O'Shea et al v. Ocean Harbor Casualty Insurance Company

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UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
JOSEPH O’SHEA, ET AL.,
Plaintiffs
CIVIL ACTION
VERSUS 	NO. 25-750
OCEAN HARBOR CASUALTY
INSURANCE COMPANY,
Defendant
SECTION: “E” (3)
ORDER AND REASONS
Before the Court is a Motion for Summary Judgment filed by Defendant Ocean
Harbor Casualty Insurance Company, seeking summary judgment that it is not liable for
statutory penalties, including attorneys’ fees, under La. R.S. 22:1892.1 Joseph and
Deborah O’Shea filed an opposition, 2 and Defendant filed a reply. 3
BACKGROUND
I. 	Factual Background
This action arises from an insurance-coverage dispute filed in state court in 2023
concerning property allegedly damaged by Hurricane Ida, specifically Plaintiffs’ home. 4
Defendants removed that action to the Eastern District of Louisiana, 5 and while it was
pending before this Court, the parties reached a settlement on the amount of the
underlying claim.
After the claim for damage to the property had been paid, Plaintiffs filed a new
action in state court, claiming that Defendant failed to timely pay the settlement proceeds
1 R. Doc. 30.
2 R. Doc. 33.
3 R. Doc. 34.
4 R. Doc. 1-1 at p. 2.
5 Joseph O’Shea, et al. v. Ocean Harbor Casualty Insurance Company, No. 23-1926 (E.D. La.), R. Doc. 1.
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and is therefore subject to statutory penalties under La. R.S. § 22:1892.6 The statute
provides for penalties when, after a settlement or compromise is reduced to writing, an
insurer is found to have acted arbitrarily, capriciously, or without probable cause in failing
to “make the payment,” within the statutorily mandated 30-day period, which begins to
run once the settlement or compromise is reduced to writing. 7
On October 28, 2024, counsel for the parties participated in a telephone call during
which 	defense 	counsel 	represented 	that 	Defendant 	had 	authorized 	acceptance 	of
Plaintiffs’ settlement demand for a specified monetary amount. 8 That discussion was
memorialized in an email from defense counsel to Plaintiffs’ counsel. 9 In the email,
defense counsel stated:
Please allow this to confirm our telephone conversation in which I advised you that
Ocean Harbor has authorized me to accept plaintiffs’ demand of [redacted settlement
amount] in new money in full and final settlement of all claims against Ocean Harbor.
Please confirm that there is no lienholder on the property. If there is, please provide
the details of same. . . . Finally, please confirm payee information and provide any
necessary W-9s. Please note that we do not consider the 30-day period for payment of
settlement to [begin] running until we receive the above-requested information as the
checks cannot be requested without same.
On October 29, 2024, Plaintiffs’ counsel responded, stating “[o]ur clients accept . . . Britt
will send you all the check information.”10 That same day, Plaintiffs’ counsel’s paralegal
provided the payee information, confirmed that “[t]here is no mortgage,” and supplied
the firm’s W-9s.11
On October 30, 2024, defense counsel emailed a proposed settlement document to
Plaintiffs’ counsel, stating:
6 R. Doc. 1-1.
7 La. R.S. § 22:1892(B)(1)(a).
8 Compare R. Doc. 30-1 at p. 1, ¶ 1, with R. Doc. 33-1 at p. 1, ¶ 1, p. 2, ¶ 1.
9 R. Doc. 30-4 at p. 1.
10 Id. at p. 2.
11 Id. at p. 3.
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“Please see attached proposed settlement documents for this matter. Please review
same and advise as to any proposed edits or additions. Please also confirm that
Plaintiffs were never represented by MMA. If they were, there is additional
language we will need to add to the release.” 12
On 	November 	5, 	2024, 	Plaintiffs’ 	counsel’s 	paralegal 	responded: 	“The 	proposed
settlement documents for this matter are approved. Plaintiffs were never represented by
MMA.” 13 On November 19, 2024, Defendant issued four checks representing the total
settlement amount. 14 On November 20, 2024, Defendant mailed the checks via certified
mail to its own counsel’s New Orleans office. 15 The checks were delivered to defense
counsel’s office on December 3, 2024.16 That same day, defense counsel notified Plaintiffs’
counsel by email that the checks had arrived.17 Plaintiffs’ counsel’s office is in the same
building as defense counsel’s office. 18 Two minutes after receiving the email, Plaintiffs’
counsel responded that they would send someone to retrieve the checks. 19 Shortly
thereafter, 	Plaintiffs’ 	counsel 	collected 	the 	checks 	and 	executed 	a 	document
acknowledging receipt of all four settlement checks. 20
One week later, on December 10, 2024, Plaintiffs’ counsel sent a demand letter to
Defendant seeking statutory penalties, including attorneys’ fees, under La. R.S. § 22:1892
based on the allegedly untimely payment of the underlying property damage claim. 21 On
December 11, 2024, defense counsel responded and provided certified mail tracking
12 R. Doc. 30-4 at p. 4.
13 Id. at p. 5. This District created a Streamlined Settlement Program for Hurricane Ida cases. McClenny,
Mosely & Associates (“MMA”), a Texas firm now in bankruptcy, represented or purported to represent
many claimants whose homes were damaged in Hurricane Ida. MMA forfeited whatever right it may have
had in fees in cases in this District before it declared bankruptcy.
14 R. Doc. 30-4 at pp. 11-18.
15 R. Doc. 30-5 at p. 1.
16 Id.
17 Id. at p. 2.
18 Compare R. Doc. 30-1 at p. 4, ¶ 13, with R. Doc. 33-1 at p. 3, ¶ 13.
19 R. Doc. 30-5 at p. 2.
20 Id. at p. 3.
21 Id. at pp. 4-7.
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documentation reflecting that the checks were mailed to defense counsel on November
20, 2024.22
All four checks were endorsed by the Plaintiff, deposited, and posted as paid by
January 18, 2025.23 However, Plaintiffs did not execute the finalized Receipt, Release,
Indemnity, and Confidentiality Agreement until May 15, 2025. 24
II. 	Procedural Background of The Instant Action.
On March 7, 2025, Plaintiffs filed a Petition for Damages in the 24th Judicial
District Court alleging that Defendant was subject to statutory penalties under La. R.S. §
22:1892 for failing to timely remit settlement proceeds. 25 Defendant removed the action
to the Eastern District of Louisiana on April 16, 2025.26
On May 22, 2025, Defendant filed an Answer and Counterclaims for breach of
contract, unjust enrichment, waiver and estoppel, and breach of confidentiality.27
Plaintiffs moved to dismiss the counterclaims pursuant to Rule 12(b)(6). 28 In response,
Defendant requested and was granted leave to amend and filed its First Amended and
Supplemental Answer and Counterclaims. 29 The Court denied Plaintiffs’ first Motion to
Dismiss without prejudice.30 Plaintiffs subsequently filed a second Motion to Dismiss. 31
In its December 31, 2025 Order, the Court granted the motion to dismiss in part
and denied it in part. 32 The Court held that Defendant sufficiently pleaded the existence
22 R. Doc. 30-5 at pp. 8-11.
23 Compare R. Doc. 30-1 at pp. 6-7, ¶¶ 22-23, with R. Doc. 33-1 at pp. 3-4, ¶¶ 22-23.
24 R. Doc. 30-6 at pp. 11-16.
25 R. Doc. 1-1.
26 R. Doc. 1.
27 R. Doc. 9.
28 R. Doc. 11.
29 R. Doc. 15.
30 R. Doc. 16.
31 R. Doc. 18.
32 R. Doc. 27.
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and alleged breach of a binding settlement agreement under Louisiana law and denied
dismissal of the breach of contract counterclaim. 33 The Court held that the breach of
confidentiality counterclaim was duplicative of the breach of contract claim. 34 The Court
dismissed the unjust enrichment claim because the existence of a viable contract remedy
precluded recovery under that theory. 35 The Court concluded that waiver and estoppel
constituted affirmative defenses rather than independent causes of action and declined to
address 	their 	sufficiency 	at 	the 	motion-to-dismiss 	stage. 36 	Accordingly, 	the 	only
remaining claims are Defendant’s counterclaim for breach of contract and Plaintiffs’
claim for bad-faith penalties under La. R.S. 22:1892.
In the instant motion, Defendant seeks summary judgment on Plaintiff’s claims for
statutory penalties and attorneys’ fees under La. R.S. § 22:1892, arguing there are no
genuine disputes of material fact and it is entitled to judgment as a matter of law. 37 In
opposition, 	Plaintiffs 	argue 	genuine 	disputes 	of 	material 	fact 	preclude 	summary
judgment, that Defendant is not entitled to judgment as a matter of law, and the motion
for summary judgment is premature.38 Plaintiffs further request the Court defer ruling on
the motion for summary judgment and permit limited discovery pursuant to Federal Rule
of Civil Procedure 56(d) concerning Defendant’s post-settlement actions and conduct. 39
LEGAL STANDARD
III. 	Rule 56(d) Standard
Summary judgment is appropriate when a movant shows there is no genuine
33 R. Doc. 27 at pp. 5-7.
34 Id. at p. 11.
35 Id. at pp. 8-9.
36 Id. at pp. 9-10.
37 R. Doc. 30.
38 R. Doc. 33.
39 Id. at pp. 9-10.
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dispute as to any material fact and that the movant is entitled to judgment as a matter of
law. 40 The basic principles of summary judgment assume at least some discovery has
occurred.41 When a party moves for summary judgment and the nonmoving party is
unable to produce admissible evidence to oppose the motion, Federal Rule of Civil
Procedure 56(d) requires that summary judgment be postponed if the nonmovant has not
had the opportunity to discover information that is essential to his opposition. 42 Rule
56(d) allows the nonmovant to request additional time to conduct discovery and to
request that the court defer deciding the motion for summary judgment. 43 A court may
also issue any other order that it finds appropriate to the situation. 44
There are four main requirements in a Rule 56(d) motion to defer summary
judgment pending discovery. The party seeking additional discovery must meet all four
requirements. The first two pertain to the timing of the motion. A party must (1) request
extended discovery prior to the court's ruling on summary judgment and (2) put the trial
court on notice that further discovery pertaining to the summary judgment motion is
being sought. 45 The Fifth Circuit has held that a party specifying intended subject matter
in requests for supplemental depositions and in document requests suffices to put a court
on notice, provided the requests relate directly to the pending summary judgment
motion.46
40 Fed. R. Civ. P. 56(a); Public Citizen Inc. v. Louisiana Attorney Disciplinary Bd., 632 F.3d 212 (5th Cir.
2011).
41 City of Alexandria v. Cleco Corp., 735 F. Supp. 2d 465, 470 (W.D. La. 2010) (citing Brown v. Mississippi
Valley State University, 311 F.3d 328 (5th Cir. 2002)).
42 City of Alexandria v. Cleco Corp., 735 F. Supp. 2d 465, 470 (W.D. La. 2010) (citing Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 242 (1986))(emphasis added).
43 Fed. R. Civ. P. 56(d)(1)-(2).
44 Fed. R. Civ. P. 56(d)(3).
45 Wichita Falls Off. Assocs. v. Banc One Corp., 978 F.2d 915, 919 (5th Cir. 1992) (citing Int'l Shortstop, Inc.
v. Rally's, Inc., 939 F.2d 1257, 1267 (5th Cir. 1991)).
46 Id.
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With respect to the third requirement, the nonmovant must demonstrate to the
court with reasonable specificity how the requested discovery pertains to the pending
summary judgment motion. A nonmovant must identify with specificity a fact or facts that
will likely reveal a genuine material fact dispute and how proposed discovery will likely
lead to evidence regarding that triable fact. The discovery requested must relate to the
issues to be adjudicated by summary judgment, 47 and the party must show how that
discovery will create a genuine issue of material fact. 48 Finally, the fourth requirement is
that the party requesting discovery must have been diligent in pursuing the relevant
discovery. 49
With respect to both the third and fourth requirements, a party's failure to either
allege with specificity how further discovery will reveal genuine issues of material facts or
prove its diligence in seeking discovery is fatal to a request for continuance of discovery.
A party cannot extend discovery or avoid summary judgment by merely alleging
additional discovery is needed. 50 Parties may not “simply rely on vague assertions that
additional discovery will produce 	needed, but unspecified, facts.” 51 A party must
show how the 	additional 	discovery 	will 	produce 	information 	as 	well 	as why that
information will create a genuine issue of material fact. The Fifth Circuit has analyzed the
“reasonable specificity” requirement for a continuance pending discovery by examining
how the requested discovery will influence the outcome of a pending summary judgment
motion, holding that a plaintiff's failure to indicate how facts sought in further discovery
47 Wichita Falls Off. Assocs. v. Banc One Corp., 978 F.2d 915, 919 (5th Cir. 1992).
48 Beattie v. Madison Cnty. Sch. Dist., 254 F.3d 595, 606 (5th Cir. 2001).
49 Int'l Shortstop, Inc. v. Rally's, Inc., 939 F.2d 1257, 1267 (5th Cir. 1991)
50 Brown v. Mississippi Valley State Univ., 311 F.3d 328, 333 n. 5 (5th Cir. 2002).
51 Adams v. Travelers Indem. Co. of Connecticut, 465 F.3d 156, 162 (5th Cir. 2006).
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will prove the plaintiff's burden fails the reasonable specificity standard. 52
Additionally, a party must be diligent in the discovery process to succeed on a
motion for additional time to conduct discovery. The two dates of concern in the diligent
discovery analysis are the end of the discovery period and the deadline to oppose
summary judgment motions. The Fifth Circuit has provided some guidance for assessing
a non-moving party's diligence in seeking discovery by distinguishing between cases in
which a nonmoving party's delay in propounding discovery requests results in document
production deadlines occurring after the due date for responses to summary judgment, 53
and delays which, while not desirable, result in document production being due before
the deadline to oppose summary judgment motions. 54 The Fifth Circuit has allowed
additional discovery when plaintiffs filed their document requests more than two months
before the end of the discovery period and roughly six weeks in advance of the deadline
to oppose the summary judgment motion. 55 Finally, a non-moving party must request
extended discovery prior to the court's ruling on summary judgment and put the trial
court on notice that further discovery pertaining to the summary judgment motion is
being sought. 56
IV. 	Summary Judgment Standard
Summary judgment is appropriate only “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.” 57 “An issue is material if its resolution could affect the outcome of the action.”58
52 Am. Fam. Life Assur. Co. of Columbus v. Biles, 714 F.3d 887, 894 (5th Cir. 2013).
53 Baker v. Am. Airlines, Inc., 430 F.3d 750, 756 (5th Cir. 2005).
54 Culwell v. City of Fort Worth, 468 F.3d 868, 872 (5th Cir. 2006).
55 Id.
56 Wichita Falls Off. Assocs. v. Banc One Corp. 978 F.2d 915, 919 (5th Cir. 1992).
57 F ED . R. CIV . P. 56; see also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986).
58 DIRECTV Inc. v. Robson, 420 F.3d 532, 536 (5th Cir. 2005).
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When assessing whether a material factual dispute exists, the Court considers “all of the
evidence in the record but refrain[s] from making credibility determinations or weighing
the evidence.”59 All reasonable inferences are drawn in favor of the nonmoving party. 60
There is no genuine issue of material fact if, even viewing the evidence in the light most
favorable to the nonmoving party, no reasonable trier of fact could find for the nonmoving
party, thus entitling the moving party to judgment as a matter of law. 61
If the dispositive issue is one for which the moving party will bear the burden of
persuasion at trial, the moving party “must come forward with evidence which would
‘entitle it to a directed verdict if the evidence went uncontroverted at trial.’” 62 If the
moving party fails to carry this burden, the motion must be denied. If the moving party
successfully carries this burden, the burden of production then shifts to the nonmoving
party to direct the Court’s attention to something in the pleadings or other evidence in the
record setting forth specific facts sufficient to establish that a genuine issue of material
fact does indeed exist. 63
On the other hand, if the dispositive issue is one on which the nonmoving party
will bear the burden of persuasion at trial, the moving party may satisfy its burden of
production by either (1) submitting affirmative evidence that negates an essential element
of the nonmovant’s claim, or (2) demonstrating there is no evidence in the record to
establish an essential element of the nonmovant’s claim.64 When proceeding under the
59 Delta & Pine Land Co. v. Nationwide Agribusiness Ins. Co., 530 F.3d 395, 398 (5th Cir. 2008); see also
Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150-51 (2000).
60 Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994).
61 Smith v. Amedisys, Inc., 298 F.3d 434, 440 (5th Cir. 2002).
62 Int’l Shortstop, Inc. v. Rally’s, Inc., 939 F.2d 1257, 1263-64 (5th Cir. 1991) (quoting Golden Rule Ins. Co.
v. Lease, 755 F. Supp. 948, 951 (D. Colo. 1991)).
63 Celotex, 477 U.S. at 322-24.
64 Id. at 331-32 (Brennan, J., dissenting); see also St. Amant v. Benoit, 806 F.2d 1294, 1297 (5th Cir. 1987)
(citing Justice Brennan’s statement of the summary judgment standard in Celotex, 477 U.S. at 322-24, and
requiring the Movers to submit affirmative evidence to negate an essential element of the nonmovant’s
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first option, if the nonmoving party cannot muster sufficient evidence to dispute the
movant’s contention that there are no disputed facts, a trial would be useless, and the
moving party is entitled to summary judgment as a matter of law. 65 When, however, the
movant is proceeding under the second option and is seeking summary judgment on the
ground that the nonmovant has no evidence to establish an essential element of the claim,
the nonmoving party may defeat a motion for summary judgment by “calling the Court’s
attention to supporting evidence already in the record that was overlooked or ignored by
the moving party.” 66 Under either scenario, the burden then shifts back to the movant to
demonstrate the inadequacy of the evidence relied upon by the nonmovant. 67 If the
movant meets this burden, “the burden of production shifts [back again] to the
nonmoving party, who must either (1) rehabilitate the evidence attacked in the moving
party’s papers, (2) produce additional evidence showing the existence of a genuine issue
for trial as provided in Rule 56(e), or (3) submit an affidavit explaining why further
discovery is necessary as provided in Rule 56(f).” 68 “Summary judgment should be
granted if the nonmoving party fails to respond in one or more of these ways, or if, after
the nonmoving party responds, the court determines that the moving party has met its
ultimate burden of persuading the court that there is no genuine issue of material fact for
claim or, alternatively, demonstrate the nonmovant’s evidence is insufficient to establish an essential
element); Fano v. O’Neill, 806 F.2d 1262, 1266 (5th Cir. 1987) (citing Justice Brennan’s dissent in Celotex,
and requiring the movant to make an affirmative presentation to negate the nonmovant’s claims on
summary judgment); 10A CHARLES A LAN W RIGHT, ARTHUR R. M ILLER & M ARY K AY K ANE , FEDERAL P RACTICE
AND P ROCEDURE § 2727.1 (2016) (“Although the Court issued a five-to-four decision, the majority and
dissent both agreed as to how the summary-judgment burden of proof operates; they disagreed as to how
the standard was applied to the facts of the case.” (internal citations omitted)).
65 First Nat’l Bank of Ariz. v. Cities Serv. Co., 391 U.S. 253, 288-89 (1980); Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 249-50 (1986).
66 Celotex, 477 U.S. at 332-33.
67 Id.
68 Id. at 332-33 & n.3.
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trial.”69
Still, “unsubstantiated assertions are not competent summary judgment evidence.
The party opposing summary judgment is required to identify specific evidence in the
record and to articulate the precise manner in which that evidence supports the claim.
‘Rule 56 does not impose upon the district court a duty to sift through the record in search
of evidence to support a party’s opposition to summary judgment.’” 70
LAW AND ANALYSIS
V. 	Defendant did not act arbitrarily, capriciously, or without probable
cause and is not liable for statutory penalties.
Defendant 	seeks 	summary 	judgment 	denying 	Plaintiffs’ 	claim 	for 	statutory
penalties and attorneys’ fees under La. R.S. § 22:1892, arguing there are no genuine issues
of material fact, and it is entitled to judgment as a matter of law. 71
To obtain summary judgment, Defendant as the moving party must demonstrate
“that there is no genuine dispute as to any material fact and [it] is entitled to judgment as
a matter of law.” 72 Because Plaintiffs bear the burden at trial of proving untimely payment
and that the insurer’s conduct was arbitrary, capricious, or without probable cause under
La. R.S. § 22:1892, Defendant may satisfy its summary judgment burden by either (1)
submitting affirmative evidence that negates an essential element of the nonmovant’s
claim, or (2) demonstrating there is no evidence in the record to establish an essential
element of the nonmovant’s claim. 73
69 Id.; see also First Nat’l Bank of Ariz., 391 U.S. at 289.
70 Ragas v. Tenn. Gas Pipeline Co., 136 F.3d 455, 458 (5th Cir. 1998) (first citing Celotex, 477 U.S. at 324;
then Forsyth v. Barr, 19 F.3d 1527, 1537 (5th Cir. 1994); then quoting Skotak v. Tenneco Resins, Inc., 953
F.2d 909, 915-16 & n.7 (5th Cir. 1992)).
71 R. Doc. 30.
72 F ED . R. CIV . P. 56; see also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986).
73 Celotex, 477 U.S. at 331-32.
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Plaintiffs argue the settlement on the underlying property damage claim was
reduced to writing on October 28, 2024, when Defendant accepted Defendant’s monetary
demand by email, thereby triggering the statutory 30-day period, but payment was not
received until December 3, 2024—thirty-six days later. 74 Plaintiffs contend Defendant did
not have the right to unilaterally suspend or delay the commencement of the statutory
deadline by requesting additional information post-acceptance, specifically information
regarding MMA, which Plaintiffs characterize as nonessential information not necessary
for payment. 75
In further support, Plaintiffs note that, in response to Plaintiffs’ initial demand
letter, defense counsel acknowledged that “settlement in this matter was not effectuated
until October 29, 2024,” and further agreed that “[p]er La. R.S. [§] 22:1892, payment was
required to be made by November 28, 2024.”76 Plaintiffs maintain the statute contains no
provision permitting an insurer to toll or reset the deadline by requesting additional,
nonessential information post-acceptance—such as confirmation regarding Plaintiffs’
representation by MMA. 77
Plaintiffs argue Defendant possessed all the information necessary to issue
payment as of October 28, 2024, and that any delay beyond that date was self-imposed. 78
Plaintiffs assert there are factual disputes regarding when the settlement agreement was
finalized and whether the additional information was necessary for the checks to issue. 79
Plaintiffs also argue Defendant is not entitled to judgment as a matter of law under the
74 R. Doc. 33 at pp. 4-5.
75 Id. at p. 6.
76 Id. at p. 5.
77 Id. at p. 6.
78 Id. at p. 7.
79 Id. at pp. 6-10.
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plain language of the statute. 80
Defendant argues the 30-day period did not begin to run until November 5, 2024,
because the agreement was expressly conditioned on receipt of specific information
necessary to issue the settlement checks, including confirmation regarding lienholders,
any potential third-party interests, and the required payee information. 81 Defendant relies
on the October 28, 2024 email in which defense counsel stated that the 30-day period
would not begin to run until the requested information was received, as the checks could
not be issued without it. 82
Plaintiffs’ counsel responded to the email on October 29, 2024, stating “[o]ur
clients accept . . . Britt will send you all the check information.”83 Minutes later, Brittany
Roy, a paralegal working for Plaintiffs’ counsel, provided some of the requested
information, stating: “[P]lease issue the settlement checks as follows: “Payable to ‘Joseph
O’Shea and Deborah O’Shea & Montiel Hodge, LLC.’” 84 She further confirmed that
“[t]here is no mortgage” and attached the firm’s W-9. 85 However, on October 30, 2024,
defense counsel requested confirmation that Plaintiffs had never been represented by
MMA, explaining that additional release language would be required if MMA had
represented them. 86 That confirmation was not provided until November 5, 2024. 87
Defendant 	argues 	the 	commencement 	of 	the 	30-day 	period 	was 	expressly
conditioned on its receipt of the requested information and that, because the information
80 R. Doc. 33 at pp. 6-10.
81 R. Doc. 30-3 at pp. 1-2
82 R. Doc. 30-4 at p. 1.
83 Id. at p. 2.
84 Id. at p. 3.
85 Id. at p. 3.
86 Id. at p. 4.
87 Id. at p. 5.
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was not fully provided until November 5, 2024, the checks received on December 3, 2024
were timely. 88 Accordingly, Defendant contends the settlement amount was paid within
30 days of the agreement being reduced to writing, and it is entitled to judgment as a
matter of law on Plaintiffs’ claim for penalties, including attorneys’ fees. 89 Alternatively,
the Defendant argues it was not acting arbitrarily, capriciously, or without probable cause
when it requested confirmation the Plaintiffs had not been represented by MMA.
La. R.S. § 22:1892 provides for penalties and attorneys’ fees when an insurer fails
to timely pay a settlement amount and the failure to pay is arbitrary, capricious, and
without probable cause. 90 The statute provides that “failure to make the payment within
thirty days after written agreement or settlement when the failure is found to be arbitrary,
capricious, or without probable cause, shall subject the insurer to a penalty.” 91 To recover
penalties under the statute, the insured bears the burden of proving that (1) the insurer
failed to timely pay the settlement amount, and (2) that the failure was arbitrary,
capricious, or without probable cause. 92 “Ultimately, the determination of whether an
insured acted in bad faith depends on the facts and circumstances of a particular case.” 93
The 	Louisiana 	Supreme 	Court 	has 	recognized 	that 	the 	phrase 	“arbitrary,
capricious, or without probable cause” is 	synonymous with “vexatious,” meaning
unjustified and without reasonable cause or excuse.94 Whether an insurer was “arbitrary,
capricious, or without probable cause” in failing to pay within the statutory period is
88 R. Doc. 30-3 at pp. 17-19.
89 Id. at pp. 18-19.
90 La. R.S. § 22:1892(B)(1)(a).
91 Id.
92 Bridges v. Chubb Indemnity Insurance Company, 420 So.3d 71, 80 (La. Ct. App. 5th Cir.).
93 Bainbridge, LLC v. Western World Insurance Company, 682 F.Supp.3d 634, 638 (E.D. La.).
94 First United Pentecostal Church, 119 F.4th at 427-28 (quoting Louisiana Bag Co., Inc., 999 So.2d at
1114)); Reed v. State Farm Mut. Automobile Insur. Co., 2003-0360 (La. 12/3/03), 857 So.2d 1012.
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generally a factual issue that hinges on the facts known to the insurer at the time of its
action.95 An insurer’s conduct will not be considered “arbitrary and capricious” if the
conduct is based on a reasonable, good-faith justification. 96
Defendant seeks summary judgment on the ground that its conduct was not
arbitrary, capricious, or without probable cause.97 To satisfy its initial summary-judgment
burden on this argument, Defendant has elected to produce affirmative evidence—a
sworn affidavit and emails between the parties—to show that Plaintiffs cannot establish
an essential element of their claim: that Defendant’s conduct was arbitrary, capricious, or
without probable cause. 98
The Court finds Defendant has met its burden of providing summary-judgment
evidence reflecting a documented, good-faith effort to finalize and fund the settlement.
To meets its burden, Defendant provided a sworn affidavit from its Claims Examiner,
Shelley Andrews, as well as emails between the parties. 99 Starting with the Affidavit, Ms.
Andrews attests to the facts known to the insurer when the conduct at issue occurred and
explains the basis for the timing of payment of the settlement checks.100 According to her
Affidavit, Defendant authorized acceptance of Plaintiffs’ demand on October 28, 2024;
was informed of Plaintiffs’ acceptance and payee instructions on October 29, 2024;
received confirmation on November 5, 2024 that there were no additional lienholders (no
representation by MMA) and approval of the proposed split of the settlement amount into
separate checks; and thereafter requested issuance of four settlement checks through
95 Reed v. State Farm Mut. Automobile Insur. Co., 2003-0360 (La. 12/3/03), 857 So.2d 1012, 1021.
96 Calogero, 753 So.2d 170.
97 R. Doc. 30-3 at pp. 22-25.
98 Id. at pp. 22-24.
99 R. Doc. 30-6 at pp. 1-10, pp. 17-19; R. Doc. 30-4 at pp. 1-5; R. Doc. 30-5 at p. 2, pp. 12-16.
100 Id. at pp. 17-19.
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Defendant’s accounting department on November 13, 2024.101 The checks were issued on
November 19, 2024, mailed by certified mail on November 20, 2024, and delivered to
Defendant’s own counsel on December 3, 2024. 102 Plaintiffs’ counsel retrieved the checks
that same day. Defendant’s payment records reflect that Plaintiffs endorsed and
deposited all checks by January 21, 2025. 103
The 	emails 	corroborate 	that 	timeline 	and 	reflect 	consistent, 	documented
communication by defense counsel: promptly memorializing the settlement agreement;
requesting the information necessary to issue checks; transmitting proposed settlement
documents; confirming the checks were delivered to Plaintiffs’ counsel immediately when
they arrived; and following up regarding execution of the release. 104 This documented
progression demonstrates a structured and orderly payment process and does not support
a finding of bad faith. Defendant had a reasonable, good faith basis to confirm the absence
of any lienholder or potential attorneys’ special privileges before issuing payment.
Defendant 	has 	met 	its 	initial 	burden 	at 	summary 	judgment 	by 	providing
affirmative evidence negating an essential element of Plaintiffs’ claim—specifically, that
Defendant’s conduct was arbitrary, capricious, or without probable cause. The burden
accordingly shifts to Plaintiffs to identify specific, competent evidence creating a genuine
dispute of material fact. Plaintiffs have failed to do so. In fact, Plaintiffs produced no
evidence suggesting any pretext, delay tactics, or unjustified refusal to pay by Defendant.
Because Plaintiffs failed to produce any evidence creating a disputed issue of material fact
concerning the Defendant’s bad faith conduct, no reasonable factfinder could conclude
101 R. Doc. 30-6 at pp. 17-18.
102 Id. at pp. 18-19.
103 Id. at p. 19.
104 R. Doc. 30-4 at pp. 1-5; R. Doc. 30-5 at pp. 2, 13-16; R. Doc. 30-6 at pp. 1-10.
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that Defendant acted arbitrarily, capriciously, or without probable cause.
Finally, Plaintiffs request the Court defer ruling on the Defendant’s Motion for
Summary Judgment and permit limited discovery concerning issues raised in the
motion.105 Under Federal Rule of Civil Procedure 56(d), the Court may allow the
nonmovant additional time to take discovery if the nonmovant shows that “for specified
reasons, it cannot present facts essential to justify its opposition.” Plaintiffs argue the
requested discovery is essential because it will allow them to support their opposition to
the motion by showing there are material facts in dispute, including: (1) when “payment”
or “tender” occurred for purposes of La. R.S. § 22:1892; (2) whether Defendant in fact
relinquished possession and control of the settlement funds upon mailing the checks to
its own counsel; (3) whether any delay in payment was justified or instead attributable to
Defendant’s 	internal 	procedures, 	discretionary 	approval 	steps, 	or 	post-acceptance
inquiries; and (4) whether Defendant’s asserted “trigger date” for compliance with the
statute is supported by its internal records. 106
The Court finds that Plaintiffs have not met their burden under Federal Rule of
Civil Procedure 56(d). Although Plaintiffs identify categories of internal workflow
records, timestamps, approval logs, and decision-maker testimony they seek to obtain,
and articulate why they believe such discovery is relevant to issues of “tender,” control,
and alleged delay under La. R.S. § 22:1892, the Court is not persuaded that the requested
discovery would alter the outcome of the pending Motion for Summary Judgment. Even
accepting Plaintiffs’ description of the anticipated evidence, the material facts concerning
the timing of issuance, mailing, and receipt of the settlement checks are established by
105 R. Doc. 33 at pp. 9-10.
106 R. Doc. 33-4 at p. 3.
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the existing record. Plaintiffs have not demonstrated how additional testimony regarding
internal routing decisions, approval steps, or inquiries regarding lienholders would create
a genuine dispute as to whether Defendant timely mailed the checks or complied with its
statutory obligations under La. R.S. § 22:1892.
Further, Plaintiffs’ Rule 56(d) request is denied because Plaintiffs have failed to
satisfy the rule’s requirements of diligence and specificity. 107 Defendant notes that
Plaintiffs filed suit in March 2025 yet conducted no written discovery and noticed no
depositions during more than ten months of litigation. 108 The only discovery effort—a
corporate deposition notice—was served five days after Defendant filed its Motion for
Summary Judgment.109 Defendant contends that Plaintiffs had ample opportunity to
pursue discovery, that a party suspends discovery at their own risk, and that Plaintiffs’
delay defeats their request for deferment. 110 the Court finds that Plaintiffs have not
demonstrated diligence in pursuing discovery. This action has been pending since March
2025, yet Plaintiffs served no written discovery and noticed no depositions during the
ensuing ten months. The only discovery effort—a corporate deposition notice—was issued
five days after Defendant filed its Motion for Summary Judgment. Rule 56 does not
require that discovery be completed before summary judgment may be granted, and a
party who elects to forgo timely discovery does so at its own risk. On this record, any
inability to present additional evidence is attributable to Plaintiffs’ delay rather than to
circumstances beyond their control. Accordingly, Plaintiffs have not satisfied the
requirements of Rule 56(d), and their request to defer or deny consideration of the Motion
107 R. Doc. 34 at pp. 5-8.
108 Id. at p. 5.
109 Id.
110 Id.
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for Summary Judgment is denied.
Defendant is entitled to judgment as a matter of law that Plaintiffs are not entitled
to penalties under La. R.S. § 22:1892. 111
Accordingly,
IT 	IS 	ORDERED 	that 	Defendant's 	Motion 	for 	Summary 	Judgment 	is
GRANTED. 112
New Orleans, Louisiana, this 27th day of February, 2025.
____________ 	__________________
SUSIE MORGAN
UNITED STATES DISTRICT JUDGE
111 Because the Court finds the Defendant did not act arbitrarily, capriciously, or without probable cause,
the Court need not address whether the mailbox rule applies.
112 Defendant’s counterclaim for breach of contract remains.
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