Danny Kelly v. State Farm Fire & Casualty Co.
559 F. App'x 316
5th Cir.2014Background
- Car accident between Thomas and Kelly on Nov 21, 2005; Kelly’s injury cost $26,803.17 and hospital stay ~6 days.
- Kelly’s Jan 6, 2006 attorney letter to State Farm sought policy-limit settlement; letter time of receipt disputed (Jan 9 vs Feb 14, 2006).
- State Farm received a demand for $25,000 policy limits on Feb 11, 2006; no clear State Farm response.
- March 22, 2006 State Farm offered $25,000; Kelly rejected and filed suit; State Farm advised Thomas of potential liability in a separate letter.
- Thomas and Kelly entered a payoff/assignment agreement: Kelly would pursue State Farm bad-faith claims and not pursue Thomas’s assets; Kelly succeeded to Thomas’s bad-faith claims as assignee.
- District court granted summary judgment to State Farm on the first claim; denied on the second; on reconsideration, full summary judgment was granted in State Farm’s favor; appellate disposition; remand for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| whether §22:1892(A)(1) supports a claim here | Kelly argues third-party loss proof is actionable | State Farm argues no proof of loss by insured; letter not a valid proof | No; §22:1892(A)(1) not applicable |
| whether §22:1892(A)(2) supports a claim | Third-party settlement proof entitlement | No written settlement with third party; not applicable | No; §22:1892(A)(2) not applicable |
| whether §22:1973(B)(1) and (B)(5) support bad-faith failure-to-settle | Insurer failed to inform and failed to settle; informThomas of offer; keep insured informed | Only misrepresentation/unspecified acts; requires actual offer or satisfactory proof of loss | partial reversal; triable issues remain as to misinforming and proof-of-loss sufficiency |
Key Cases Cited
- McGee v. Omni Ins. Co., 840 So.2d 1248 (La. App. 3 Cir. 2003) (regarding § 22:1973(B)(1) and failure to communicate/advise insured)
- Arvie v. Safeway Ins. Co. of La., 951 So.2d 1284 (La. App. 3 Cir. 2007) (duty to inform insured of settlement status and input in settlement decision)
- McPherson v. Cingular Wireless, LLC, 967 So.2d 573 (La. App. 3 Cir. 2007) (noncommittal language in offers not an actual offer; § 22:1973(B)(1) analysis)
- Reed v. State Farm Mut. Auto. Ins. Co., 857 So.2d 1012 (La. 2003) (definition of satisfactory proof of loss under § 22:1973(B)(5))
- Langsford v. Flattman, 864 So.2d 149 (La. 2004) (limits third-party proofs of loss under § 22:1973(B)(5))