Aunt Sally's Praline Shop, Inc. v. United Fire & Casualty Co., 418 F. App'x 327

Aunt Sally’s Praline Shop, Inc. filed a hurricane-damage insurance claim under its United Fire policy after Katrina struck New Orleans on August 29, 2005.
United Fire initially denied claims, later paid some amounts, but paid far less than Aunt Sally’s sought.
Suit was filed in state court for contract damages and penalties; it was removed to the Eastern District of Louisiana.
United Fire asserted defenses including policy exclusions, but did not plead them as affirmative defenses; discovery and pre-trial proceedings occurred for over 18 months.
Belated policy-exclusion defenses were excluded by the district court via in limine; trial proceeded, resulting in a verdict for Aunt Sally’s with damages and penalties.
A second, limited trial occurred (Nov. 2009) after which United Fire challenged the rulings; the Fifth Circuit affirmed the district court’s rulings and verdicts.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether policy exclusions could be raised after pleadings	Aunt Sally’s contends United Fire waived by not pleading exclusions earlier and that late raising affected trial prep.	United Fire asserts Rule 8(c) and state law require explicit pleading of exclusions and that exclusions are affirmative defenses needing timely assertion.	Policy exclusions are affirmative defenses that must be pleaded; district court properly excluded them.
Whether Simoncioni’s testimony on net income was admissible and supports damages/penalties	Simoncioni’s knowledge as CEO allows testimony on prospective income and business prospects.	Such testimony should be excluded as improper lay opinion or speculation.	Testimony was proper lay testimony from a knowledgeable officer and supported damages/penalties; no reversible error.
Whether the evidence supports the chartres Street damages and other awards	Damages for Chartres Street and the related items were properly supported by evidence of water damage and lost business.	Arguments attack the sufficiency of causal link and damages for betterments, personal property, and extra expenses.	Evidence was sufficient to support the jury’s findings on Chartres Street damages and related awards.

Rogers v. McDorman, 521 F.3d 381 (5th Cir. 2008) (Rule 8(c) affirmative defenses require specificity)
Ingraham v. United States, 808 F.2d 1075 (5th Cir. 1987) (residuary Rule 8(c) defenses include exclusions from insurance policies)
Lucas v. United States, 807 F.2d 414 (5th Cir. 1986) (state-law determines pleading of affirmative defenses in diversity cases)
Griffin v. Schwegman Bros. Giant Supermarkets, Inc., 542 So.2d 710 (La. App. 4th Cir. 1989) (policy exclusions are affirmative defenses requiring pleading)
Sher v. Lafayette Ins. Co., 988 So.2d 286 (La. 2008) (slim exception to pleading exclusions when exclusions raised by plaintiff)
Versai Mgmt. Corp. v. Clarendon Am. Ins. Co., 597 F.3d 729 (5th Cir. 2010) (business-owner testimony on losses permissible)
DIJO Inc. v. Hilton Hotels Corp., 351 F.3d 679 (5th Cir. 2003) (Rule 701 allows business-owners to testify on particularized knowledge)
Miss. Chem. Corp. v. Dresser-Rand Co., 287 F.3d 359 (5th Cir. 2002) (permissible testimony on lost profits by corporate officers)