Jones v. Government Employees Insurance Co.
2017 La. App. LEXIS 1090
La. Ct. App.2017Background
- In June 2011 Jones settled with the tortfeasor’s insurer (Allstate) for $15,000, then sought UM benefits from his carrier GEICO, which denied coverage claiming his policy was issued under Georgia law and required specific release language that Jones did not obtain.
- Jones sued GEICO for UM benefits and for statutory penalties/attorney’s fees under La. R.S. 22:1892 and 22:1973, alleging bad faith and a misrepresentation/omission about policy terms.
- Parties litigated a choice-of-law dispute; the trial court and this court (majority) ultimately held Louisiana law applied; GEICO sought further review to litigate the coverage defense prior to tendering.
- After finality on the choice-of-law issue, GEICO tendered payment; Jones moved for partial summary judgment alleging GEICO acted in bad faith by delaying tender and by failing to disclose the Georgia-policy release requirement.
- Trial court granted Jones partial summary judgment finding bad faith; this court converted GEICO’s appeal to a writ, reversed as to delayed-tender penalties, and remanded limited issues for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Decretal language / appellate jurisdiction | Trial court judgment granting partial summary judgment was final and appealable. | Judgment lacked necessary decretal specificity but appeal may be converted to writ. | Court converted appeal to writ because decretal language was deficient and proceeded with supervisory review. |
| Bad faith for delayed tender (La. R.S. 22:1892 & 22:1973(B)(5)) | GEICO received satisfactory proof of loss and unreasonably delayed tender => statutory penalties apply. | GEICO had a reasonable, cognizable coverage defense (choice-of-law) and was entitled to litigate before tendering. | GEICO entitled to summary judgment as a matter of law on delayed-tender penalty claims; its litigation of the choice-of-law defense justified delay. |
| Misrepresentation / omission of policy terms (La. R.S. 22:1973(B)(1)) | GEICO knew policy was a Georgia policy and failed to inform Jones or counsel that a specific release was required, inducing waiver. | GEICO reasonably relied on insured’s Georgia address and other dealings; it had no duty as a matter of law to inform. | Genuine issues of material fact (intent, knowledge, credibility) preclude summary judgment; remand for factfinder on misrepresentation allegation. |
| Appropriateness of summary judgment | Grant partial summary judgment on bad faith (both delay and omission). | Summary judgment inappropriate on factual/credibility issues; limited summary judgment appropriate on legal issue of delayed tender. | Trial court’s partial summary judgment reversed in part: summary judgment granted to GEICO on delayed-tender statutes; denied as to misrepresentation claim. |
Key Cases Cited
- Guillory v. Lee, 16 So.3d 1104 (La. 2009) (definition and strict construction of insurer bad-faith penalties; "arbitrary, capricious, or without probable cause" standard)
- McDill v. Utica Mut. Ins. Co., 475 So.2d 1085 (La. 1985) (obligation to make a good-faith unconditional tender when a reasonable amount is apparent)
- Reed v. State Farm Mut. Auto Ins. Co., 857 So.2d 1012 (La. 2003) ("vexatious" or "arbitrary and capricious" described; bad-faith refusal not based on a good-faith defense)
- Louisiana Bag Co., Inc. v. Audubon Indem. Co., 999 So.2d 1104 (La. 2008) (penalties only when facts negate probable cause for nonpayment; insurer entitled to rely on reasonable defenses)
- Freeman v. Phillips 66 Co., 208 So.3d 437 (La. App. 4 Cir.) (decretal-language requirements for a final, appealable judgment)