BANKERS INSURANCE COMPANY

CIVIL DISTRICT COURT FOR THE PARISH OF ORLEANS

 

STATE OF LOUISIANA

 

  1. DIV.

PHILIP WHITE III

 

VERSUS

 

BANKERS INSURANCE COMPANY

 

 

FILED:______________________                                                  ________________________

                                                                                                            DEPUTY CLERK

 

 

PETITION FOR DAMAGES AND JURY DEMAND

 

            NOW INTO COURT, through undersigned counsel, comes Plaintiff, Philip White III (hereinafter “Plaintiff”), and files its Petition for Damages against Defendant, Bankers Insurance Company (hereinafter “Defendant”), respectfully averring as follows:

 

  1. PARTIES
  2. Made Plaintiff herein is PHILIP WHITE III, an INDIVIDUAL resident of the parish of Orleans, Louisiana.
  3. Made Defendant herein is BANKERS INSURANCE COMPANY, a foreign insurer domiciled in the United Kingdom who is authorized to do and is doing business in the State of Louisiana and Parish of Orleans, which may be served through its Registered Agent for Service of Process, the Louisiana Secretary of State, 8585 Archives Avenue, Baton Rouge, Louisiana.

 

  1. JURISDICTION AND VENUE
  2. Jurisdiction is proper in this Honorable Court pursuant to Louisiana Code of Civil Procedure, Article 2.
  3. Venue is proper in this Honorable Court pursuant to Louisiana Code of Civil Procedure Article 76.

 

III. RELEVANT FACTS

  1. Plaintiff is the rightful owner of a property situated at 56 Pratt Drive, New Orleans, LA 70122 (referred to as the “Property”). He secured a policy of insurance, numbered 17-0016801815-8-01 (known as the “Policy”), from Defendant. This Policy provided comprehensive coverage for the Property, safeguarding it against a range of perils, including hurricanes. The Policy offered the following coverage amounts:

– Building: $231,000.00

– Other Structures: $15,141.81

  1. During the events surrounding August 29, 2021, Hurricane Ida inflicted significant damage upon Plaintiff’s Property. Swiftly, Plaintiff reported these losses to Defendant, who assigned claim number 21-4351 (the “Claim”) to the situation.
  2. Around September 24, 2021, Defendant conducted an assessment of the Property, meticulously recording the damage sustained by the building and other structures. However, this assessment significantly undervalued and excessively depreciated the damages to the Property. The evaluation estimated the damage to the dwelling at $48,421.17 in actual cash value and $5,175.16 for other structures. This inspection, considered as satisfactory proof of loss, aligns with Louisiana’s relevant bad faith statutes (La. R.S. 22:1892 and 22:1973).
  3. Despite this accepted proof of loss, Defendant did not make any payments to Plaintiff within the stipulated thirty-day period, which ended by October 24, 2021. This delay in payment contravenes the mandates of Louisiana Revised Statute 22:1892.
  4. Around October 10, 2021, Plaintiff furnished Defendant with a comprehensive estimate from Galmon International, complemented by photographic evidence, highlighting damages exceeding $200,000.00 to the dwelling and other structures, surpassing the policy limit. The submission of this estimate and substantiating documentation stands as another form of satisfactory proof of loss, consistent with Louisiana’s relevant bad faith statutes.
  5. On November 22, 2021, Defendant corresponded with Plaintiff, notifying him of a payment amounting to $43,801.17 for building coverage and $5,175.16 for other structures coverage. This correspondence can be found in Exhibit 2, the Atlantic Casualty Insurance Letter, dated January 3, 2022.
  6. Subsequently, on November 23, 2021, the substantial undervaluation of damages prompted Plaintiff to engage legal representation in his pursuit of compensation from Defendant.
  7. By December 27, 2021, undersigned legal counsel acting on behalf of Plaintiff formally demanded redress via email, including the Galmon International estimate, to Defendant’ adjuster overseeing the claim. This formal demand, together with the attached estimate, serves as an additional instance of satisfactory proof of loss under Louisiana’s relevant bad faith statutes.
  8. In light of Defendant’s persistent failure to accurately assess and adequately remunerate Plaintiff for his losses in accordance with the Policy, Plaintiff, represented by undersigned counsel, invoked the Policy’s appraisal provisions on January 28, 2022. This action aimed to resolve the ongoing dispute surrounding the claim.
  9. By May 21, 2022, an appraisal award was issued, outlining the damages to the dwelling and other structures as follows:

– Dwelling: Replacement Cost Value = $218,666.54; Actual Cash Value =             $205,358.60

– Other Structures: Replacement Cost Value = $15,341.81; Actual Cash Value       = $13,265.07

  1. This award, detailed in Exhibits 3 and 4, underscores the extent of the damages Plaintiff sustained.
  2. Around June 10, 2022, Defendant made supplementary payments amounting to $156,937.43 for Coverage A, and $8,089.91 for Coverage B. However, Defendant arbitrarily withheld $4,620.00 of the actual cash value of the dwelling.
  3. It is crucial to highlight that Defendant had an adjuster inspect the Property on September 24, 2021, yet failed to effectuate payments to Plaintiff within the legally required thirty-day window, as mandated by Louisiana Revised Statute 22:1892(A). This lapse renders Defendant liable for a 50% penalty, in addition to attorney’s fees and costs, as stipulated by Louisiana Revised Statutes 22:1892 and 22:1973.

 

 

III.   CAUSES OF ACTION

  1. Breach of the Insurance Contract
  2. Plaintiffs realleges and re-avers the allegations contained in Paragraphs 1-17, above, as if restated herein.
  3. Defendant, Bankers Insurance Company, is a duly authorized entity engaged in the insurance business within the state of Louisiana. By virtue of the insurance policy, Policy Number 17-0016801815-8-01, Defendant undertook the responsibility of providing insurance coverage for the Property against various perils, including hurricanes.
  4. In late August 2021, Hurricane Ida struck, inflicting substantial damage upon the Property. Swiftly, Plaintiff reported the damages to Defendant, initiating the claims process by supplying all necessary supporting documents and information.
  5. The insurance contract in question embodies a legally binding agreement wherein Defendant commits to extending coverage for damages sustained by the insured property owing to specified perils. The contract delineates the scope of coverage, establishes the obligations incumbent upon both contracting parties, and outlines the conditions under which compensation would be disbursed.
  6. As stipulated by the contract, Defendant is duty-bound to accurately assess the extent of damages, expedite the payment of compensation, and conform to the terms and clauses enunciated within the policy.
  7. On or about September 24, 2021, Defendant conducted an inspection of the Property, cataloging the damages sustained. Regrettably, this inspection culminated in a valuation that grossly underestimated the actual extent of the damages. This undervaluation demonstrates a clear departure from Defendant’s obligation to accurately assess Plaintiff’s losses.
  8. Plaintiff, in adherence to both the insurance contract’s stipulations and Louisiana’s bad faith statutes (La. R.S. 22:1892 and 22:1973), promptly furnished satisfactory proof of loss. This proof, including detailed estimates and comprehensive documentation depicting the magnitude of the damages, was proffered to facilitate the assessment of the claim’s validity.
  9. Defendant’s subsequent failure to process the claim within the prescribed thirty-day period or by the deadline of October 24, 2021, as mandated by Louisiana Revised Statute 22:1892(A), constitutes a direct violation of the contractual requirement to expeditiously provide due compensation for the damages sustained.
  10. Plaintiff, as an immediate and direct consequence of Defendant’s breach of contract, has incurred substantial financial losses and accompanying damages.
  11. Defendant’s inability to effectuate timely and equitable compensation, as defined by the insurance contract, has left Plaintiff grappling with severe financial stress. This failure directly contravenes the very purpose of the contract, which is to mitigate financial risk in times of adversity.
  12. In addition to the tangible financial losses, Plaintiff has endured undue emotional distress attributable to Defendant’s neglect of its contractual duties. The resulting turmoil has compounded an already challenging situation, further amplifying the detrimental impact of the breach.
  13. Plaintiff’s primary objective in pursuing this cause of action is to secure just and appropriate remedies that rectify the damages and distress stemming from Defendant’s breach.
  14. Plaintiff seeks compensatory damages that accurately reflect the full extent of financial losses incurred due to Defendant’s breach of contract. This compensation should encompass both the substantiated damages sustained and the consequential harm resulting from the breach.
  15. Pursuant to the mandates of Louisiana Revised Statutes 22:1892 and 22:1973, Plaintiff asserts its right to receive statutory penalties and attorney’s fees as redress for Defendant’s violation of both its contractual duties and legal obligations.
  16. Plaintiff also petitions the Court to grant costs of court associated with pursuing this legal action, ensuring that the financial burden of seeking justice does not fall upon the aggrieved party.

 

  1. Breach of Implied Duty of Good Faith and Fair Dealing Under La. R.S. §§ 22: 1973
  2. Plaintiffs realleges and re-avers the allegations contained in Paragraphs 1-32, above, as if restated herein.
  3. At the core of this cause of action lies Defendant’s breach of the duty of good faith and fair dealing mandated by Louisiana Revised Statutes §§ 22:1973(A). This legal provision establishes a fundamental principle in insurance contracts: that the insurer, including foreign and surplus line insurers, owes an insured party the fiduciary duty of good faith and fair dealing. This affirmative duty entails, among other things, the obligation to adjust claims with honesty, fairness, and promptness, and to exert reasonable efforts in settling claims.
  4. Defendant failed to meet this duty by engaging in conduct that exhibited a lack of good faith and fairness. The breach of this duty has resulted in material harm to the Plaintiff, depriving him of the benefits that should rightfully have been afforded under the terms of the insurance contract.
  5. Defendant misrepresented pertinent facts and policy provisions related to the coverages at issue. By misrepresenting critical information, Defendant undermined the transparency and honesty that are integral to the duty of good faith and fair dealing.
  6. Defendant failed to fulfill its obligation to pay a settlement within thirty days after an agreement was reduced to writing. This failure not only reflects a disregard for the promptness that the duty demands but also demonstrates a lack of respect for the insured’s reasonable expectations.
  7. Defendant denied coverage and attempted to settle a claim based on an altered application without providing notice, knowledge, or consent to the insured. This action not only misrepresents the insured’s intentions but also contradicts the spirit of fair dealing.
  8. Defendant misled a claimant (Plaintiff) as to the applicable prescriptive period. By doing so, Defendant added confusion and complexity to an already challenging situation, undermining the insured’s ability to make informed decisions.
  9. Defendant’s failure to pay the amount of a claim due within sixty days after receiving satisfactory proof of loss, especially when such failure is deemed arbitrary, capricious, or lacking probable cause, constitutes a breach of the duty of good faith and fair dealing.
  10. Plaintiff contends that Defendant failed to pay claims pursuant to R.S. 22:1973 in a manner consistent with the duty of good faith and fair dealing, thereby breaching its obligations under the statute.
  11. As a result of Defendant’s actions and breaches, Plaintiff has suffered substantial damages. In accordance with Louisiana Revised Statutes §§ 22:1973(C), Plaintiff seeks the imposition of penalties against Defendant. These penalties, if granted, should not exceed two times the damages sustained or five thousand dollars, whichever amount is greater. Importantly, these penalties should not be utilized by Defendant in calculating its past or prospective loss experience for the purpose of setting rates or making rate filings.

 

  1. Violation of LA Rev Stat § 22:1892 (2016) – Breach of Prompt Payment Obligations
  2. Plaintiffs realleges and re-avers the allegations contained in Paragraphs 1-42, above, as if restated herein.
  3. Under Paragraph (A)(1) of LA Rev Stat § 22:1892, all insurers issuing various types of contracts, except those specified in R.S. 22:1811, 1821, and Chapter 10 of Title 23 of the Louisiana Revised Statutes of 1950, are mandated to pay the amount of any claim due to an insured within thirty days after receipt of satisfactory proofs of loss.
  4. In the case at hand, Plaintiff’s Property suffered significant damage due to Hurricane Ida, compelling Plaintiff to swiftly report these losses to Defendant. Defendant, in turn, assigned a claim number (21-4351) to the situation, marking the commencement of the claims process.
  5. Despite Plaintiff’s diligent efforts in providing satisfactory proofs of loss, Defendant failed to fulfill its statutory obligation. An assessment of the Property’s damage was conducted around September 24, 2021, wherein the damages sustained by the building and other structures were meticulously recorded. However, this assessment significantly undervalued and excessively depreciated the damages, which directly contradicted the comprehensive coverage promised by the insurance policy.
  6. The evaluation estimated the damage to the dwelling at a mere $48,421.17 in actual cash value, and $5,175.16 for other structures. This assessment, although deemed satisfactory proof of loss under Louisiana’s relevant bad faith statutes (La. R.S. 22:1892 and 22:1973), fell egregiously short of compensating Plaintiff for the actual extent of the damages.
  7. Defendant’s breach of prompt payment obligations extended beyond the initial assessment. Despite accepting the assessment as satisfactory proof of loss, Defendant failed to make any payments to Plaintiff within the stipulated thirty-day period, which ended by October 24, 2021. This delay in payment directly contravened the mandates of Louisiana Revised Statute 22:1892, further exacerbating the financial strain and uncertainty faced by Plaintiff.
  8. It was not until Plaintiff, determined to rectify the unjust delays, furnished Defendant with a comprehensive estimate from Galmon International, substantiated by photographic evidence, highlighting damages exceeding $200,000.00 to the dwelling and other structures. This estimate, submitted around October 10, 2021, surpassed the policy limit and stood as another form of satisfactory proof of loss, in line with Louisiana’s relevant bad faith statutes.
  9. In the jurisdiction of Louisiana, it is established that an insurance company’s internal inspection serves as a recognized form of satisfactory proof of loss, aligning with the legal interpretation of the term in conjunction with the statutes La. R.S. 22:1892 and 22:1973. This precedent underscores the significance of an insurer’s assessment in demonstrating evidence of damage and loss, thereby fulfilling the requirement for substantiating claims under the relevant regulatory framework.
  10. The gravity of Defendant’s breach of prompt payment obligations escalated when, on November 22, 2021, Defendant corresponded with Plaintiff, notifying him of a payment amounting to $43,801.17 for building coverage and $5,175.16 for other structures coverage. This correspondence, a letter from Atlantic Casualty Insurance dated January 3, 2022, exemplified Defendant’s continued disregard for the prompt payment obligations stipulated by law.
  11. The substantial undervaluation of damages and Defendant’s persistent failure to accurately assess and adequately remunerate Plaintiff prompted the engagement of legal representation on November 23, 2021, to advocate for just compensation.
  12. By December 27, 2021, legal counsel, acting on behalf of Plaintiff, formally demanded redress via email, presenting the Galmon International estimate as an additional instance of satisfactory proof of loss under Louisiana’s relevant bad faith statutes.
  13. Plaintiff, represented by undersigned counsel, invoked the Policy’s appraisal provisions on January 28, 2022. This action aimed to resolve the ongoing dispute surrounding the claim. Subsequently, an appraisal award was issued by May 21, 2022, detailing damages to the dwelling and other structures, thereby underscoring the extent of the losses Plaintiff had sustained.
  14. Despite this progress, Defendant’s actions remained contentious. Around June 10, 2022, Defendant made supplementary payments for Coverage A and Coverage B, but arbitrarily withheld $4,620.00 of the actual cash value of the dwelling, further delaying full and just compensation.
  15. Plaintiff asserts that Defendant’s actions violated the explicit provisions of LA Rev Stat § 22:1892. Defendant’s failure to promptly initiate loss adjustment, unreasonably delay payments, and undervalue damages directly contradicted the statutory obligations aimed at ensuring fair and expedient compensation for insured parties. This breach of prompt payment obligations resulted in significant financial harm and emotional distress to Plaintiff.
  16. Pursuant to Paragraph (B)(1) of the statute, Defendant’s arbitrary and capricious conduct renders it liable for penalties beyond the amount of the loss suffered by Plaintiff. Plaintiff seeks remedies and damages as prescribed by the statute, including fifty percent damages on the amount found to be due, reasonable attorney fees, and costs.
  17. Plaintiff requests the Court to adjudicate Defendant’s breach of prompt payment obligations, impose penalties and damages as prescribed by the statute, award reasonable attorney fees and costs, and provide equitable relief and compensation for the financial and emotional distress endured as a result of Defendant’s actions.

 

  1. DAMAGES
  2. As a result of Defendant’s acts and omissions, Plaintiff is entitled to the following damages:
  3. Penalties for Underpayment.

 

  • R.S. 22:1892 (50% of all monies not paid within 30 days of date of initial inspection) = $102,679.30; or
  • R.S. 22:1973 (100% of all monies not paid within 60 days of date of initial inspection) = $205,358.60.
  1. Extracontractual Damages.

Plaintiff is seeking general damages for mental anguish in the amount of $50,000.00 which is the amount consistently awarded on a per named insured basis by Louisiana courts in connection with Hurricanes Laura, Delta, and Ida.

  1. ACV Underpayment

As previously stated, Defendant underpaid the ACV amount of the dwelling damages pursuant to the appraisal award by $4,620.00.

  1. Recoverable Depreciation

Although admittedly not owed until incurred, there is $15,341.81 in depreciation available on this claim. If we are to reach a final resolution of this matter, this amount should be considered in the total exposure of Bankers in connection with the potential litigation of this matter.

  1. Attorneys’ Fees.

Attorneys’ fees are 40% of all monies recovered after initiation of representation. Louisiana courts have consistently awarded attorneys’ fees in the amount of 40%.

  • R.S. 22:1892 Bad Faith Penalty:
ACV Underpayment $161,557.43 (Cov. A) + $8,089.91 (Cov. B) = $169,647.34 total
50% penalty on total underpayment after 30 days from Date of Initial Inspection $102,679.30
Recoverable Depreciation $15,341.81
General Damages (Mental Anguish) $50,000.00
Subtotal $383,085.76
Subtotal + Attorney’s Fees (40%) $536,320.06
  • R.S. 22:1973 Bad Faith Penalty:
ACV Underpayment $208,973.63
100% penalty on underpayment after 60 days from Date of Inspection $248,224.26
Recoverable Depreciation N/A
General Damages $50,000.00
Subtotal $507,197.89
Subtotal + Attorney’s Fees (40%) $710,077.05
  1. Past and Future Additional Living Expenses and/or Loss of Use

In regards to past additional living expenses and/or loss of use, Mr. White suffered damages in the form of evacuation expenses, including but not limited to gas, groceries, food, and other necessities.

As to the subject of future additional living expenses and/or loss of use, it is reasonable to presume that Mr. White has or will incur expenses related to the restoration of the subject property.

  1. Costs and Interest

Costs and Interest will be determined at a later date.

 

JURY DEMAND

  1. Plaintiff requests a trial by jury.

 

WHEREFORE, Philip White III, prays that, Defendant, Bankers Insurance Company, be served with a copy of this Petition and be duly cited to appear and answer the allegations contained therein, and that after expiration of all legal delays and proper legal proceedings, there be a judgment entered in favor of Plaintiff, Philip White III and against Defendant, Bankers Insurance Company, in an amount that will fully and fairly compensate Plaintiff pursuant to the evidence and in accordance with the law, all sums with legal interest thereon, from the date of judicial demand until fully paid, for all costs of these proceedings, and for all general and equitable relief.

 

RESPECTFULLY SUBMITTED:

 

 

                                                                                                                             

Jared Shearman, Esq.

THE LAW OFFICES OF JARED M. SHEARMAN, LLC

4240 Canal Street, 2nd Floor, Ste. 102

New Orleans, Louisiana 70119

Telephone: (504) 321-6136

Email: shearman.law@gmail.com

 

Attorney for Plaintiff

 

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