Ehrenberg et al v. State Farm Fire and Casualty Company, No. 2:2018cv03406 - Document 12 (E.D. La. 2019)
Court Description: ORDER granting 9 Motion to Dismiss plaintiffs' claims for punitive damages and attorney's fees. Plaintiffs' claims for punitive damages and attorney's fees are DISMISSED WITH PREJUDICE. Signed by Judge Sarah S. Vance on 4/3/2019. (cg)
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Ehrenberg et al v. State Farm Fire and Casualty Company Doc. 12 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA TINA EHRENBERG ET AL. VERSUS CIVIL ACTION NO. 18-340 6 STATE FARM FIRE AND CASUALTY COMPANY SECTION “R” (4) ORD ER AN D REASON S Before the Court is defendant’s m otion to dism iss plaintiffs’ claims for penalties and attorney’s fees. The Court grants the m otion because plaintiffs have not alleged that defendant acted in an arbitrary and capricious manner. I. BACKGROU N D This case arises from a fire on February 13, 20 16. 1 Plaintiffs Tina and Harold Ehrenberg allege that the fire caused serious damage to their home and property. 2 Plaintiffs allege that they held a homeowner’s insurance policy with defendant State Farm Fire and Casualty Com pany, and that the policy was in effect at the tim e of the fire. 3 After the fire, plaintiffs filed a claim with State Farm . 4 According to plaintiffs, the parties reached an 1 2 3 4 R. Doc. 1-2 at 1 ¶ 4. Id. Id. ¶¶ 2-3. Id. ¶ 5. Dockets.Justia.com agreement as to the am ount of plaintiffs’ claim for im m ovable property on November 28, 20 16. 5 But the parties allegedly have not yet resolved the contents portion of plaintiffs’ claim . 6 On February 9, 20 18, plaintiffs filed a petition for dam ages in Louisiana state court. 7 Plaintiffs seek dam ages for all allowable am ounts, as well as costs and attorney’s fees. 8 On March 29, 20 18, defendant removed the case to this Court. 9 Defendant then filed a m otion to dism iss plaintiffs’ dem and for punitive dam ages and attorney’s fees. 10 Plaintiffs did not respond to the m otion. II. LEGAL STAN D ARD To survive a Rule 12(b)(6) m otion, a party m ust plead “sufficient factual m atter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (20 0 9) (quoting Bell Atl. Corp. v. Tw om bly , 550 U.S. 544, 570 (20 0 7)). A claim is facially plausible when the party pleads facts that allow the court to “draw the reasonable inference 5 6 7 8 9 10 Id. at 2 ¶ 6. Id. ¶ 7. R. Doc. 1-2. Id. at 2 ¶ 8. R. Doc. 1. R. Doc. 9. 2 that the defendant is liable for the m isconduct alleged.” Id. at 678. A court m ust accept all well-pleaded facts as true and m ust draw all reasonable inferences in favor of the nonm oving party. See Lorm and v. US Unw ired, Inc., 565 F.3d 228, 232 (5th Cir. 20 0 9). A legally sufficient com plaint m ust establish m ore than a “sheer possibility” that the party’s claim is true. Iqbal, 556 U.S. at 678. It need not contain detailed factual allegations, but it m ust go beyond labels, legal conclusions, or form ulaic recitations of the elem ents of a cause of action. Id. In other words, the face of the com plaint m ust contain enough factual m atter to raise a reasonable expectation that discovery will reveal relevant evidence of each elem ent of the party’s claim . Lorm and, 565 F.3d at 257. The claim m ust be dism issed if there are insufficient factual allegations to raise a right to relief above the speculative level, Tw om bly , 550 U.S. at 555, or if it is apparent from the face of the com plaint that there is an insuperable bar to relief, Jones v. Bock, 549 U.S. 199, 215 (20 0 7). III. D ISCU SSION Punitive dam ages are prohibited under Louisiana law unless authorized by statute. W arren v. Shelter Mut. Ins. Co., 233 So. 3d 568, 586 (La. 20 17) (“It is well-settled in Louisiana that punitive dam ages are available 3 only where authorized by statute.”). Two statutes allow plaintiffs to recover punitive dam ages when insurers arbitrarily or capriciously fail to pay a claim. See La. Rev. Stat. §§ 22:1892, 22:1973. Plaintiffs m ay also recover attorney’s fees under Section 1892. La. Rev. Stat. § 22:1892(b)(1). Statutory penalties are not warranted when the insurer has a reasonable basis to defend the claim and acts in good-faith reliance on that defense. Reed v. State Farm Mut. Auto Ins. Co., 857 So. 2d 10 12, 10 21 (La. 20 0 3). The bad faith statutes are penal in nature and m ust be strictly construed. Id. at 10 20 . Section 1892 requires that an insurer pay claim s or m ake an offer of settlement within thirty days of receipt of a satisfactory proof of loss. La. Rev. Stat. § 22:1892. In order to recover under Section 1892, a claim ant m ust dem onstrate “that (1) an insurer has received satisfactory proof of loss, (2) the insurer fail[ed] to tender payment within thirty days of receipt thereof, and (3) the insurer’s failure to pay is arbitrary, capricious or without probable cause.” La. Bag Co., Inc. v. Audubon Indem . Co., 999 So. 2d 110 4, 1112-13 (La. 20 0 8). The Louisiana Suprem e Court has interpreted “arbitrary and capricious” to m ean “vexatious” or “unjustified, without reasonable or probable cause or excuse.” Id. at 1114 (quoting Reed, 857 So. 2d at 10 21). Section 1973 requires that insurers adhere to a standard of good faith and fair dealing. La. Rev. Stat. § 22:1973. An insurer breaches its duty of 4 good faith if it m isrepresents pertinent facts, fails to pay a settlement within thirty days, denies coverage without notice or consent, misleads a claim ant as to the applicable prescriptive period, fails to pay a claim within sixty days of a satisfactory proof of loss arbitrarily or capriciously, or fails to pay under Section 1893 arbitrarily or capriciously. Id. Courts have recognized that “[t]he conduct prohibited by the two sections is ‘virtually identical.’” Hibbets v. Lexington Ins. Co., 377 Fed. App’x 352, 355 (5th Cir. 20 10 ) (quoting Reed, 857 So. 2d at 10 20 ). Plaintiffs’ com plaint contains no allegations that defendant has acted in an arbitrary and capricious m anner or violated the requirem ents of either statute. Plaintiffs m erely allege that “the contents portion of this fire claim has not yet been resolved.”11 Indeed, plaintiffs have asserted neither that they filed a valid proof of loss, nor that State Farm failed to pay within the statutorily required tim efram e. Plaintiffs also have not filed an opposition to defendant’s m otion to dism iss their claim s for punitive dam ages and attorney’s fees. Accordingly, the Court finds that plaintiffs have failed to state a claim under Sections 1892 or 1973. 11 R. Doc. 1-2 at 2 ¶ 7. 5 IV. CON CLU SION For the foregoing reasons, defendant’s m otion to dism iss plaintiffs’ claim s for punitive dam ages and attorney’s fees is GRANTED. Plaintiffs’ claim s for punitive dam ages and attorney’s fees are DISMISSED WITH PREJ UDICE. New Orleans, Louisiana, this _ _3rd _ _ _ day of April, 20 19. _____________________ SARAH S. VANCE UNITED STATES DISTRICT J UDGE 6
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