Articles Posted in Legal Definitions

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NOLA 180 (“NOLA”), a non-profit corporation, was the manager of Langston Hughes Academy Charter School. Kelly Thompson, the Financial Officer of Langston Hughes, was found guilty in federal court of embezzling $667,000 from NOLA, in order to finance her gambling habit. Subsequently, NOLA filed suit against Jazz Casino, alleging that it “substantially participated in and facilitated the gambling obsession of Thompson, and at times materially assisted, encouraged, and otherwise aided and abetted Thompson in the gambling obsession that led to Thompson’s theft.” NOLA also alleged that Jazz Casino “encourag[ed] and/or contribut[ed] to the financial loss suffered by NOLA.” The trial court, The Civil District Court from the Orleans Parish, heard the case. The trial court ruled that NOLA failed to state a right of action or cause of action and dismissed all of NOLA’s claims.

NOLA appealed, and the appellate court, The Court of Appeal for the Fourth Circuit of Louisiana, heard the case. On appeal, the sole issue was whether NOLA’s petition and amended petition stated a cause of action or a right of action against Jazz Casino. On appeal, NOLA asserted three theories for which it could be entitled to relief: it claimed relief under La. Civ. Code art. 2315 for general negligence; under the Louisiana Unfair Trade Practices Act (“LUTPA”); or under the “abuse of rights” doctrine, see Morse v. J. Ray McDermott & Co.,344 So.2d 1353 (La. 1976).

Unfortunately for NOLA, not all of those theories could be reviewed. First, NOLA never presented any claims pursuant to LUTPA before the trial court. Appellate courts are limited to reviewing only what is in the record; therefore, the LUTPA claim could not be reviewed. Second, NOLA’s “abuse of rights” doctrine claim, also could not be reviewed. It was not mentioned in NOLA’s petition or amended petition. “That argument is first made in NOLA 180’s opposition memorandum filed in the trial court.” The Court of Appeals noted that “This court is a court of record and can only review what is contained in the record on review.” The Court stated,”We note also that large portions of plaintiff’s brief alluding to research, psychiatric findings, and compulsive gambling, are not contained in the record.”

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Licensed attorneys in New Orleans were asked which attorney they would recommend to residents in the New Orleans area. Attorney Jeffrey Berniard, of the New Orleans-based Berniard Law Firm, LLC, was named one of the best mass litigation and class action attorneys in New Orleans in the November 2012 issue of the magazine. Propelled into success by holding insurance companies accountable in the wake of Hurricane Katrina, Berniard has built the Berniard Law Firm into one of the premiere personal injury law practices in not only New Orleans, but the entire state of Louisiana. Since Hurricane Katrina, Berniard Law Firm has focused on insurance disputes and class action litigation.

Jeffrey Berniard has been involved in several high-profile cases, solidifying his expertise in complex high risk litigation. He worked on the highly publicized Deep Water Horizon oil rig case in the Gulf Coast, representing a very large group of individuals affected by the sinking oil rig. In 2008, Berniard Law Firm secured a $35 million dollar settlement for a class of 70,000 members seeking bad faith penalties for tardy payments by a Louisiana insurance company in the wake of Hurricane Katrina and Hurricane Rita. In 2009, the Berniard Law Firm participated in five class actions against insurance companies and corporations. In the process of these major claims, the firm also helped many residents of the Gulf Coast with their personal injury concerns, insurance claims and business disputes.

– What is Mass Tort Litigation? –

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In the first year of law school, nearly every student takes a course in Contracts. Contract law is one of the bases of our legal system and is at the core of almost all legal agreements. Everytime you get car insurance, sign a lease, agree to pay your plumber or electrician for work, or sign up for new cellphone service, you are dealing with a contract.

In contracts, every single word and punctuation mark is important. Clear, concise and unambiguous language is vital to writing a good contract. Sometimes even big companies enter into contracts that contain ambiguous language. These ambiguities can cause legal problems down the road. The case of WH Holdings, L.L.C. et al. v. ACE American Insurance Company illustrates how ambiguous contract language can lead to legal problems for the parties involved.

Prior to Hurricane Katrina, WH Holdings, the owner of the Ritz Carlton Hotel Complex in New Orleans, hired Gootee Construction Company to renovate the existing structure of the complex. Gootee was in the process of performing the renovations when Hurricane Katrina made landfall and caused damage to the exterior of the building. WH Holdings filed suit against Gootee’s insurer, ACE American Insurance Company, for almost $3.3 million for damage to the exterior of the hotel.
The parties agreed that the contract was governed by a form document known as the General Conditions of the Contract for Construction (General Conditions). The General Conditions is a document that contains amendments that the parties negotiated themselves – the Court acknowledges that these amendments are clearly marked in the document.

Both parties also agreed that WH Holdings was only covered under the policy which ACE issued to Gootee if, and only if, WH Holdings qualified as an insured party under the policy. Thus the entire case rested on whether or not Gootee was “contractually obligated… to insure WH Holdings such that it became an insured on the ACE policy.”

To reach its decision, the District Court looked at two clauses of the contract, Subsections 11.4.1 and 11.1.5(g). The parties distinctly amended a portion of Subsection 11.4.1. to seemingly place the responsibility of purchasing property insurance on Gootee. The District Court even acknowledged that if 11.4.1 stood alone, ACE would have no basis to contest WH Holdings claim. However, the District Court held that a separate subsection, 11.1.5(g), located in a different portion of the contract, changed the meaning of 11.4.1 by “unambiguously… obligating WH Holdings to carry the insurance ‘when the construction is an addition or a renovation.'”
The district court granted ACE’s motion for summary judgment and concluded that WH Holdings was not an insured party under the contract and Gootee had no responsibility to insure WH Holdings.

The 5th Circuit disagreed with the District Court’s analysis stating that while the district court “relied entirely on subsection 11.1.5(g) in finding the contract unambiguous… subsection 11.1.5(g) is not as ‘crystal clear’ as the district court thought it to be.” The Court goes on to point out that 11.1.5(g) appeared in an entirely different portion of the contract than 11.4.1. Subsection 11.1.5(g) appeared in a section of the contract covering “Contractor’s Liability Insurance” while 11.4.1 appeared in a section entitled “Property Insurance.” The Court found that 11.1.5(g) is limited in scope by a preceding clause and therefore does not modify 11.4.1, and to read it any other way would be ignoring this express limit. The 5th Circuit finally stated that it simply cannot agree with Gootee’s assertion and the District Court’s conclusion that the contract language unambiguously obligated WH Holdings to purchase property insurance.

The 5th Circuit also disagreed with WH Holdings argument that it was in fact Gootee who was “unambiguously required… to purchase the property insurance” since WH Holdings was unable to persuasively argue their interpretation. Stating that there were “difficulties with each party’s contention that the contract unambiguously supports its position,” the 5th Circuit vacated the District Court’s judgment and remanded the case back to the District Court. Finally, due to the ambiguous nature of the contract, the 5th Circuit also ordered the District Court to examine outside evidence brought by both parties regarding the meaning of the contract and to examine how both parties had performed the contract prior to the lawsuit being brought.

Contracts can be extremely important and very complicated particularly when dealing with insurance issues. Hiring the proper attorney is very important to ensure that all documents relevant are maintained, and provided, from start to finish, as well as to navigate any complicated appeals that may arise.

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In Jane Doe v. Southern Gyms, LLC arising out of Baton Rouge, Louisiana, a class action suit was filed involving a local branch of the national gym, Anytime Fitness, was accused of taking pictures of 250-300 women changing in a locker room. The plaintiffs filed on behalf of all women who’d used the gym during the time period and the class was certified to proceed to trial.

To understand what “the class was certified” means, it is important to understand what a class action suit is the reasons why we allow class actions in the first place. Class action suits are a useful tool in litigation in that it can bring together large numbers of substantially similar or identical claims into a single proceeding. This contributes to judicial efficiency as often times the type of cases litigated as class actions can have as many as thousands of plaintiffs. Assuming each of these cases was large enough to be worth bringing to court individually, there would be substantial amounts of duplicated effort by each party. However, the real value of class actions is in allowing cases that normally would be too small to litigate individually to have their day in court. If a case involves a real injustice to thousands of people, but the actual per person damages is relatively small it would be too costly to vindicate their claims.

In this case, the class proposed was:

all females who physically entered the women’s restroom/locker room/ changing room at Anytime Fitness, 200 Government Street, Baton Rouge, LA 70802 from November 1, 2009, through and including April 5 2010.

The rules that govern class actions require that several hurdles be met before a class can be certified (allowed) to proceed: there must be enough members that litigating separately is impractical; the questions of law and facts in the case common to the parties; the class representative’s claims must be typical of the claims of the class; they are able to protect the interests of the entire class, and finally the class must be able to be adequately defined so the court can be satisfied that the suit will end the dispute.

This case is noteworthy because the actual size of the class is fairly small. The gym operator admitted to videotaping on only 10-15 occasions. While any number of women may have been victims during these periods, the class itself was certified for any woman using the gym during a nearly 6 month period. There is no rule that states the minimum number of plaintiffs required for a class action, but the appeals court did not give a rousing endorsement for the “numerosity” (size) of the class in this case, they merely deferred to the trial court judgment on the matter. What was particularly noteworthy was the court weighed concerns beyond just the actual numbers of women involved. An additional factor was evidence that the gym allowed members from around the country to use it and thus the plaintiffs might not all have been locals which would have substantially increased the burden to litigate separately. Had all the women been locals, it is possible the court would have required “joinder” or just combining separate cases rather than allowing a representative in a class action suit.

Most people have been involved in a class action suit and may not have even been aware of it. Generally, each member of the class is required to be notified to give them the opportunity to opt-out of (or into) the class. This will typically be done via a postcard by mail. Thousands of these cards are thrown away without being read yearly but they can entitle plaintiffs to small to moderate cash settlements without ever setting foot in a courtroom, as you are being represented by the person bringing the suit!

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When an accident occurs, there is usually a fight over whose insurance company will pay for the damages. The issue becomes even messier when the driver responsible for the wreck appears to be working under different employers. This was the issue in a recently decided case by the Louisiana Court of Appeal for the Third Circuit, which involved a wreck in Maurice.

In that case, Broussard v. Progressive Security Ins. Co., et. al., a dump truck hauling material to a construction site struck another vehicle in an intersection. The passengers of that vehicle filed a lawsuit against the driver, the subcontractor for which the driver worked, the general contractor who had hired the subcontractor and the insurance companies for both the subcontractor and the general contractor. The issue before the court was which insurance company would be held liable for damages: the subcontractor’s or the general contractor’s.

The court focused primarily on the language of the policy held by the general contractor. Under that policy, a “non-owned auto” could be covered under certain conditions. A “non-owned auto” was described as a vehicle not actually owned by the company, but were vehicles leased, hired or rented to be used in connection with the business. Thus, the question became whether the dump truck driver had been hired by the general contractor and whether or not the truck he was driving was hired or rented by the general contractor.

After analyzing the facts, the court found that, although the employee was hired by the general contractor, there was no evidence that the truck itself was hired or rented. Therefore, the subcontractor’s insurance still covered the truck and would be liable for the plaintiff’s damages.

Insurance issues like this are complex, especially in the business context. Depending on the policy, certain vehicles may be covered and others may not depending on certain circumstances. The determination of which insurance applies could mean hundreds of thousands of dollars for that insurance company, and hundreds or thousands of dollars in increased premiums for the policy holder. For this reason, it is important that companies and individuals know and understand their insurance policies.

Additionally, companies must be aware of who they hire. As was touched on in the above case, employees who cause an accident while operating within the scope of their employment can place their employer in the liability hot seat. Insurance in this context will play a critical role. For example, if an employee is drunk while driving his delivery route and causes an accident, the employer and the employer’s insurance will likely be responsible for damages.

For businesses, this means hiring a questionable driver can put the company at risk of increased expenses from lawsuits and the danger of being dropped from its insurance. For individuals injured by these negligent drivers, this structure allows them to obtain the compensation they need to cover medical expenses, pain and suffering, and lost wages. Then, hopefully, the individual can achieve a full recovery.

When an accident occurs, the last thing people want to deal with is interpreting convoluted insurance policies. Yet, these documents are of vital importance when determining who will pay for accident damages. A competent attorney can walk you through the documents and help create a legal strategy that protects your best interests.

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When personal items are lost to fire, the anguish one experiences can be devastating. One must sift through the remains to determine what was lost, not only as a personal inventory but also for insurance purposes. Such was the experience of Ronald and Delores Semar of Lafayette, Louisiana. Their building was destroyed after an adjacent motor home caught fire due to a defective refrigeration unit. The building housed their collection of antique vehicles, a collection that had taken the Semars 20 years to assemble. The Semars described the collection as a documentary of their lives together. It was reduced to ashes because of the fire.

Property damage to the Semars exceeded their insurance coverage, so the Semars sought to recover their uninsured losses and mental anguish damages from the manufacturer of the defective refrigeration unit. The Semars’ insurance company also sought subrogation against the manufacturer. Subrogation is a legal doctrine by which claims of an insured party (here, the Semars) against a negligent third party (the manufacturer) pass to the insurance company.

Insurance policies and laws are designed to ensure speedy payouts when an insured party properly submits evidence of its damages, even if the insured is a third-party claimant. Specifically, Louisiana Revised Statutes 22:1892(A)(4) provides that all insurers must make a written offer to settle any property damage claim, including a third-party claim, within 30 days after receipt of satisfactory proofs of loss of that claim. Failure to do so subjects the insurer to a penalty payable to the insured, if the insurer’s failure to pay is arbitrary or without probable cause.

In the Semars’ case, the manufacturer’s 2 liability insurers failed to make a written settlement offer within 30 days of receipt of satisfactory proof of their claims. A trial court determined that the insurers had satisfactory proof of loss as to the claim to the building as of November 2009. A written settlement offer was not made until August 2010. The trial court held that the failure of the insurers to comply with the 30-day timeframe was not made in good faith or with probable cause. It ruled against the manufacturer and its insurers, awarding damages in favor of the Semars in the amount of $1,628,789 and in favor of the Semars’ insurance company in the amount of $1,591,505.

The manufacturer appealed, primarily contesting that the trial court improperly concluded that its insurers did not make a written settlement offer within a reasonable time after receiving proper proof of loss for reasons that were arbitrary and without probable cause. A Louisiana Court of Appeals affirmed the trial court’s ruling. It held that proof of loss is a flexible requirement that is met as long as the insurer has sufficient information to act on the claim. The manner in which it obtains the information is immaterial. In this case, because the insurers were informed that the manufacturer was at fault and photographs and documentation proved the loss to the Semars, the court concluded that the insurers were sufficiently apprised of the claims as of November 2009. Its failure to make a written settlement offer until the following August was therefore unjustified. Further, it agreed with the Semars’ contention that the trial court erred in not awarding damages for loss of use of the antique vehicles. Evidence showed that family members of the Semars often used the antique cars when their vehicle was broken down. Accordingly, the court awarded the Semars an additional $20,000 as reasonable compensation for the loss of the use of the antique vehicles. Attorney fees for work completed on the appeal for the Semars and their insurance were assessed against the manufacturer and its insurers as well.

If you have an insurance issue, contact the Berniard Law Firm. Providing the best experts in diagnosing the cause of damages, our law firm can handle all of your litigation needs.

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After a recent car accident in Kenner, Louisiana, the plaintiff’s uninsured/underinsured insurance carrier, Progressive, appealed a claim against it, claiming in part that the general damages awarded the plaintiff were excessive. Although Progressive’s claim was dismissed and the award for general damages affirmed, this case brings up the important subject of general damages in personal injury cases.

When filing a claim in a motor vehicle accident, the plaintiff wants to make sure that he or she receives all appropriate damages, and a large component of the damages award typically falls in the category of general damages. So what are general damages and how do you get the appropriate amount of general damages? First, the phrase “general damages” refers to those damages that you can’t easily put a dollar amount on. This is opposed to the other main category of damages, “special damages,” which refers to those damages such as specific medical bills or lost wages that can more easily be determined precisely.

General damages normally encompass areas of loss such as pain and suffering that are inherently subjective. These damages also include compensation for things such as disfigurement and loss of enjoyment of life. One way these damages can be proven is by testifying of things such as limited mobility or the inability to participate in specific activities as a result of the accident. However, while the loss of enjoyment or pain can be testified of, it is often hard to assign a dollar amount to this suffering.

Because the area of general damages is so subjective, many defendants appeal awards of general damages which they deem excessive, just as in the Progressive case referred to above. In the Progressive case, the award of $40,000 in damages was affirmed, however, because the appellate court decided that it was not an excessive award.

In instances like this, the fact finder must look at a preponderance of the evidence when making its judgment, and Progressive argued that the trial court did not do this. The plaintiff had only been to the doctor four times, and Progressive argued that in light of that, $40,000 was excessive. However, as stated above, general damages are not directly tied to any medical bills or any specifically proven dollar amount. Rather, general damages are subjective awards of damage. In this case, the plaintiff had back pain and was limited in the activities that he could pursue after the accident.

Furthermore, the plaintiff in this case was able to receive general damages even though he had previous back problems. Even if you have had previous health problems, that does not preclude an award of general damages. In the case with Progressive, the plaintiff had previous back problems and serious surgery just two years prior. Despite both of these facts, because the plaintiff was able to prove that the accident exacerbated his back problems, he was able to receive general damages. He testified that before the accident he had gone fishing and hunting often, but he was no longer able to fish after the accident.

Even though it is hard to put a specific dollar amount on the damage that comes from the plaintiff’s newly limited activities, the fact finders (the trial court) must make that determination. Once the trial court decides on a dollar amount and passes its judgment, it can only be reversed if the appellate court finds that the trial court’s judgment was clearly wrong or manifestly erroneous or that abuse of discretion was used. In this case, appropriate discretion was used, and the judgment was not blatantly wrong or erroneous. And most importantly, the plaintiff’s attorney made sure to claim all of the requisite damages so that his client could receive the damages he deserved.

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Jason and Renee Niemann, a couple from Mandeville, Louisiana, purchased a home in 2007 in the Lakeside Village Subdivision in Mandeville, Louisiana. Unbeknownst to them, a subcontractor, Calmar Construction Company, installed Chinese drywall in the home during construction in 2006, and the Niemanns have been fighting the builder, subcontractor, and subdivision developer in court since discovering the defect in 2010.

Chinese drywall became popular amongt builders during the housing boom in 2004 because it was inexpensive and available in mass quantities. However, the defective drywall is infamous for emitting carbon disulfide, carbonyl sulfide, and hydrogen sulfide. These three sulfurous gases cause both irreparable damage to houses and severe health problems. Copper piping in the home begins to erode, taking on a black and powdery look, and residents begin experiencing respiratory issues and headaches. As a result, the house becomes uninhabitable and loses its value.

When the Niemanns signed the sales contract in 2007, they had no idea that Chinese drywall had been installed in their new home. On May 24, 2010, they filed an action in Louisiana state court, alleging breach of warranties and negligence and seeking damages from the builder, subcontractor, and subdivision developer, as well as the respective commercial general liability (CGL) insurance providers. The Niemanns argued that all three companies had been aware (or should have been) of the defects yet failed to disclose them at time of sale. As a result, they stated they had made a home purchase they would not have otherwise made, resulting in damages, economic loss, and a defective home that was unfit for its intended purpose.

During an appeal of a summary judgment order by the trial court, the appellate court asked the parties to submit briefs on whether the Niemanns had a right of action against both Calmar and Calmar’s CGL insurer, American Empire, for non-apparent damages inflicted on the house prior to sale. According to a recent Louisiana Supreme Court case, Eagle Pipe and Supply, Inc. v. Amerada Hess Corp., a plaintiff only has a right of action (or right to sue) for non-apparent damages inflicted pre-sale when there was an assignment of or subrogation of that right from the previous owner to the plaintiff. In plain English, the appellate court wanted to know if the subdivision developer and seller, Lakeside Village Development, had assigned the Niemanns its rights of remedies against Calmar and Calmar’s insurer. These rights only pass on to the new owner if specifically designated in the sale documents.

Because an appellate court can only review what is already in the record on appeal and not any documents not yet submitted into evidence, the court was unable to consider documents the Niemanns had obtained post-summary judgment that allegedly prove subrogation. As such, the court was unable to find any evidence in the facts that showed evidence of such subrogation and therefore affirmed dismissal of the Niemanns’ claims against American Empire.

With that said, there is light at the end of the tunnel. The Louisiana Code of Civil Procedure affords plaintiffs the right to amend their petitions. As such, the Niemanns will have the ability to amend their complaint and submit the evidence of subrogation they have found.

If you suspect your home was built with Chinese drywall, contact the Berniard Law Firm. Providing the best experts in construction and diagnosing the cause of damages, our law firm is fully capable of meeting your litigation needs.

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In Calcasieu Parish School Board vs. Mary Miller, the Louisiana Third Circuit examines a case in which Ms. Miller’s daughter was involved in a fight at school that resulted in injury to an art teacher employed by the school board. The school board paid the teacher workers’ compensation, then sued Ms. Miller’s homeowner’s insurance company, Louisiana Citizens Property. Both the School Board and the insurance company filed for summary judgment. A summary judgment is a ruling by the judge in favor of the filing party before the evidence in the case is presented. The trial court granted the School Board’s motion and denied the insurance company’s. The Third Circuit, in an opinion that elucidates the court’s manner of interpretation of insurance contracts, upheld the trial court’s decision.

In insurance law, the service agreement is the governing contract. The interpretation of this contract may be the deciding factor in the case. When determining coverage, the law requires that the court interpret the parties’ common intent, beginning with the insurance policy itself. The words and phrases used are assumed to have their everyday meaning, stated by the Louisiana Supreme Court as their “plain, ordinary, and generally prevailing meaning,” unless they have obtained a technical meaning. The entire contract must be considered, meaning that if a sentence affects the meaning of another sentence, then that difference in interpretation must be taken into account.

After the application of these rules, if the meaning is clear, the court is bound to apply the contract as written. Of course, at times there may still be different ways that the agreement can reasonably be interpreted. If this situation occurs, there is an ambiguity in the contract. When there is ambiguity regarding the meaning, the court favors the interpretation of the contract that grants coverage.

In the agreement between Ms. Miller and Louisiana Citizens Property, the contract stated that coverage would be granted for medical expenses resulting from actions of one of the individuals insured. A later provision excludes any “loss…[c]aused by a peril…which is expected or intended by one or more ‘insureds’….” Any time a fight takes place, injuries can be expected. Thus injuries such as the teacher’s that result from a fight, would be excluded.

Of course, the daughter would not expect to injure the teacher. Citizens Property argued that because of the mention of “bodily injury,” including an injury “of a different kind, quality, or degree than initially expected or intended,” the exclusion applied. Under this argument, even if the daughter did not expect to harm the teacher, she may have had the expectation that someone would be injured, and thus the resulting injuries would fall under the exclusion. The insurance company would then not be liable for the teacher’s injury.

The insurance company’s argument may seem convincing; however, the language of the exclusion creates an ambiguity, speaking of a “loss” from a “peril.” A loss is not a liability as a liability results when an individual or entity’s actions cause harm to another person and that person has a legal claim to be recompensed for the harm. A loss, in the context of this agreement, is generally damage to property. In addition, peril, as used earlier in the agreement, refers to loss to property, not liability arising from injury to others. The provision, however, also refers to bodily injury. Some of the language seems to limit it to property loss, while the reference to bodily injury indicates that it may be more extensive. Thus, it is unclear whether the exclusion should include liability for injury.

Following the rule that an ambiguity will be interpreted in favor of coverage, the court upheld the lower court’s ruling against Louisiana Citizens Property and in favor of the Calcasieu School Board. Such matters demonstrate the ambiguity in language that requires careful legal argument and calculated application of clauses to receive a quality verdict.

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Keith Brown v. State Farm Mutual Automobile Insurance Company, is a very interesting case to come out of the Parrish of Caddo, Louisiana. Plaintiff, Keith Brown, was injured in a two-car accident on June 30, 2008, while he was the passenger of Michael Darnell. The driver of the other car involved in the accident was Ronald Moseley. At the time of the accident, Plaintiff was insured by State Farm Mutual Automobile Insurance Company (State Farm).

State Farm was given notification of the accident on July 8, 2008, and a claim was set up. On July 18, 2008, State Farm was contacted by Plaintiff’s medical provider, Dr. Diane Sino at Chiropractic Health Center. Subsequently, State Farm paid the submitted bills, with the exception of those bills that were not paid due to invalid procedure codes; or due to a code’s inclusion in another procedure on the bill; or because the code was used more than normally was expected during a visit. Plaintiff and Sino were informed of the reasons for nonpayment, and they did not dispute them.

Further complicating these matters is the fact that on August 5, 2008, Plaintiff was involved in another car accident. On September 10, 2008, he informed State Farm about the accident, and he indicated that Allstate Insurance Company would be responsible for all medicals incurred for that accident. Plaintiff and adjusters for State Farm and Allstate confirmed this during a three-way conference call in which Allstate gave State Farm its claim number and told State Farm to forward its medical payments demand for reimbursement. State Farm had made its final payment to Dr. Sino on September 3, 2008 before receiving notice of the second accident. On September 30, 2008, State Farm sought a refund from Allstate for those inadvertent payments.

This case raised several complicated issues, mainly who was responsible for Plaintiff’s medical bills, since he sustained injuries in two different car accidents and within a relatively short time frame. In December 2008, Plaintiff filed suit against the drivers and their insured for the June 2008 accident. Plaintiff’s claims against Moseley and his insurance company, Shelter Mutual Insurance Company (“Shelter”), were settled on August 29, 2009 for $13,000 pursuant to a “receipt and release.” As pertains to State Farm, in May 2009, State Farm had informed Plaintiff that it would pursue a subrogation claim of $3,894.82 (the amount of the medical coverage paid by State Farm) against Plaintiff, and it requested that he do nothing to jeopardize those rights. In August 2009, Plaintiff’s attorney sent a letter to State Farm indicating that State Farm’s subrogation claim would be protected.

On August 21, 2009, Plaintiff and his attorney received a check for $10,642.31, and a check payable to State Farm for $2,357.69. On September 11, 2009, Plaintiff forwarded the check to State Farm, stating that it represented the “full and final settlement for any subrogation rights that you have against Mr. Brown for payments made in reference to the accident of June 30, 2008.” In the meantime, Plaintiff’s attorney sent a certified letter dated August 14, 2009,to State Farm, indicating that an outstanding balance of $458.18 was owed to Dr. Sino. State Farm received this letter on August 19, 2009. It is this balance which is at issue in the case.

On November 12, 2009, plaintiff filed suit against State Farm, alleging nonpayment of the $458.18, as well as damages and attorney fees due to bad faith. In May 2011, State Farm filed a motion for summary judgment, which the trial court subsequently granted.

The Court of Appeal, for the Second Circuit of Louisiana, affirmed the trial court’s decision. The Court noted that the disputed amount, the $458.18, fell into two categories. One category, totaling $252.86, consisted of items submitted to State Farm that were denied due to “invalid procedure codes, inclusion in another item on the same bill, or submission of multiple codes for the same thing for the same visit.” The other category, totaling $205.32, consisted of items for treatment that took place after the second accident. The Court also found that in regards to all other payments that were not at issue, that State Farm paid them in a timely manner.

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