Louisiana Injury Lawyer Blog

The property insurer must prove by a clear preponderance of the evidence, either direct or circumstantial, that the loss was of incendiary origin, and that the insured was the person responsible for the fire.

Since 1948, the expressed public policy of the State of Louisiana, by the Louisiana Legislature, has been that an insurable interest is required of persons seeking protection from property insurance, so as to differentiate an enforceable indemnity agreement from a wagering pact. La. R.S. 22:614 provides that no contract of insurance on property or any interest therein or arising therefrom shall be enforceable except for the benefit of persons having an insurable interest in the things insured. Insurable interest means any lawful and substantial economic interest in the safety or preservation of the subject of the insurance free from loss, destruction, or pecuniary damage.

Generally, the interest of the insured sought to be protected must have for its object the obviation of pecuniary or financial loss to or liability of the assured which would otherwise result from damage to or destruction of the insured property. If the loss or damage to the insured property does not expose the insured to either direct, immediate, or potential loss or liability, the insured is without insurable interest therein.

"In the absence of bad faith, a liability insurer generally is free to settle or to litigate at its own discretion, without liability to its insured for a judgment in excess of the policy limits. William Shelby McKenzie & H. Alston Johnson, III, 15 Louisiana Civil Law Treatise-Insurance Law and Practice § 218 (1986). On the other hand, a liability insurer is the representative of the interests of its insured, and the insurer, when handling claims, must carefully consider not only its own self-interest, but also its insured's interest so as to protect the insured from exposure to excess liability. Holtzclaw v. Falco, Inc., 355 So.2d 1279 (La.1978) (on rehearing). Thus, a liability insurer owes its insured the duty to act in good faith and to deal fairly in handling claims. Id." Smith v. Audubon Ins. Co., 679 So.2d 372 (La.1996).

"[T]he determination of whether the insurer acted in bad faith turns on the facts and circumstances of each case. Of course, an insurer is not obliged to compromise litigation just because the claimant offers to settle a claim for serious injuries within the policy limits, and its failure to do so is not by itself proof of bad faith. The determination of good or bad faith in an insurer's deciding to proceed to trial involves the weighing of such factors, among others, as the probability of the insured's liability, the extent of the damages incurred by the claimant, the amount of the policy limits, the adequacy of the insurer's investigation, and the openness of communications between the insurer and the insured. Nevertheless, when an insurer has made a thorough investigation and the evidence developed in the investigation is such that reasonable minds could differ over the liability of the insured, the insurer has the right to choose to litigate the claim, unless other factors, such as a vast difference between the policy limits and the insured's total exposure, dictate a decision to settle the claim." Id.

An insurer's duty to defend its insured is broader than its liability for damage claims. The insurer's duty to defend suits brought against its insured is determined by the allegations of the injured plaintiff's petition, with the insurer being obligated to furnish a defense unless the petition unambiguously excludes coverage. American Home Assurance Co. v. Czarniecki, 230 So.2d 253 (La.1970).

Once a petition states one claim within the policy's coverage, the insurer has a duty to accept defense of the entire lawsuit, even though other claims in the petition fall outside the policy's coverage. Ellis v. Transcontinental Ins. Co., 619 So.2d 1130 (La. App. 4th Cir.), writ denied, 625 So.2d 1043 (La.1993).

If the insurer chooses to represent the insured but deny coverage, it must employ separate counsel. If it fails to do so, the insurer is liable for attorney's fees and costs the insured may incur in defending the suit. Dugas Pest Control of Baton Rouge v. Mutual Fire, Marine and Inland Ins. Co., 504 So.2d 1051 (La.App. 1st Cir. 1987).

When an insurer, with knowledge of facts indicating noncoverage under the insurance policy, assumes or continues the insured's defense without obtaining a nonwaiver agreement to reserve its coverage defense and without providing separate counsel, the insurer waives such policy defense. Steptoe v. Masco Construction Co., 643 So.2d 1213 (La.1994).

Paul H. Dué of the Baton Rouge, Louisiana personal injury law firm of Dué, Price, Guidry, Piedrahita & Andrews has been selected for inclusion in Best Lawyers in America for 2012. For 2012, Dué has been recognized in four categories, including Personal Injury Litigation and Product Liability Litigation. Dué has been recognized by Best Lawyers every year since 1995.

Donald W. Price of the Baton Rouge, Louisiana personal injury and medical malpractice law firm of Dué, Price, Guidry, Piedrahita & Andrews has been selected for inclusion in Best Lawyers in America for 2012. Price has been recognized in two categories: Personal Injury Litigation and Medical Malpractice Litigation. Price was also selected by Best Lawyers as the Medical Malpractice 2012 Lawyer of the Year for Baton Rouge, Louisiana.

At its annual meeting in Natchitoches, Louisiana, the Northwestern State University Foundation Board of Directors elected Scott Andrews as its Secretary for the 2012-2014 term. Scott Andrews, an attorney at Dué, Price, Guidry, Piedrahita & Andrews in Baton Rouge, Louisiana, graduated from Northwestern State University in 1992 after serving as Student Government Association President. Scott Andrews has served on the NSU Foundation Board since 2003, having previously served a three year term on the NSU Alumni Association Board. The NSU Foundation Board serves the University, its students and its faculty, through fundraising and by promoting the educational and cultural welfare of the University.

For insurance policy language which limits coverage to "accidents which occur during the policy period", the loss occurs at the time the tort is committed, and not when the loss is discovered or becomes manifest. Audubon Coin & Stamp Co. v. Alford Safe & Lock Co., 230 So.2d 278 (La.App. 1st Cir. 1969).

In determining whether the loss was caused by "accident," the loss must be examined from the viewpoint of the person injured and if the injury was unforeseen, unexpected, and extraordinary it must be held to have been caused by "accident." Id.

The standard commercial general liability policy contains "work-product" exclusions. "These exclusions reflect the intent of the insurance industry to avoid the possibility that coverage under a CGL policy will be used to repair and replace the insured's defective products and faulty workmanship." McKenzie & Johnson, 15 La. Civil Law Treatise, Insurance Law and Practice, 3d, p.555.

For insurance policy language which limits coverage to "damage which occurs during the policy period," there is no coverage for damages accidentally occurring after the policy expiration, but resulting from a delictual act committed during the policy period. Oceanonics, Inc. v. Petroleum Distributing Company, 292 So.2d 190 (La.1974).

"Claims Made" policy: coverage is effective only if the negligent harm is discovered and reported within the policy term.

"Occurrence" policy: coverage is effective if the negligent harm occurs within the policy period, regardless of the date of discovery.

Livingston Parish School Board v. Fireman's Fund American Insurance Co., 282 So.2d 478 (La.1973).

"One of the seminal statements on the subject of distinguishing claims-made from occurrence policies was:

With the development of a more complex society, it became more reasonable, particularly with respect to the activities of professionals, to insure against the making of claims, rather than the happening of occurrences, and "claims made" insurance developed to meet a need for professionals to insure against the making of a claim as the insured event, rather than having to struggle with traditional concepts and difficulties inherent in determining whether the "event" insured against was the commission of an act, error or omission or the date of discovery thereof or the date of injury caused thereby.

The major distinction between the "occurrence" policy and the "claims made" policy constitutes the difference between the peril insured. In the "occurrence" policy, the peril insured is the "occurrence" itself. Once the "occurrence" takes place, coverage attaches even though the claim may not be made for some time thereafter. While in the "claims made" policy, it is the making of the claim which is the event and peril being insured and, subject to policy language, regardless of when the occurrence took place. Sol Kroll, The Professional Liability Policy "Claims Made," 13 Forum 842, 843 (1978)."

No person can insure against his own intentional acts. Public policy forbids it. But public policy does not forbid one to insure against the intentional acts of another for which he may be vicariously liable.

If the exclusionary language in the personal liability insurance policy applies to the intent of "the" insured, then only the intent of "the" person for whom coverage is sought for his/her vicarious liability under the policy will be dispositive, rather than the intent of the intentional actor for whom the person for whom coverage is sought is vicariously liable, and coverage will not be excluded. However, if the exclusionary language in the policy applies to "an" or "any" or "one or more" insureds, then the intent of the intentional actor will be dispositive and coverage will be excluded.

See McBride v. Lyles, 303 So. 2d 795 (La.App. 3d Cir. 1974) ("the" insured); Lamkin v. Brooks, 498 So.2d 1068 (La. 1986) ("any" insured); Travelers Ins. Co. v. Blanchard, 431 So.2d 913 (La.App. 2d Cir.1983) ("an" insured); and Leslie v. Andrews, 905 So.2d 368 (La.App. 4th Cir. 2005), writ denied, 901 So.2d 1077 (La.2005) ("one or more" insureds).

The intentional injury exclusion for injuries of a "a different kind or degree" or sustained by a "different person or property, than intended or expected" in personal liability insurance policies is enforceable and excludes coverage even if the seriousness of the injury is not intended expected or if a different person is injured than intended or expected. See Simpson v. Angel, 598 So.2d 584 (La.App. 4th Cir.), writ denied, 605 So.2d 1091 (La.1992).

When determining whether the intentional injury exclusion -- "willful and malicious acts of any insured" -- will preclude coverage in a personal liability insurance policy, it is immaterial whether the insured intended the actual resulting injuries.

The act is "willful" if the actor has intentionally done an act of unreasonable character in reckless disregard of the risk known to him, or so obvious that he must be taken to have been aware of it, and so great as to make it highly probable that harm would follow. It is usually accompanied by a conscious indifference to consequences, amounting almost to a willingness that harm should follow.

"Malicious" is characterized by, or involving, malice; having, or done with, wicked or mischievous intentions or motives; wrongful and done intentionally without just cause or excuse.

Keatley v. State Farm Fire & Cas. Ins. Co., 594 So.2d 963 (La. App. 3d Cir. 1992).

When determining whether the intentional injury exclusion -- "expected or intended from the standpoint of the insured" -- will preclude personal liability insurance coverage, the subjective intent of the insured, as well as his reasonable expectations as to the scope of his insurance coverage, will determine whether an act is intentional. An act is intended if the perpetrator desires the results of his action or he believes that the results are substantially certain to occur. The insured's subjective intent or expectation must be determined not only from the insured's words before, at the time of, and after the pertinent conduct, but from all the facts and circumstances bearing on such intent or expectation. Breland v. Schilling, 550 So.2d 609 (La.1989). See also, Great American Ins. Co. v. Gaspard, 608 So.2d 981 (La.1992). In Breland, the Louisiana Supreme Court held:

We hold, therefore, that when minor bodily injury is intended, and such results, the injury is barred from coverage. When serious bodily injury is intended, and such results, the injury is also barred from coverage. When a severe injury of a given sort is intended, and a severe injury of any sort occurs, then coverage is also barred. But when minor injury is intended, and a substantially greater or more severe injury results, whether by chance, coincidence, accident, or whatever, coverage for the more severe injury is not barred. Whether a given resulting bodily injury was intended "from the standpoint of the insured" within these parameters is a question of fact. Such factual determinations are the particular province of the trier of fact, in this instance the trial jury. Breland, 550 So.2d at 614.