French v. Allstate Indem. Co.
| Decision Date | 04 April 2011 |
| Docket Number | No. 09–30209.,09–30209. |
| Citation | 637 F.3d 380 |
| Parties | Kathryn FRENCH; Malcolm H. Sutter, Plaintiffs–Appellants–Cross–Appellees,v.ALLSTATE INDEMNITY COMPANY, Defendant–Appellee–Cross–Appellant. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Bruce M. Danner (argued), Law Office of Bruce M. Danner, Madisonville, LA, James Edmon Cazalot, Jr. (argued), H. Edward Sherman, A.P.L.C., New Orleans, LA, for French, Sutter.Judy Y. Barrasso (argued), Craig Isenberg, Andrea Mahady Price, Barrasso, Usdin, Kupperman, Freeman & Sarver, L.L.C., New Orleans, LA, for Allstate Indem. Co.Appeals from the United States District Court for the Eastern District of Louisiana.Before STEWART, PRADO and ELROD, Circuit Judges.CARL E. STEWART, Circuit Judge:
Homeowners Kathryn French and Malcolm Sutter (collectively, “the Plaintiffs”) sued Allstate Indemnity Company (“Allstate”) to recover additional insurance payments for damage to their home resulting from Hurricane Katrina. The Plaintiffs also sought statutory penalties and costs under Louisiana law. After a bench trial, the district court awarded the Plaintiffs additional insurance payments as well as statutory penalties. The Plaintiffs appeal, asserting that the district court improperly excluded their witness and that it should have awarded additional penalties against Allstate. They also contend that the district court misconstrued provisions in their homeowners policy and consequently awarded too little. Allstate cross-appeals the judgment, arguing that the Plaintiffs were awarded too much. For the reasons that follow, we affirm.
The Plaintiffs built their lakefront home in Slidell, Louisiana in 2003 and insured it under a homeowners policy from Allstate. They also insured their property against flood damage with a policy from Allstate Insurance Company in its capacity as a flood insurance carrier. On August 29,
2005, Hurricane Katrina hit southern Louisiana and caused considerable damage to the Plaintiffs' property. The Plaintiffs sought recovery for wind damage under their homeowners policy and for flood damage under their flood insurance policy. After several disputes over the amounts owed, this lawsuit followed. Before trial, the Plaintiffs settled their flood claims and the flood insurer was dismissed from this suit, leaving only the wind-damage claims to be tried.
The Plaintiffs' homeowners policy with Allstate has been in effect at all relevant times in this litigation. The policy covers losses to the Plaintiffs' dwelling (or home),1 adjoining structures, and personal property (otherwise known as contents), up to the following amounts:
The Plaintiffs also purchased from Allstate an endorsement called the “Building Structure Reimbursement Extended Limits Endorsement.” Where applicable, the Extended Limits Endorsement provides greater dwelling protection by increasing the coverage limit of the insured's dwelling by 20 percent.
Allstate incrementally paid the Plaintiffs' wind-damage claim and by the start of trial had paid the following amounts under the policy:
+----------------------------------------------------------------+
¦Coverage A: Dwelling ¦Paid: $215,292.88[FN3] ¦
+---------------------------------------+------------------------¦
¦Coverage B: Other Structures ¦Paid: $ 0 ¦
+---------------------------------------+------------------------¦
¦Coverage C: Contents ¦Paid: $ 91,926.37 ¦
+---------------------------------------+------------------------¦
¦Additional Living Expense[FN4] ¦Paid: $ 2,100.00 ¦
+----------------------------------------------------------------+
Additionally, as part of the settlement on their flood claims, the Plaintiffs received $171,708 from their flood insurer for damage to their dwelling.
On August 28, 2006, the Plaintiffs filed suit against Allstate in state court, seeking additional payments on their wind-damage claim, statutory penalties and damages, and costs. Allstate removed the case to the district court on the basis of diversity jurisdiction.
After a three-day bench trial in February 2009, the district court found that the Plaintiffs were entitled to an additional $123,000 on their claim of wind damage to their dwelling and $10,000 on their claim of damage to “other structures.” It determined that the Plaintiffs' repair costs would exceed their policy limit and that they were thus entitled to at least the full limit on their dwelling. The district court also concluded that the Plaintiffs were not entitled to additional living expenses under the policy; nor could they benefit from the Extended Limits Endorsement, as the Endorsement did not apply to their claim. Next, the district court found that Allstate was subject to penalties under Louisiana Revised Statute § 22:6585 because Allstate
had failed to timely pay an undisputed portion of the Plaintiffs' claim. Concluding that the older, 2003 version of § 22:658 applied, the district court calculated penalties as 25 percent of the total amount it found was due, or 25% of $348,000. The district court denied the Plaintiffs' claim for general and specific damages under Louisiana Revised Statute § 22:1220. 6 Finally, the district court rejected the Plaintiffs' argument that they were entitled to § 22:658 penalties on their contents claim. The district court entered final judgment on February 13, 2009.
Allstate timely moved to modify the judgment under Federal Rule of Civil Procedure 52(b). It argued that the Plaintiffs had not proven by a preponderance of the evidence that they were entitled to receive the additional $123,000 for wind damage to their dwelling. Allstate also asserted that with the award, the Plaintiffs' total insurance compensation for their home exceeded the value of the home, a result prohibited under Louisiana's bar against “double recovery.” Finally, Allstate argued that the district court erred as a matter of law in concluding that § 22:658 penalties were calculated as 25 percent of the Plaintiffs' total property claim, as opposed to 25 percent of just the amount untimely paid. The district court denied Allstate's motion. It concluded that there was sufficient evidence to find that additional payments were due to the Plaintiffs and that, with respect to the § 22:658 penalties, this court's decision in Grilletta v. Lexington Insurance Co., 558 F.3d 359 (5th Cir.2009), foreclosed Allstate's argument.
On appeal, the Plaintiffs make six arguments: (1) the district court abused its discretion by excluding the report and testimony of their expert, Salvant; (2) they are entitled to benefit from the Extended Limits Endorsement in their policy; (3) they are entitled to payments under the Additional Living Expenses provision; (4) the district court incorrectly concluded that the Plaintiffs were not entitled to § 22:1220 damages; (5) the district court mistakenly applied the 2003 version of § 22:658 and not the amended, 2006 version; and (6) the district court incorrectly concluded that Allstate owed no statutory penalties on the Plaintiffs' contents claim. On cross-appeal, Allstate renews the two arguments from its Rule 52(b) motion: (1) the record contains insufficient evidence to support the district court's award of additional payments to the Plaintiffs for wind damage to their home; and (2) § 22:658 penalties are due only on the undisputed amount a court finds due to an insured, not on the total amount it finds due.
We apply Louisiana law in this diversity case. See Bayle v. Allstate Ins. Co., 615 F.3d 350, 355 (5th Cir.2010) (“When, as here, jurisdiction is based on diversity, we apply the forum state's substantive law.”). The Plaintiffs' homeowners policy also specifies that if a covered loss occurs within Louisiana, “the laws of Louisiana shall govern any and all claims or disputes in any way related to this policy.”
In Louisiana, an insurance policy “constitutes the law between the insured and insurer, and the agreement governs the nature of their relationship.” Bradley v. Allstate Ins. Co., 620 F.3d 509, 516–17 (5th Cir.2010) (quoting Peterson v. Schimek, 729 So.2d 1024, 1028 (La.1999)); see also La. Civ.Code art. 1983 (“Contracts
have the effect of law for the parties....”). When an insurance policy is subject to interpretation, “[w]ords and phrases ... are to be construed using their plain, ordinary and generally prevailing meaning,” unless the words have acquired a technical definition. Bradley, 620 F.3d at 517 . The policy as a whole must “be construed according to the entirety of its terms and conditions as set forth in the policy, and as amplified, extended, or modified by any rider, endorsement, or application attached to or made a part of the policy.” La.Rev.Stat. § 22:881.
When a district court's final judgment following a bench trial is appealed, we review the district court's findings of fact for clear error, and conclusions of law and mixed questions of law and fact de novo. Dickerson v. Lexington Ins. Co., 556 F.3d 290, 294 (5th Cir.2009). “A finding is clearly erroneous if it is without substantial evidence to support it, the court misinterpreted the effect of the evidence, or this court is convinced that the findings are against the preponderance of credible testimony.” Becker v. Tidewater, Inc., 586 F.3d 358, 365 (5th Cir.2009). We will reverse under the clearly erroneous standard “only if we have a definite and firm conviction that a mistake has been committed.” Canal Barge Co. v. Torco Oil Co., 220 F.3d 370, 375 (5th Cir.2000). Moreover, “[t]he burden of showing that the findings of the district court are clearly erroneous is heavier if the credibility of witnesses is a factor in the trial court's decision,” as we must give due regard to the district court's...
To continue reading
Request your trial
- Bame v. Dillard
- Johnson v. Gov't of the Dist. of Columbia
- Johnson v. Gov't of The Dist. of D.C.
-
Smith v. Lanier
... ... first floor entrance as a wrought-iron gate at the top of a stairway with a set of brown, French-style doors behind it. (Ellingsworth Dep., at 35.) After returning to the car, the CI told ... ...