Insurance company loses appeal, must pay for damages on foreclosed home

NEW ORLEANS – An insurance company lost an appeal in the U.S. Court of Appeals for the Fifth Circuit concerning a bankruptcy and district court’s judgment in favor of a bank.

In 2009, Liberty Mutual was the insurer for property owners who were undergoing bankruptcy and the subsequent foreclosure of their home. Before they evacuated the home, the owners allegedly caused damage to the property, resulting in a $112,247.66 loss. Lamesa National Bank filed suit against Liberty Mutual, claiming it was liable for the damage because it was the insurer at the time for the trustee.

Both the bankruptcy and district court sided with Lamesa National Bank, arguing that Lamesa’s actions were not time-barred.

In a per curiam opinion, Circuit Judges Carolyn Dineen King, W. Eugene Davis and  Jennifer Elrod affirmed the district court’s decision.

Case no. 12-10677.