213 So. 3d 1220
La. Ct. App.2017Background
- Insurer (Certain Underwriters at Lloyd’s London) issued commercial property policy covering 2905 Kingman Street for June 29, 2012–June 29, 2013; Hurricane Isaac struck August 29, 2012.
- Insureds (Advanced Sleep Center, Inc. and Advanced Neurodiagnostic Center, Inc.) claimed wind created openings in the roof/parapet flashing that allowed interior water intrusion and that a widespread power outage spoiled temperature‑sensitive medications.
- Plaintiffs submitted repair estimates (one by contractor Onofrey ~ $369,694; a later public adjuster estimate ~$142,597) and some photos of ruined medications, but no dated invoices or pre‑repair photographs documenting roof damage or the repairs allegedly performed by an on‑site maintenance employee.
- Insurer’s adjuster (McClary) inspected twice (Nov 2012 and Aug 2013) and found no evidence of wind‑created openings or exterior/roof damage; Entergy engineer and insurer’s engineer (Vanderbrook) testified the power outage was off‑premises and the roof showed no wind damage.
- Trial court credited the insurer’s experts and denied coverage and statutory penalty claims; plaintiffs appealed. The appellate court affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Burden of proof for coverage vs. exclusions | Insureds contend insurer should bear burden to prove exclusions apply | Insurer says insureds must prove covered loss (roof/exterior opening allowed water in); insurer must prove off‑premises power failure for contents exclusion | Court: insureds bear burden to prove roof/exterior opening; insurer must prove off‑premises power failure for contents claim; trial court’s factual findings upheld |
| Sufficiency of evidence that wind created roof opening (water intrusion) | Onofrey/insureds: flashing “waffled up” and repairs were made after storm; submitted repair estimates | Insurer: adjuster and engineer found no pre‑ or post‑storm evidence of wind damage; no pre‑repair photos or invoices from insureds | Court: plaintiffs failed to prove a wind‑created opening; trial court’s credibility determinations not manifestly erroneous |
| Loss of medications (utility service exclusion) | Insureds: power was disconnected from building causing spoilage | Insurer: widespread off‑premises outage; policy excludes contents loss from off‑premises utility failures | Court: evidence showed a widespread off‑premises outage; contents loss excluded and claim denied |
| Satisfactory proof of loss / statutory penalties | Plaintiffs: they provided estimates and notice, so insurer’s denial was arbitrary | Insurer: plaintiffs did not provide satisfactory proof (no pre‑repair photos, invoices); adjuster’s inspections found no covered damage | Court: plaintiffs did not provide satisfactory proof of loss; statutory penalty claims denied |
| Duty to investigate / reliance on adjuster | Plaintiffs: insurer breached duty by relying on adjuster recommendation and not doing more | Insurer: adjuster sought further documentation; insurer obtained second inspection and an engineer’s review | Court: insurer’s investigation was adequate under facts; no breach found |
| Appraisal clause applicability | Plaintiffs: requested appraisal after denial | Insurer: appraisal applies only to valuation disputes (amount), not coverage disputes; insurer retained right to deny | Court: appraisal not triggered because parties disputed coverage, not valuation; insurer’s further inspections showed insurer did not ignore appraisal request |
Key Cases Cited
- Doerr v. Mobil Oil Corp., 774 So.2d 119 (La. 2000) (insured bears burden to prove claim is within policy; insurer bears burden to prove applicability of exclusions)
- Louisiana Bag Co., Inc. v. Audubon Indem. Co., 999 So.2d 1104 (La. 2008) (definition and scope of "satisfactory proof of loss")
- Rosell v. ESCO, 549 So.2d 840 (La. 1989) (standard for appellate review of factual findings and credibility)
- Stobart v. State through DOTD, 617 So.2d 880 (La. 1993) (when two permissible views of evidence exist, appellate court must defer to factfinder)
- Reed v. State Farm Mut. Auto Ins. Co., 857 So.2d 1012 (La. 2003) (insured bears burden to prove insurer received satisfactory proof of loss)