Third-Party Criminal activity: Is Summary Judgment Available in a Premises Liability case?

Imagine you are visiting family during the holidays. As a favor, you take a family member’s vehicle to the gas station for a fill-up. While in transit, you get into an accident where you are at fault. Does your insurance policy provide coverage for the accident?

According to La. R.S. 22:1296.1, a new statute that went into effect on August 1, 2022, the answer to this question is “yes,” your insurance may afford coverage under these facts.

La. R.S. 22:1296.1 now requires insurance policies issued in Louisiana to provide coverage when the driver insured under the policy operates a non-owned vehicle with the express or implied permission of the vehicle’s owner. The statue was enacted to declare a new public policy regarding this issue and was passed in response to the Louisiana Supreme Court’s decision in Landry v. Progressive Security Insurance Company, 2021-00621 (La. 1/28/22), reh'g denied, 2021-00621 (La. 3/25/22); 338 So.3d 1162.

The Landry case involved a motor vehicle accident that occurred as the defendant-driver, as a favor to the vehicle’s owner, drove the vehicle to a tire shop to repair a tire. The plaintiffs brought an action against the defendant-driver, the driver’s insurer, and the insurer of the vehicle that he drove at the time of the collision.

The Louisiana Supreme Court upheld a provision in the driver’s policy that stated coverage under such circumstances was only available when the driver’s own vehicle was out of service. Because the driver’s vehicle was not out of service, no coverage was found under the driver’s policy. In so holding, the Landry court found that public policy did not require automobile insurance liability coverage for a driver’s negligent operation of a non-owned vehicle.

The Louisiana legislature enacted La. R.S. 22:1296.1 in response to the Landry decision. The statute provides that an insurer writing automobile liability, uninsured, underinsured, or medical payments coverage shall not exclude the benefits of such coverage under its policy to an insured operating a non-owned vehicle if all of the following requirements are satisfied:

• The coverage is in full force and effect.
• The insured is operating a vehicle owned by another with the express or implied permission of the vehicle’s owner.
• The non-owned vehicle that is being operated by the insured is not provided, furnished, or available to the insured on a regular basis.

The statute also provides this coverage is secondary to the vehicle owner's insurance policy. Furthermore, if the coverage provided under the statute is included within the coverage provided pursuant to La. R.S. 22:1296, which addresses coverage for temporary, substitute, and rental vehicles, the provisions of La. R.S. 22:1296 determine which coverage is primary. (For additional information regarding La. R.S. 22:1296 click here.) [Sophia, please include link to blog from 5/25/22].

Let’s return to real life scenarios like those we addressed above. Perhaps you are blocked in at a party, so a friend tosses you the keys to move their car, or, like the situation in Landry, maybe you are trying to do a good deed by driving your parents’ car to a gas station for a fill-up when an accident occurs. While it remains to be seen how courts will interpret this statute in these circumstances, under the new legislation, these actions may now implicate coverage under your insurance policy.

Case Reference: Landry v. Progressive Security Insurance Company, 2021-00621 (La. 1/28/22), reh'g denied, 2021-00621 (La. 3/25/22); 338 So.3d 1162.

Courts around Louisiana continue to address factual scenarios for when summary judgment on an insured’s first party bad faith claim may be appropriate.

In Creamer Brothers Inc. et al. v. General Casualty Co. of Wisconsin, the federal court for the Western District of Louisiana addressed an insured’s claim for bad faith penalties and attorney’s fees arising out of an insurance claim for damages sustained in a February 2021 ice storm. The pertinent timeline is as follows:

• February 22, 2021: Date of Loss/Ice Storm
• February 26, 2021: Adjuster inspects property
• April 9, 2021: Adjuster completes estimate
• April 15, 2021: Insurer issues payment
• August 6, 2021: Insured submits damages estimate
• August 26, 2021: Insurer reinspects property with engineer
• September 24, 2021: Engineer submits report to Insurer
• October 7, 2021: Insurer prepares new estimate
• October 11, 2021: Insurer tenders supplemental payment
• October 12, 2022: Suit filed

The insurer argued summary judgment was appropriate because its damage assessment created a reasonable, well-founded dispute regarding the extent of damage caused by the ice storm. Plaintiff disagreed, arguing bad faith attached because the insurer relied solely on its own expert reports which they argued amounted to an investigation that was so inadequate it could be deemed unreasonable.

The Court sided with the insurer, granting its summary judgment. In so holding, the Court relied on the portion of La. R.S. 22:1892 which provides an insurer’s conduct must be “arbitrary, capricious, or without probable cause” for bad faith to attach. Specifically, the Court stated, “the fact that the parties’ experts reached different conclusions in their respective assessments gives rise to a dispute in the extent of Plaintiffs’ coverage, but does not illustrate a genuine issue of fact as to General Casualty’s ‘bad faith.’”

The Court noted the insurer sufficiently communicated with the insured, provided the insured with multiple expert reports containing their data and conclusions, and “ultimately made payments to Plaintiffs in accordance with those conclusions.” Plaintiff failed to point to evidence General Casualty’s conduct was arbitrary, capricious, or without probable cause, “despite yielding unsatisfactory results.”

In a case out of the Eastern District, Gentilly, LLC v. State Farm Fire & Cas. Co., the Court similarly relied on plaintiff’s failure to establish a general issue of material fact to show the insurer’s conduct was “arbitrary, capricious, or without probable cause.” The Gentilly case arose out of the plaintiff’s insurance claim for damages sustained to its commercial shopping center during Hurricane Ida. The parties engaged in a series of inspections, estimates, expert reports, payments, and supplemental payments over the course of about thirteen months, followed by several months of inactivity, then another period of investigation and adjustment over the course of about nineteen months.

Plaintiff argued the insurer’s 43-day delay in its first payout, failure to have an engineer inspect the property for a year, and gross under-evaluation of the damages as evidenced by its supplemental tender supported its bad faith claim. The Court disagreed.

In support of its conclusion, the Court noted the insurer advised plaintiff the inspection would take multiple days, and the delay in issuing payment arose out of the inspectors’ availability. The Court noted the insurer’s actions were “consistently in line with its expert appraisals.” In conclusion, the Court stated, “[t]hough the payout process was protracted by the scope and complexity of the insured loss, plaintiff fails to raise a genuine issue of material facts indicating that State Farm’s actions were arbitrary, capricious, or without probable cause.”

Louisiana courts have not established a bright-line rule for determining when summary judgment is appropriate on an insured’s bad faith claim. However, these cases seem to suggest that continued adjustment over a period of time may not give rise to bad faith claims where an insured cannot cite to evidence an insurer’s conduct was “arbitrary, capricious, or without probable cause.”

References:

Creamer Brothers Inc. et al. v. General Casualty Co. of Wisconsin, No. 22-cv-6110, 2025 WL 818579 (W.D. La. Mar. 13, 2025).

Gentilly, LLC v. State Farm Fire & Cas. Co., No. 23-cv-262, 2024 WL 5246606 (E.D. La. Dec. 30, 2024).

The Louisiana Supreme Court in Petit- Blanc vs. Charles and State Farm, 2021-CC-00094 (La. 4/20/21), ____ So. 3d ______ reaffirmed a strict reading of La. R.S. 13:850. This statute allows the filing of pleadings with a Clerk of Court by facsimile transmission. As currently drafted, the statute provides that the parties shall “deliver” the original document to the clerk within 7 days of the facsimile transmission. In Petit-Blanc, the Supreme Court considered what happens when the original pleading is sent through the mail but not received by the clerk within the 7-day period. Under the facts of the case, the plaintiff’s suit would be prescribed if the act of mailing was insufficient delivery.

Citing Black’s Law Dictionary, the Court found that “delivery” is defined as “the act by which the res or substance thereof is placed within the actual or constructive possession or control of another.” The Court concluded that “merely transmitting an original document within the deadline is insufficient; rather, a litigant must establish the document was delivered to the clerk within the deadline.”

The Court noted that, while the plaintiff established she sent her original petition to the clerk’s office well within the 7-day deadline, “she cannot establish the petition was placed in the actual or constructive possession of the clerk’s office” in a timely manner. As such, the Court found that the “facsimile filing is without force and effect and could not serve to interrupt the prescriptive period.” Accordingly, the Supreme Court granted the writ filed by the defendants, maintained their peremptory exception of prescription, and dismissed the plaintiff’s lawsuit with prejudice.