F.2d 1190, 1194 (5th Cir. 1986).
additional time will enable him to rebut the movant’s allegations of no genuine issue of fact.”85
Plaintiff’s casual reference to the existence of outstanding discovery falls short of showing how
additional time would enable it to meet its burden in opposing summary judgment. As such, the
Court rejects Plaintiff’s argument and will consider Farmers’ motion on the merits.
B. Plaintiff’s Contractual Claims
Farmers argues the contractual damages under the insurance policy at issue are set at
$100,816.47 based on the August 8, 2023 Appraisal Award, which was timely paid by Farmers on
August 23, 2023, and thus, no additional contractual damages can be sought. In opposition,
Plaintiff argues that the appraisal award was improper, payment was insufficient under the
contract, and the delay in payment constitutes a breach of the contract.
“Under Louisiana law, ‘[a]n insurance policy is a contract between the parties and should
be construed by using the general rules of interpretation of contracts set forth in the Louisiana Civil
Code.’”86 “Interpretation of a contract is the determination of the common intent of the parties.”87
“When the words of a contract are clear and explicit and lead to no absurd consequences, no further
interpretation may be made in search of the parties’ intent.”88 “Courts lack the authority to alter
85 Weir v. Anaconda Co., 773 F.2d 1073, 1083 (10th Cir. 1985) (quoting Patty Precision v. Brown &
Sharpe Mfr. Co., 742 F.2d 1260, 1264 (10th Cir. 1984)). In Pasternak v. Lear Petroleum Exploration, Inc., 790 F.2d
828, 833 (10th Cir. 1986).
86 In re Katrina Canal Breaches Litig., 495 F.3d 191, 206 (5th Cir. 2007) (quoting Cadwallader v. Allstate
Ins. Co., 848 So. 2d 577, 580 (La. 2003)).
87 La. Civ. Code art. 2045.
88 Id.
the terms of insurance contracts under the guise of contractual interpretation when the policy’s
provisions are couched in unambiguous terms.”89
The insurance policy’s “Appraisal” provision provides:
If you and we fail to agree on the amount of the loss, either you or we can make a
written demand for an appraisal of the loss. Each party will select a competent
appraiser and notify the other within 20 days of the appraiser’s identity. The two
appraisers will select a competent and impartial umpire. If the two appraisers are
unable to select an umpire within 15 days, you or we can request that the choice of
an umpire be made by a judge or court of record in the state where the residence
premises is located.
The appraisers will separately set the amount of loss determining the full
replacement cost and actual cash value for each item as needed. If the appraisers
submit a written report of an agreement to us, the amount agreed upon will the
amount of the loss. If they fail to agree, they will submit their differences to the
umpire. The written award by two of these three people for any item will set the
amount of loss and is binding on you and us when filed with us.
You will pay the appraiser selected by you. We will pay the appraiser selected by
us. You and we will split the other expenses of appraisal and the fee of the umpire.90
Contractually specified appraisal awards are presumed accurate.91 Further, as the policy
explicitly states that “[t]he written award by two of these three people for any item will set the
amount of loss and is binding on you and us when filed with us.” The burden of demonstrating
that the award should not be confirmed must fall upon the party challenging it.92
89 Cadwallader, 848 So. 2d at 580.
90 Rec. Doc. 21-3 at 32.
91 See In re Waters, 93 F.2d 196, 200 (5th Cir.1937) (surveying cases from numerous jurisdictions to
determine that “every reasonable intendment and presumption is in favor of an award of appraisers selected to
determine the value of property lost”).
92 See La. Civ. Code arts. 1983, 2045–46; St. Charles Parish Hosp. Serv. Dist. No. 1 v. United Fire & Cas.
Co., 681 F. Supp. 2d 748, 754 (E.D. La. Jan. 10, 2010).
First, Plaintiff argues the appraisal award is invalid because Plaintiff’s selected appraiser
did not sign the appraisal award. However, a review of the record indicates the Appraisal Award
was signed by two appraisers, Bobby Foote and Tim May.93 Plaintiff further argues contents were
not included in the Appraisal Award, however, a review of the Appraisal Award indicates that the
amount of $4,200 was awarded for the actual cash value for “Contents.”94 As stated above, the
appraisal provision provides that “[t]he written award by two of these three people for any item
will set the amount of loss and is binding on you and us when filed with us.” Plaintiff has not
provided any evidence disputing the agreed upon Appraisal Award amount. Reasonable
differences in opinion are not sufficient to overturn a binding appraisal award.95 It is undisputed
that Plaintiff received a total of $93,300.48, minus the $7,516 deductible, in accordance with the
Appraisal Award amount of $100,816.47. The Appraisal Award is binding on the parties. For these
reasons, the Court grants summary judgment in Farmers’ favor as to Plaintiff’s breach of contract
claim.
B. Plaintiff’s Bad Faith Claims
Farmers seeks summary judgment dismissing Plaintiff’s bad faith claims pursuant to
Louisiana Revised Statute §§ 22:1892 and 22:1973. Section 1892 is titled “Payment and
adjustment of claims, policies other than life and health and accident; personal vehicle damage
claims; extension of time to respond to claims during emergency or disaster; penalties; arson-
related claim suspension.” That section provides in relevant part:
93 Rec. Doc. 24-9.
94 Id.
95 See Island Concepts, LLC v. Certain Underwriters at Lloyd’s, London, 2014 WL 5524379 (E.D. La. Oct.
31, 2024).
All insurers issuing any type of contract ... shall pay the amount of any claim due
any insured within thirty days after receipt of satisfactory proofs of loss from the
insured or any party in interest. . . . Except in the case of catastrophic loss, the
insurer shall initiate loss adjustment of a property damage claim within thirty days
after notification of loss by the claimant. . . . All insurers shall make a written offer
to settle any property damage claim, including third-party claim, within thirty days
after receipt of satisfactory proof of loss of that claim. . . . [F]ailure to make such
payment within thirty days after receipt of such satisfactory written proofs and
demand therefor or failure to make a written offer to settle any property damage
claim, including a third-party claim, within thirty days after receipt of satisfactory
proofs of loss of that claim . . . when such failure is found to be arbitrary, capricious,
or without probable cause, shall subject the insurer to a penalty, in addition to the
amount of the loss. . . .96
Section 1973 is entitled “Good faith duty; claims settlement practices; causes of action;
penalties.” It provides, in relevant part:
An insurer . . . owes to his insured a duty of good faith and fair dealing. The insurer
has an affirmative duty to adjust claims fairly and promptly and to make a
reasonable effort to settle claims with the insured or the claimant, or both. Any
insurer who breaches these duties shall be liable for any damages sustained as a
result of the breach. . . . Any one of the following acts, if knowingly committed or
performed by an insurer, constitutes a breach of the insurer's duties imposed in
Subsection A of this Section:
. . .
(5) Failing to pay the amount of any claim due any person insured by the contract
within sixty days after receipt of satisfactory proof of loss from the claimant when
such failure is arbitrary, capricious, or without probable cause.
(6) Failing to pay claims pursuant to R.S. 22:1893 when such failure is arbitrary,
capricious, or without probable cause.97
“One who claims entitlement to penalties and attorney fees [under these statutes] has the
burden of proving the insurer . . . was arbitrary, capricious, or without probable case.”98 The
plaintiff must show that the insurer willfully refused to pay, and this refusal was not based on a
96 Louisiana Revised Statute § 22:1892.
97 Louisiana Revised Statute § 22:1973.
98 Reed v. State Farm Mut. Auto. Ins. Co., 2003–0107 (La.10/21/03); 857 So.2d 1012, 1020.
good-faith defense.99 If there is a reasonable and legitimate dispute regarding the extent of the
insurance claim, the court should not infer bad faith from an insurer’s failure to pay within the
time limits provided by statute.100
Farmers argues Plaintiff’s claims for bad faith penalties should be dismissed because it
timely paid Plaintiff pursuant to the appraisal award.101 Plaintiff contends there are questions of
material fact in dispute regarding Farmers’ refusal to pay the full value of Plaintiff’s claims that
pre-date the appraisal award.102 Having carefully considered the law and facts in the record, the
Court finds that there are genuine issues of material fact in dispute, which preclude summary
judgment. “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.”103 For these reasons, it would be inappropriate to grant summary judgment on these
issues. Accordingly,
99 Reed, 857 So.2d at 1021.
100 Id.
101 Id.
102 Id.
103 15 William Shelby McKenzie & H. Alston Johnson, III, La. Civ. L. Treatise: Insurance Law and Practice
§ 11:15 (4th ed. 2020); see also 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)).
IT HEREBY ORDERED that Farmers’ Motion for Summary Judgment is GRANTED
IN PART and DENIED IN PART. The motion is GRANTED as to the claim for breach of
contract. The motion is DENIED as to the claim for bad faith adjusting penalties.
NEW ORLEANS, LOUISIANA, this 22nc_ day of August, 2025.
Ne nag hed Grown
UNITED STATES DISTRICT JUDGE