As hurricane claims attorneys on each side of the “v.” in litigation know, a elementary tenet of Louisiana Regulation is that “[A]n insurer has a seamless obligation of fine religion and truthful dealing which extends all through the litigation interval.” 1 Psychological anguish, emotional misery, humiliation, aggravation, inconvenience, lack of property, lack of use, and protection prices incurred in underlying actions ensuing from an insurer’s breach are compensable common damages for breach of the obligation of fine religion and truthful dealing. In different phrases, this breach ends in dangerous religion, and the insurer’s dangerous religion results in damages. Damages attributable to the insurer’s dangerous religion are compensable below Louisiana Revised Statutes 22:1973, whatever the insurer’s intent. Arguably, this is applicable to all interactions that the insurer and their counsel have with their insured. This might not be extra evident than within the case of Thibodaux v. State Farm Hearth and Casualty Firm, 2 which is mentioned under.
In Thibodeaux v. State Farm, 87-year-old widow Elrine Thibodeaux’s house was devastated by Hurricane Laura on August 27, 2020. Elrine’s son, Stephen, lived together with her and took care of her. On October 1, 2020, State Farm’s adjuster accomplished the preliminary inspection of Elrine’s house, estimating the loss at $26,719.10, and he or she was paid $8,960.25 after subtracting her deductible of $11,155.00 and depreciation of $6,603.85 from the estimate. Residential property harm legal professionals shouldn’t be shocked that this quantity was inadequate to even pay for the roof, and the 87-year-old widow started receiving assortment letters from a regulation agency retained by the roofing firm. State Farm solely made one well timed fee within the quantity of $8,960.25 below all the coverages below the coverage – inside thirty (30) days of receiving passable proof of loss. State Farm made no additional funds on the declare.
Determined to have her house repaired, the 87-year-old widow sought financing from a personal lender to restore her storm-ravaged house – a mortgage to pay for contractors to restore storm harm that State Farm was contractually obligated to pay for. The entire quantity Elrine was pressured to finance in repairs to her house and different buildings was a staggering $191,599.66. To make issues worse, she then needed to pay an extra $1,000.00 in emergency repairs to tarp the roof and protect the property from additional harm. Shockingly, the precise price of Elrine’s storm harm was 620.831% larger than State Farm’s preliminary lowball estimate. This incongruence within the precise price of damages and State Farm’s dubiously low estimate, mixed with the pittance they paid, comes as no shock to residential property harm attorneys. Insurers like State Farm are ruthlessly systematic of their consistency with underestimating claims like Elrine’s.
Through the inside repairs of her house, the 87-year-old widow was pressured to reside within the Tremendous 8 on Martin Luther King Blvd in Lake Charles. Her son, Stephen, who’s her caregiver, used his life financial savings to hire two rooms (one for him and one for his mother) on the Tremendous 8 for 5 months, totaling $37,069.73. State Farm paid NOTHING towards the extra residing bills. In reality, State Farm doubled down on its denial of reimbursement and argued that regardless of her son Stephen being a full-time live-in caregiver, he was not entitled to reimbursement for his mom’s resort room since he was not a named insured below the coverage. Hurricane claims attorneys who litigate claims frequently perceive how tenuous such an opposed posture was for State Farm on this litigation.
Not solely was State Farm’s adjustment of the declare in dangerous religion, however throughout the litigation interval, even a cursory evaluate of the case filings helps the jury’s verdict of $240,000 for psychological anguish attributable to State Farm. As an alternative of State Farm utilizing Elrine’s deposition to result in moderately calculated discoverable data, they used this chance to personally assault Elrine and make the continuing as excruciatingly tortuous and as miserably agonizing as attainable. 3 Through the deposition, Elrine repeatedly advised State Farm’s legal professional that she had well being points affecting her deposition, together with that she is: arduous of listening to; her physique doesn’t work anymore; has scoliosis; will get very upset; has points together with her blood stress; will get drained; her backbone is crooked which causes ache; she began to not really feel nicely; was hurting; doesn’t stroll nicely; can’t work anymore; can’t stand lengthy or stroll distance, and through her depo she began “dropping vitality.” She felt just like the legal professional for State Farm was attempting to make her have a stroke and break her down, and at that time, she was simply attempting to outlive due to the stress of the deposition.
Regardless of State Farm’s acute consciousness of Elrine’s quite a few well being situations, they selected to interrogate her with rapid-fire machine-gun questions on a number of points that have been completely irrelevant to her Hurricane Laura Declare. This included asking about her marriage in 1960, when she has been widowed since 1977; asking about her employment as a janitor at McNeese when she has been retired for greater than twenty years; asking about her checking account; asking about her revenue from her pension; asking what number of occasions her grownup kids carry her lunch; asking about birthday presents she receives from her household, and plenty of different points that have been wholly irrelevant to the Hurricane Laura declare. State Farm squandered greater than 4 hours questioning the widow about non-issues that have been inappropriate and unjustifiable in mild of her well being situation and the details of the declare.
Lastly, after enduring greater than 4 hours of arduous and abusive interrogation on the deposition, Erline couldn’t take anymore and walked out. The deposition transcript bears out the astronomical toll this four-hour ordeal had on this 87-year-old widow. Astoundingly, State Farm was relentless in its pursuit to proceed deposing Elrine. State Farm remained undeterred regardless of the submitting of a protecting order and her treating doctor opining that as a result of her well being situations, she shouldn’t be deposed any additional. Incredulously, regardless of the order and medical opinion on the contrary, State Farm continued to insist on deposing Elrine.
State Farm’s antics didn’t cease there. In reality, State Farm took an antagonistic and unrealistically opposed place when it refused to launch the reserve quantities set for Elrine’s declare and went a step additional and redacted that data in her declare file. Nonetheless, the court docket disagreed with State Farm, and Elrine was victorious. Not solely did the court docket order State Farm to launch the reserve quantities, nevertheless it additionally ordered State Farm to pay all the legal professional charges incurred. 4
State Farm’s antagonistic and opposed posture on this matter was to their detriment. The jury discovered that State Farm was arbitrary, capricious, and with out possible trigger in failing to pay the quantities owed inside thirty or sixty days after receiving passable proof of loss. On the finish of the trial, the jury’s verdict in opposition to State Farm was staggering – $240,000 in damages for psychological anguish. Moreover, the jury awarded the octogenarian contractual damages as follows:
Dwelling $136,280.22
Different Buildings $12,212.00
Extra Dwelling Bills: $35,677.34
The entire contractual quantities the jury awarded whole $184,169.56. Penalties of fifty% below Louisiana Revised Statute 22:1982 could be assessed on that quantity, totaling $92,084.78. The entire contractual quantities owed and penalties mixed below regular circumstances could be $276,254.34. That might be a powerful verdict.
Nonetheless, on this case, contemplating the abhorrent impermissible conduct of State Farm in dealing with this declare throughout the adjustment interval and the litigation interval, that quantity could be inadequate to penalize the mega-insurer. The penalty afforded below §22:1973 5 is far more punitive, meant to forestall egregious conduct as demonstrated on this case by State Farm. Beneath §22:1973, the penalty is 2 occasions the precise consequential damages sustained by the policyholder, plus attorneys’ charges and prices. 6
Strategically, throughout post-trial litigation to calculate the penalty, legal professional charges and prices, the widow will doubtless advocate that State Farm pay penalties below §22:1973 of $480,000.00, which might improve the quantity of the decision for psychological anguish damages exponentially. Along with the legal professional charges and prices that the widow is entitled to below §22:1973, the decision communicated a transparent and distinct message – the citizenry and the juries within the State of Louisiana is not going to tolerate insurers partaking in dangerous religion conduct and conduct that shocks the conscience whether or not throughout the pre-litigation adjustment interval or throughout litigation.
Residential property harm attorneys who symbolize policyholders ought to scrutinize the facets of this case that will assist them buttress their dangerous religion claims in opposition to insurers in their very own circumstances. Hurricane claims attorneys who’re representing the insurers ought to take into account this a cautionary story in regards to the perils of partaking in dangerous religion adjustment and litigation ways with the policyholder, in addition to required studying for each senior adjuster who protects the insurers’ coffers by supporting or recommending such ways.
1 Sher v. Lafayette Ins. Co., 988 So. second 186 (La. 4/8/08), on reh’g partially (July 7, 2008).
2 Thibodeaux v. State Farm, No. 2:22-cv-06252, (W.D. La. February 13, 2025). [Rec. Doc. 125].
3 Thibodeaux, [Rec. Doc. 18, Exh. B].
4 Thibodeaux, [Rec. Doc. 21, 53].
5 Louisiana Revised Statute 22:1973 was repealed in 2024 however could be relevant as this litigation was filed previous to the repeal, and it’s substantive in nature.
6 Durio v. Horace Mann Ins. Co., 74 So.3d 1159 (La. 2011).
