Osteen v. Federal Insurance Company, et al

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
KRISTIE OSTEEN 	CIVIL ACTION
VERSUS 	NO. 24-1189
FEDERAL INSURANCE CO., ET AL. 	SECTION: D(5)
REASONS FOR ORDER
Before 	the 	Court 	is 	a 	Motion 	for 	Partial 	Summary 	Judgment 	filed 	by
Defendants Federal Insurance Company and Chubb Insurance Solutions Agency,
Inc.1 Plaintiff Kristie Osteen has filed a Response,2 and Defendants have filed a
Reply.3 After careful consideration of the parties’ memoranda, the record, and the
applicable law, the Court advised the parties during the Pretrial Conference that it
GRANTS in part and DENIES in part Defendants’ Motion. These written reasons
follow.
I. 	FACTUAL AND PROCEDURAL BACKGROUND4
This case arises from a plumbing event at Plaintiff Kristie Osteen’s home,
which is located at 6010 Coliseum Street in New Orleans.5 On March 10, 2022, a
screw in a pot filler located over the Plaintiff’s stove broke, and water sprayed
1 R. Doc. 44.
2 R. Doc. 45.
3 R. Doc. 48.
4 The Court draws the factual allegations from the Defendants’ Statement of Uncontested Facts, which
the Court accepts as true, except for those to which Plaintiff objected in her Statement of Genuinely
Disputed Material Facts. L.R. 56.2 (“All material facts in the moving party’s statement will be deemed
admitted, for purposes of the motion, unless controverted in the opponent’s statement.”). The Court
also supplements Defendants’ Statement of Uncontested Facts and Plaintiff’s Statement of Genuinely
Disputed Material Facts with allegations from Plaintiff’s original state court Petition. (R. Doc. 1-2).
The Court uses those facts for context and does not afford them the benefit of the truth.
5 R. Doc. 44-11 at ¶ 1.
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throughout the Plaintiff’s kitchen and adjoining rooms as a result.6 Plaintiff was not
at home when the screw broke, and when she returned hours later, she turned off the
water supply in the house to stop the water from continuing to spray.7
The property was insured under Federal Insurance Company (“Federal”)
Policy No. 14830389-01, which was issued by Chubb Insurance (“Chubb”).8 Plaintiff
filed a claim with Chubb, which sent an adjuster to inspect the property on March 22,
2022.9 The adjuster issued an initial estimate of the loss of $78,377.41 in April 2022. 10
On May 2, 2022, Federal issued a payment of $25,041.12 for mitigation costs, and
Federal issued a subsequent check for $153,283.70.11 On this claim, Federal has paid
a total of $701,188.56, with $452,144.73 paid to the Plaintiff for damage to the house,
its contents, and for debris removal and $249,043.83 paid for additional living
expenses (“ALE”).12 Plaintiff returned to the property in April 2025.13
Plaintiff filed suit against Defendants in Civil District Court for the Parish of
Orleans on May 8, 2024; the case was removed to this Court on May 9, 2024.14 In her
petition, Plaintiff alleges that Defendants delayed or refused payment for appliances,
cabinetry, and ALE and as a result Plaintiff seeks, among other claims, penalties and
6 R. Doc. 1-2 at ¶ 6.
7 Id. at ¶ 7.
8 R. Doc. 44-11 at ¶ 1.
9 Id. at ¶ 3.
10 Id.; see R. Doc. 45-4 at p. 2.
11 See R. Doc. 44-11 at ¶ 4, fn. 4; R. Doc. 45-1 at ¶ 4.
12 R. Doc. 44-11 at ¶ 5.
13 Id. at ¶ 12.
14 R. Doc. 1 and 1-2.
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fees under La. R.S. §§ 22:1892 and 22:1973, additional living expenses beyond March
31, 2024, and general damages, including for mental anguish.15
Defendants move for partial summary judgment on three of Plaintiff’s claims:
(1) extra-contractual damages under La. R.S. §§ 22:1892 and 22:1973; (2) ALE that
were accrued after March 31, 2024; and (3) general damages for emotional distress.16
As to the claim for extra-contractual damages, Defendants argue that Plaintiff’s bad
faith claim must fail because she failed to provide satisfactory proof of loss to the
Defendant insurers.17 Additionally, Defendants argue that even if the Plaintiff had
shown a satisfactory proof of loss, Plaintiff cannot carry her burden to prove that
Defendants acted arbitrarily, capriciously, or without probable cause in failing to
remit payment to her.18 Regarding the claim for ALE after March 2024, Defendants
contend that the insurance policy clearly states that there was a two-year cap on ALE
and thus that the Plaintiff cannot recover for ALE incurred after March of 2024. 19
Lastly, Defendants argue that Plaintiff’s emotional distress claim fails because the
claim is derivative of the claim of bad faith for which Plaintiff has failed to establish
Defendants’ liability.20 Furthermore, Defendants aver that Plaintiff has presented no
objective evidence of compensable mental anguish such that the claim can survive
summary judgment.21
15 Id.; R. Doc. 44-11 at ¶ 6.
16 R. Doc. 44 at p. 1.
17 R. Doc. 44-1 at p. 11.
18 Id. at p. 15.
19 Id. at pp. 18-19.
20 Id.
21 Id. at pp. 19-20.
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Plaintiff responds that there are genuine issues of material fact that preclude
summary judgment on all three claims identified by Defendants’ Motion. Plaintiff
contends that there are genuine issues of material fact regarding Defendants’ alleged
violation of the duty of good faith and fair dealing by failing to timely pay the amount
of a claim after having received satisfactory proof of loss.22 Regarding the claim for
ALE that was accrued after March 2024, Plaintiff argues that there are questions of
material fact regarding the remaining amount of available funds up to the policy’s
limit for ALE costs incurred and that ALE post-March 2024 could be an additional
measure of damages under La. R.S. § 22:1973.23 Lastly, Plaintiff contends that she
has presented evidence that demonstrate a compensable claim for mental anguish
caused by the uncertainty and emotional stress of her situation.24
Defendants reply that in response to their Motion, Plaintiff has not presented
competent evidence to rebut the granting of summary judgment on the claims at
issue. Regarding the claims for penalties under §§ 22:1892 or 22:1973, Defendants
contend that the undisputed records demonstrate an ever-evolving 	adjustment
process regarding Plaintiff’s insurance claims.25 Defendants argue that Plaintiff has
failed to present evidence that establishes her entitlement to ALE beyond March 2024
because of the ALE limits both in scope and in time.26 Lastly, Defendants reiterate
22 R. Doc. 45 at pp. 14-15.
23 Id. at pp. 21-23
24 Id. at pp. 24-26.
25 R. Doc. 48 at pp. 5-6.
26 Id. at pp. 9-10.
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that the emotional distress claim must fail because Plaintiff has failed to provide
adequate proof of the distress as well as proof that Defendants caused that distress.27
II. 	LEGAL STANDARD
Summary judgment is appropriate under Federal Rule of Civil Procedure 56
“if the movant shows that there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.”28 A dispute is “genuine” if it is
“real and substantial, as opposed to merely formal, pretended, or a sham.”29 Further,
a fact is “material” if it “might affect the outcome of the suit under the governing
law.”30 	When assessing whether a genuine dispute regarding any material fact
exists, the Court considers “all of the evidence in the record but refrain[s] from
making credibility determinations or weighing the evidence.”31 While all reasonable
inferences must be drawn in favor of the nonmoving party, a party cannot defeat
summary judgment with conclusory allegations, unsubstantiated assertions, or “only
a scintilla of evidence.”32 Instead, summary judgment is appropriate if a reasonable
jury could not return a verdict for the nonmoving party.33
If the nonmoving party will bear the burden of proof at trial on the dispositive
issue, the moving party may satisfy its burden by merely pointing out that the
27 Id. at pp. 4-5.
28 F ED. R. CIV . P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 247 (1986).
29 Bazan ex rel. Bazan v. Hidalgo Cnty., 246 F.3d 481, 489 (5th Cir. 2001) (citing Wilkinson v. Powell,
149 F.2d 335, 337 (5th Cir. 1945)).
30 Anderson, 477 U.S. at 248.
31 Delta & Pine Land Co. v. Nationwide Agribus. Ins. Co., 530 F.3d 395, 398–99 (5th Cir. 2008) (citation
modified).
32 Id. (quoting Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994)) (citation modified).
33 Id. at 399 (citing Anderson, 477 U.S. at 248).
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evidence in the record is insufficient with respect to an essential element of the
nonmoving party’s claim.34 The burden then shifts to the nonmoving party who must
go beyond the pleadings and, “by her own affidavits, or by the ‘depositions, answers
to interrogatories, and admissions on file,’ designate ‘specific facts showing that there
is a genuine issue for trial.’”35
III. 	ANALYSIS
(1) There is a Genuine Dispute of Material Fact Regarding Plaintiff’s Bad
Faith Claims.
Defendants argue that they are entitled to summary judgment on Plaintiff’s
bad faith claims because (1) Plaintiff cannot prove that she provided Defendants with
satisfactory proof of loss and (2) Plaintiff cannot prove that the alleged failure to pay
was arbitrary, capricious, or without probable cause. Plaintiff responds that whether
she provided the Defendants with satisfactory proof of loss is a fact-intensive inquiry
and that the facts here are in dispute.36 Furthermore, she asserts that if the amount
of 	the 	loss 	is 	disputed, 	controlling 	precedent 	requires 	insurers 	to 	tender 	the
uncontested amount to the insured.37 Defendants reply that they continued to adjust
the claim in good faith as scope and pricing evolved during the claims process and
that their actions do not meet the required standard under La. R.S. §§ 22:1892 and
22:1973.38
34 See Celotex, 477 U.S. at 322–23.
35 Id. at 324 (quoting F ED. R. CIV . P. 56(e)).
36 R. Doc. 45 at pp. 14-15.
37 Id. at p. 16.
38 R. Doc. 48 at pp. 7-8.
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A claim for statutory bad-faith penalties under Louisiana Revised Statutes
§§22:1892 and 1973 requires the insured to make a showing that “(1) an insurer has
received satisfactory proof of loss, (2) the insurer fails to tender payment within thirty
days of receipt thereof, and (3) the insurer's failure to pay is arbitrary, capricious or
without probable cause.”39 These statutes are penal in nature and are to be strictly
construed by the courts.40 A satisfactory proof of loss under the statute is one “that
which is sufficient to fully apprise the insurer of the insured's claim.”41 Whether the
insured has provided satisfactory proof of loss is a question of fact.42 Demonstrating
that satisfactory proof of loss has been provided is “a necessary predicate to a showing
that 	the 	insurer 	was 	arbitrary, 	capricious 	or 	without 	probable 	cause.”43 	The
Louisiana Supreme Court has held that the phrase “arbitrary, capricious, or without
probable cause” is synonymous with “vexatious,” which means that the delay or
refusal to pay was “unjustified, without reasonable or probable cause or excuse.”44
The Court agrees with Plaintiff that the determination of whether satisfactory
proof of loss was provided by the insured to the insurer is a fact-intensive inquiry that
is not appropriately resolved on summary judgment in this matter. Louisiana courts
have found “proof of loss” to be a “flexible requirement” that is “not required to be in
any formal style.”45 The Court agrees with Plaintiff that even an insurance company
39 Louisiana Bag Co. v. Audubon Indem. Co., 999 So. 2d 1104, 1112–13 (La. 12/2/08).
40 Sanders v. Wysocki, 631 So. 2d 1330, 1335 (La. Ct. App.), writ denied, 637 So. 2d 156 (La. 1994).
41 McDill v. Utica Mut. Ins. Co., 475 So. 2d 1085, 1089 (La. 1985).
42 Anco Insulations, Inc. v. Nat'l Union Fire Ins. Co. of Pittsburgh, Pa., 787 F.3d 276, 286 (5th Cir.
2015).
43 Hart v. Allstate Ins. Co., 437 So. 2d 823, 828 (La. 1983).
44 Louisiana Bag Co. v. Audubon Indem. Co., 999 So. 2d 1104, 1114 (La. 12/2/08) (quoting Reed v. State
Farm Auto. Ins. Co., 857 So.2d 1012, 1020-21 (La.10/21/03)).
45 Sevier v. U.S. Fid. & Guar. Co., 497 So. 2d 1380, 1384 (La. 1986).
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adjuster’s personal inspection of the insured’s damaged property could constitute
satisfactory proof of loss.46 The Court also agrees with Defendants that depending on
the scope and causation of the event giving rise to the claim, an adjuster’s inspection
might not constitute satisfactory proof of loss because “of the enormity and scope of
the damage.”47 There exists a genuine issue of material fact as to when satisfactory
proof of loss was provided. Without determining when the satisfactory proof of loss
was provided by the insured to the insurer, the 30-day statutory timeframe cannot be
calculated under the statute.
Because demonstration of a satisfactory proof of loss is a predicate to a showing
that the insurer was acting in a manner that was arbitrary, capricious, or without
probable cause and because the Court finds that there is a genuine issue of material
fact regarding when satisfactory proof of loss was provided, the Court need not
address the second prong of the analysis. The Court, thus, declines to do so in this
Reasons for Order.
(2) Defendants are Entitled to Summary Judgment on Plaintiff’s Claim
for Additional Living Expenses (“ALE”) Beyond March 2024.
Defendants argue that the insurance policy’s express two-year limit on ALE
bars Plaintiff’s claim for ALE after March 2024.48 Because there was no agreed-to
extension of ALE, Defendants urge that the clear language of the policy controls and
that Plaintiff’s claim for ALE post-March 2024 fails as a matter of law.49 Plaintiff
46 J.R.A. Inc. v. Essex Ins. Co., 72 So. 3d 862, 881 (La. App. 4 Cir. 5/27/11).
47 Maloney Cinque, L.L.C. v. Pac. Ins. Co., 89 So. 3d 12, 23 (La. App. 4 Cir. 1/25/12), on reh'g (Mar. 28,
2012), writ denied, 92 So. 3d 345 (La. 7/2/12), and writ denied, 92 So. 3d 345 (La. 7/2/12).
48 R. Doc. 44-1 at p. 17.
49 Id. at pp. 18-19.
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responds that genuine questions of material fact exist regarding Plaintiff’s claims for
ALE costs incurred within the contractual ALE period and for ALE as an additional
measure of damages under La. R.S. § 22:1973.50
“An insurance policy is a contract between the parties and should be construed
by using the general rules of interpretation of contracts set forth in the Louisiana
Civil Code.”51 Provisions in the insurance policy should be interpreted “using their
plain, ordinary and generally prevailing meaning.”52 If the wording of a provision in
a policy is clear and unambiguous, courts must interpret the policy as written.53
The policy at issue states “We cover these increases to your normal living
expenses for a period of time…commencing with the date of loss up to two years from
the date of loss, or a later date if agreed to by us.”54 The parties agree that they never
agreed to extend the time period for ALE under the policy.55 While Plaintiff argues
that that are questions of material fact regarding claims for ALE costs incurred
during the contractual period and for ALE as an additional measure of damages,
these arguments do not respond directly to Defendants’ Motion. Defendants’ Motion
requests summary judgment on ALE incurred after March 2024, which is the end of
the contractual period for payment of ALE expenses.56 This length of time specified
in the insurance policy is clear and unambiguous, and the Court, thus, interprets it
as written.
50 R. Doc. 45 at p. 21.
51 Cadwallader v. Allstate Ins. Co., 848 So. 2d 577, 580 (La. 6/27/03).
52 Id.
53 Id.
54 R. Doc. 44-9, Policy, at p. 53.
55 See R. Doc. 44-11 and 45-1 at ¶ 20.
56 R. Doc. 44-1 at p. 17
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Additional living expenses beyond March 2024 are precluded by the plain
language of the contract. Therefore, there is no genuine dispute of material fact that
the date of the loss was March 10, 2022, that the policy contained an express provision
covering ALE for two years from the date of the loss, and that there was no agreed-
to extension of ALE. Defendants are entitled to summary judgment on Plaintiff’s
claim for ALE post-March 2024.
(3) Defendants are Not Entitled to Summary Judgment on Plaintiff’s
Claim for Mental Anguish.
Defendants argue that Plaintiff’s claim for general damages due to her mental
anguish must fail because they are derivative of her bad-faith theories of recovery.57
Additionally, Defendants contend that Plaintiff has provided no evidence of any
compensable metal anguish that entitles her to recovery because ordinary frustration
and inconvenience are not compensable under Louisiana law.58 Plaintiff responds
that she has presented evidence of her mental anguish due to the Defendants’ alleged
delays 	and 	that 	this 	anguish 	was 	not 	simply 	ordinary 	frustration 	and
inconvenience.59 Plaintiff argues that she has presented evidence to establish that
there is a genuine issue of material fact regarding her mental anguish.
Because the Court has found that Defendants are not entitled to summary
judgment on the bad faith claim, the Court focuses its analysis on Defendants’
argument that Plaintiff has failed to provide evidence of compensable mental anguish
as a result of Defendants’ actions. General damages are available for mental anguish
57 R. Doc. 44-1 at pp. 19-20.
58 Id.
59 R. Doc. 45 at pp. 24-26.
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caused by an insurer’s bad faith delay or refusal to pay claims.60 However, the insured
must present sufficient proof of mental anguish to recover such damages.61 As part
of this proof, the insured must prove that her mental anguish was caused by the
insurer’s refusal to or delay in paying the claim.62 Evidence of disappointment,
inconvenience, and stress is not enough to recover damages for mental anguish for
an insurer’s alleged bad faith actions.63 Furthermore, neither proof of medical or
psychiatric care nor testimony of experts is required to establish that compensable
mental anguish occurred.64
Defendants argue that Plaintiff connects her emotional distress to the post-
ALE living arrangements with family and friends and to the administrative burdens
of submitting paperwork required by the insurance company. Plaintiff testified in her
deposition that her having to fight with the insurers was tied to the uncertainty in
living arrangements following the water damage to her house.65 The Court finds that
the Plaintiff’s deposition creates a genuine issue of material fact as to whether she
experienced compensable mental anguish as a result of the alleged delay in paying
and alleged denial of her insurance claims. While Defendants point to French in
support of their argument, in which the Fifth Circuit affirmed a district judge’s denial
of damages for mental anguish, the district court’s ruling in that case happened at
60 French v. Allstate Indem. Co., 637 F.3d 571, 584 (5th Cir. 2011)
61 Id.
62 Consol. Companies, Inc. v. Lexington Ins. Co., 616 F.3d 422, 434 (5th Cir. 2010) (“Damages are
awarded to compensate the insured for losses caused by the insurer's refusal to pay.”).
63 Prest v. Louisiana Citizens Prop. Ins. Corp., 125 So. 3d 1079, 1089 (La. 12/4/12).
64 Arceneaux v. State Farm Fire & Cas. Co., No. 07-3830, 2009 WL 1393711, at *2 (E.D. La. May 18,
2009) (citing Dickerson v. Lexington Ins. Co., 556 F.3d 290, 305 (5th Cir. 2009)).
65 R. Doc. 45-8, Kristie Osteen’s Deposition, at pp. 17-18.
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the close of a three-day bench trial once evidence regarding that plaintiff’s mental
anguish claim had been heard.66 Plaintiff’s testimony in her deposition creates a
genuine issue of material fact that must be resolved at trial.
IV. 	CONCLUSION
For the foregoing reasons,
IT IS HEREBY ORDERED that Defendants Federal Insurance Company
and Chubb Insurance Solutions Agency, Inc.’s Motion for Partial Summary Judgment
is GRANTED in part and DENIED in part. The Motion is GRANTED as to
Plaintiff’s claim for additional living expenses incurred after March 2024. It is in all
other respects DENIED.
New Orleans, Louisiana, November 20, 2025.
_____________________________
WENDY B. VITTER
United States District Judge
66 French, 637 F.3d at 584.
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