Nelson v. Americas Ins. Co., CIVIL ACTION NO. 17-850-JWD-RLB

CourtUnited States District Courts. 5th Circuit. Middle District of Louisiana
Decision Date01 November 2019
Docket NumberCIVIL ACTION NO. 17-850-JWD-RLB




November 1, 2019


This matter comes before the Court on the Motion for Partial Summary Judgment on Claims Under Louisiana Revised Statute 22:1318 (Doc. 31) (the "VPL Motion") filed by Defendant Americas Insurance Company ("AIC" or "Defendant"). Plaintiffs Charles Nelson and Barbara Nelson ("Plaintiffs") oppose the motion (Doc. 39), and AIC has filed a reply (Doc. 50). Oral argument is not necessary. The Court has carefully considered the law, the facts in the record, and the arguments and submissions of the parties and is prepared to rule.

I. Introduction

The essential facts are undisputed. Plaintiffs had a homeowner's policy with AIC. Their property flooded. Then, after Plaintiffs began cleanup but before they made any major repairs, their property burned down. AIC paid Plaintiffs certain insurance proceeds but offset the amounts with what Plaintiffs recovered from their flood insurer.

Plaintiffs now bring this suit seeking, among other things, to recover the total amount of their homeowner's policy under Louisiana's Valued Policy Law, La. Rev. Stat. Ann. § 22:1318 ("VPL"). This statute provides in relevant part:

Under any fire insurance policy insuring inanimate, immovable property in this state, if the insurer places a valuation upon the covered property and uses such valuation for purposes of determining the premium charge to be made under the policy, in the case of total loss the insurer shall compute and indemnify or

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compensate any covered loss of, or damage to, such property which occurs during the term of the policy at such valuation without deduction or offset, unless a different method is to be used in the computation of loss, in which latter case, the policy, and any application therefor, shall set forth in type of equal size, the actual method of such loss computation by the insurer.

La. Rev. Stat. Ann. § 22:1318(A) (emphasis added).

AIC moves for summary judgment on this claim on the grounds that Plaintiffs' property was not rendered a total loss by a covered peril (fire) but was rather partially destroyed by a non-covered peril (flood). Defendant points to Fifth Circuit decisions and various Eastern and Western District cases. Plaintiffs oppose, arguing that they prevail because of the plain language of the statute and because there are questions of material fact precluding summary judgment.

For the following reasons, the VPL Motion is granted. Because Plaintiffs' property was damaged due to flooding (a non-covered peril) and fire (a covered peril), there was no "total loss" under the VPL, and Plaintiffs cannot recover the total amount of their homeowner's policy with AIC for the damages they sustained in the fire.

II. Relevant Factual Background

A. The Policy

AIC issued a homeowner's insurance policy, Policy Number 626401 (the "Policy"), for certain property owned by Plaintiffs in Independence, Louisiana (the "Property"). (Policy, Doc. 29-5.) The Policy provides the following:

A. Coverage A - Dwellings and Coverage B - Other Structures
1. We insure against risks of direct physical loss to property described in Coverages A and B.
2. We do not insure, however, for loss:
a. Excluded under Section I - Exclusions;

(Policy, Doc. 29-5 at 19.)

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With respect to the first, Coverage A (entitled "Dwelling") provides, "We cover: a. The dwelling on the 'residence premises' shown in the Declarations, including structures attached to the dwelling[.]" (Policy, Doc. 29-5 at 14.) Further, an "occurrence" is defined in the Policy as "an accident . . . which results, during the policy period , in: . . . 'Property damage[,]' " which is defined as "physical injury to, destruction of, or loss of use of tangible property." (Policy, Doc. 29-5 at 13.)

With respect to the second (Exclusions), the Policy provides:

A. We do not insure for loss caused directly or indirectly by any of the following. Such loss is excluded regardless of any other cause of event contributing concurrently or in any sequence to the loss. These exclusions apply whether or not the loss event results in widespread damage or affects a substantial area.
. . .
3. Water Damage
Water Damage means:
a. Flood, surface water, waves, tidal water, overflow of a body of water, or spray from any of these, whether or not driven by wind;

(Policy, Doc. 29-5 at 22-23.)

The Policy also provides that AIC will "not be liable in any one loss: . . . [f]or more than the applicable limit of liability." (Policy, Doc. 29-5 at 24.) The Policy describes the following "Limits" and "coverage for which premium was paid:"

Coverage A - Dwelling
$ 138,500
Coverage B - Other Structures
$ 13,850
Coverage C - Personal Property
$ 69,250
Coverage D - Loss of Use
$ 27,700
Coverage E - Liability
$ 100,000
Coverage F - Medical Payments
$ 1,000

(Policy, Doc. 29-5 at 2, 4.)

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B. The Flood Insurance Policy

Additionally, Occidental Fire & Casualty Company of North Carolina also issued to Plaintiffs a flood insurance policy on the Property. (Docs. 29-6; 29-7; Petition for Breach of Contract, Breach of Duty of Good Faith and Fair Dealings and For Penalties ("Petition") ¶ 6, Doc. 1-1 at 2.)

C. The Great Flood and the Fire

Plaintiffs' home was damaged in August 2016 by the Great Flood. (Petition, ¶¶ 5, 8, Doc. 1-1 at 1-2.) Barbara Nelson testified that, after the flood, she never obtained "an estimate to repair the roof or interior damage . . . [b]ecause [they] were going to wait and redo the whole house . . . because [they] had flooded and all[.]" (B. Nelson Dep. 39:16-22, Doc. 50-1 at 2.) The areas that were damaged were in the living room and her bedroom. (B. Nelson Dep. 39:23-40:4, Doc. 50-1 at 3.)

There is conflicting evidence as to how much AIC paid Plaintiffs for wind damage sustained during the Great Flood. AIC asserts that it paid Plaintiffs $3,361.63. (Marcia Riley Aff. ¶ 21, Doc. 29-4 at 2; Letter, Doc. 29-21 at 1). Plaintiffs respond that this figure is misleading, as AIC adjuster Marcia Riley testified that Plaintiffs were really only paid $438.74, which was the actual cash value less the deductible. (Riley Dep. 41:10-20, Doc. 39-6 at 1.) Barbara Nelson similarly testified that she received about $400, after deductible and depreciation, for the wind damage. (B. Nelson Dep. 40:5-14, Doc. 50-1 at 3.)

In any event, Occidental issued two checks in December 2016 for the August 14, 2016, flood damage. (Occidental Checks, Doc. 29-7.) The checks were in the amounts of $61,357.81 and $12,290.58. (Occidental Checks, Doc. 29-7.) These flood payments will be discussed in greater detail below.

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Plaintiffs alleged, "while [they] were attempting to obtain funds from their flood insurer to begin repairing their home, their home caught fire on October 20, 2016, due to an unknown cause." (Petition ¶ 8, Doc. 1-1 at 2.)

The parties dispute the extent to which work was done on the Property after the flood but before the fire. Specifically, Barbara Nelson attests that, "on October 19, [her] daughter, Tabatha Whitehead, had been to check on the [P]roperty and perform clean-up work, and found it in good condition, with the electricity working." (B. Nelson Aff. ¶ 4, Doc. 39-8 at 1.) Whitehead similarly stated that she checked on the Property on October 19, "which was done routinely, and performed clean-up work. [She] found the [P]roperty in good condition, with the electricity working, and the upper floor habitable." (Whitehead Aff. ¶ 5, Doc. 39-9 at 1.) Riley similarly admitted that Plaintiffs "went [to the Property] several times . . . just to check on the [P]roperty's condition, make sure that it was okay and to determine what they could do to begin repairs according to their statements[.]" (Riley Dep. 143:12-19, Doc. 39-12 at 2.)

Conversely, Defendant points to other evidence. Specifically, Barbara Nelson testified at her deposition that, at the time of the fire, there was no time frame for repairing the house, and no one had spent the night at the house since the flood. (B. Nelson Dep. 57:14-21, Doc. 30-5 at 2.) Barbara Nelson also stated:

Q: And at this time when Tony Robinson is there, did y'all start any kind of mitigation, any kind of mediation to repair the flood stuff, meaning did you start pulling items out, did you start tearing the walls down?

A: While he was there, no sir.

Q: It looks like he was there approximately September 7th, 2016; the fire occurs about somewhere October 20th, 2016.
Between that time, did y'all start any of the pulling stuff out, pulling the walls down, anything like that?

A: We started pulling stuff out but not the walls down.

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Q: Who was pulling some of the things out?

A: Me and Tiffany. . . .

Q: Y'all didn't hire anybody to do anything?

A: No, sir.

(B. Nelson Dep. 40:15-41:13, Doc. 50-1 at 3-4.) Additionally, Mrs. Nelson said that no one spent the night at the Property between the flood and the fire. (B. Nelson Dep. 43:17-20, Doc. 50-1 at 6.) Mrs. Nelson also stated she would go to the Property "every two or three weeks . . . to check on everything." (B. Nelson Dep. 43:21-44:4, Doc. 50-1 at 6-7.) At the time of the fire, it had been weeks since she had gone to the Property. (B. Nelson Dep. 45:6-12, Doc. 50-1 at 8.) Sometimes Mrs. Nelson would go with her other daughter Tabitha. (B. Nelson Dep. 58:13-24, Doc. 50-2 at 5.)

Tiffany Whitehead testified that she and Mrs. Nelson went to the Property maybe two or three times to check it. (T. Whitehead Dep. 15:2-21, Doc. 50-3 at 2.) When they went, they tried to clean out the contents, though they never moved furniture out. (T. Whitehead Dep. 15:22-16:4, Doc. 50-3 at 2-3.)

D. Payments Made to Plaintiffs under the Policy for the Fire and under the Occidental Policy...

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