Louisiana federal courts have been split on the issue regarding the applicable prescriptive period (statute of limitation) for first-party insureds’ bad faith claims against their insurers. Recently, the Louisiana Supreme Court granted review of Smith v. Citadel Insurance Company, to definitively rule on the primary legal issue presented: “the proper prescriptive period applicable to a first-party bad faith claim against an insurer.”1
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On Saturday October 12, 2019, several decks of upper floors of the Hard Rock Hotel & Casino under construction just off Canal Street in New Orleans suddenly collapsed. As emergency personnel were engaged in the immediate efforts to rescue and aid the crews working at the hotel site, the City of New Orleans was busy implementing its emergency response teams.
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In an historic win for American consumers and workers, on September 20, 2019, the U. S. House of Representatives passed H.R. 1423, the Forced Arbitration Injustice Repeal or FAIR Act,1 by a vote of 225 to 186. This groundbreaking bill could be the beginning of the demise of the remedy-stripping, rights-stomping, forced arbitration clauses in contracts of adhesion. Arbitration is often referred to an alternative dispute resolution—meaning an alternative to the litigation of a dispute.
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The time is now to button up those flood claims. The deadline for submission of the sworn statement of a Hurricane Michael flood loss, known as the Proof of Loss (‘POL”), is 365 days from the date of loss,1 which is October 10, 2019, for those in the Panhandle of Florida. The POL is the policyholder’s sworn statement for the amount of insurance proceeds requested under the Standard Flood Insurance Policy (“SFIP”).
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Hurricane Michael has left a familiar mark on the Florida Panhandle. Much like Hurricanes Katrina and Ike, Hurricane Michael brought devasting winds followed by wind and flooding and more wind. Battered homes and businesses are assessed in the aftermath in an attempt to determine the extent and cause of damage resulting from the multiple perils associated with a hurricane. This has proven to be no easy task after a major hurricane.
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It has been almost eight months since Hurricane Michael devastated the eastern side of the Florida Panhandle. Not surprisingly, many residents and business owners are exhausted. Exhausted in the deepest sense—exhausted from waiting, exhausted from hoping, exhausted from failed promises made by their insurer, which benefited from premiums faithfully paid, only to find out that their insurer has “exhausted” its obligation to them. What is the recourse for the insured who has purchased insurance coverage to protect against a catastrophe such as Hurricane Michael? Will an insured be indemnified under its contract of insurance, including recovery of the costs and expense to pursue the benefits of the policy in court if necessary?
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The Sixth Circuit Court of Appeals in Tennessee recently ruled and reaffirmed that a Tennessee policyholder is not limited to the statutory extracontractual remedy for an insurer’s bad faith refusal to pay on a policy. She may also be awarded punitive damages under common law. And, further, the Tennessee legislative cap on punitive damages is an “unconstitutional invasion of the right to trial by jury under the Tennessee Constitution.”
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The New York Supreme Court, Appellate Division, First Department “unanimously reversed, on the law, with costs, the motion denied and the claims reinstated,” the New York County Supreme Court trial judge’s order dated April 2, 2018, to the extent appealed from, which granted dismissal of Plaintiff D.K. Property, Inc.’s (“D.K.”) consequential damages (other than attorney’s fees) pled in its amended complaint.1 The dispute involves an “all-risk” commercial property policy issued by Defendant National Union Fire Ins. Co. of Pittsburgh, PA (“National Union”) and its denial of D.K.’s October 2014 claim for policy proceeds and benefits arising from damage to one of its buildings insured under the policy.
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When a National Flood Insurance Program (“NFIP”) insured is not satisfied with the payment for flood-related losses, the NFIP insured is directed to three options:1

  1. The NFIP insured may file an appeal with the Federal Emergency Management Agency (“FEMA”) within 60 days of the NFIP insurer’s written denial or partial denial of the requested claim amount.2
  2. The NFIP insured can invoke the Appraisal Provision of her policy. NOTE: The NFIP insured may not file option one above, the appeal with FEMA, if the Appraisal Provision is invoked.
  3. The NFIP insured may file a lawsuit within one year of the date of the written denial of all or part of the NFIP insured’s claim. NOTE: The filing of a lawsuit precludes option one, the appeal, and option two, the appraisal process, as those are considered pre-litigation administrative remedies.
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