NEW ORLEANS, Jan. 28 – A Federal Judge in New Orleans has dismissed a statutory bad faith suit against an insurer arising out of a hailstorm property damage claim, finding that the insured failed to establish any genuine issue that the insurer acted arbitrarily or capriciously in the handling of the claim. In Dubois v. Southern Fidelity Ins. Co., Judge Ivan Lemelle granted Southern Fidelity’s motion for partial summary judgment, dismissing the insured’s claim for statutory penalties.
In granting the motion, Judge Lemelle, found the insurer’s failure to pay the hailstorm property damage claim arose out of a genuine dispute about the cause, nature, and extent of the property damage. The Court went on to note that the insured’s initial claims were both filed after some delay, and were initially unclear, making reference to both damage caused by the hailstorm, but also Hurricane Isaac. This, and the plaintiff’s failure to properly identify any facts tending to prove bad faith on the part of the insurer, warranted dismissal of such claims under F.R.C.P. 56, the Court held.
Editor’s Note: This opinion contains a concise review of Louisiana law regarding insurer bad faith, including review of the applicable statutes, and the bad faith standard of arbitrariness and capriciousness. The ruling also demonstrates that while the precise language of the bad faith standard may differ from state to state, in large measure they all articulate the same standard, i.e., the lack of a reasonable basis on the part of the insured in handling the claim.