NEW ORLEANS – A judge in U.S. District Court for the Eastern District of Louisiana found that Hartford Fire Insurance Co. could not justify its failure to pay a client on time after a fire, according to court documents filed May 18.
The legal issues between Kief Hardware and Hartford began after the plaintiff’s property in Cut Off was damaged in a Sept. 9, 2015, fire. The Lafourche Parish Fire District responded to the fire and informed the State Fire Marshal, which determined the incident was not due to arson and closed its investigation June 22,
2016.
Kief sued the insurance company in hopes of regaining unpaid losses, damages, penalties and attorney fees. Both parties filed a motion for partial summary judgment against each other. in his May 18 ruling, U.S. District Judge Jay C. Zainey explained why the court granted Kief’s motion and denied Hartford's motion.
The court pointed out while it was undisputed the plaintiff was entitled to $375,935.96, the total includes a business personal property damage payment of $62,890.71 that was paid on Feb. 2, 2016, and a building coverage payment of $313,045.25 that was paid on Feb. 25. Hartford’s adjuster submitted the reports no later than Oct. 21, 2015, meaning the payments were not made until 104 days and 127 days after the company received sufficient proof of damage. Louisiana revised statutes require an insurer to pay the amount within 30 days of receiving the sufficient proof.
The court stated the payment delay means Kief is owed penalties and attorney fees. Hartford argued in its own motion for partial summary judgment that the investigation was not complete until June 22, 2016, so it paid the amount four months ahead of time. The insurance company also said an internal error was a factor in the delay. Hartford corrected the error and changed the policy on Jan. 29,2016, and paid it within 30 days of that date.
Still, the court determined, “Hartford’s failure to pay the undisputed portion of plaintiff’s claim was without probable cause.” It ruled the plaintiff was owed half of the original amount, which totals $187,967.98. It also stated Hartford will be “subject to penalties” if the plaintiff can show that it owes more property damages.
In conclusion, the court granted the plaintiff’s motion for partial summary and denied the defendant’s motion for partial summary.