Castro-Rochez et al v. Allied Trust Insurance Company

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UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
PEDRO CASTRO-ROCHEZ ET AL. CIVIL ACTION
VERSUS NO. 25-2431
ALLIED TRUST INSURANCE COMPANY SECTION “A” (5)
ORDER AND REASONS
Before the Court is Defendant’s Motion to Stay Pursuant to L.A. R.S. 22:1892.2 and
Extension of Responsive Pleading Deadline (Rec. Doc. 9). Plaintiffs, Pedro Castro-Rochez and
Miyersi Castro-Bonilla, oppose the motion. The motion, set for submission on January 21, 2026,
is before the Court on the briefs without oral argument. For the following reasons, the Court
GRANTS the motion.
I. BACKGROUND
On October 21, 2025, Plaintiffs filed this lawsuit seeking damages for losses allegedly
caused by Hurricane Francine on September 11, 2024.1 Hurricane Francine was declared a disaster
by the President of the United States on September 16, 2024,2 and the Governor of Louisiana
declared a state of emergency on September 18, 2024, qualifying the event as a "catastrophic loss"
under La. R.S. 22:1892(B)(1)(c) (“‘Catastrophic loss’ means a loss that arose from a natural
disaster, windstorm, or significant weather-related event that was a presidentially declared
emergency or disaster or a gubernatorially declared emergency or disaster.”).
Before filing suit, on July 15, 2025, Plaintiffs provided Allied Trust Insurance Company
(“ATIC”) with their proof of loss, which included a detailed engineering report and an estimate
1 Rec. Doc. 1-1, Pet. For Damages.
2 FEMA-4817-DR; see also Presidential Declaration of a Major Disaster for the State of Louisiana, 89 Fed.
Reg. 79680 (Sept. 30, 2024) (providing notice of the Presidential declaration of a major disaster in FEMA-
4817-DR); La. Exec. Order No. JML 24-147 (September 18, 2024)
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from Ark Consulting outlining the damages claimed.3 Subsequently, Plaintiffs submitted to
Examinations Under Oath (“EUOs”), during which they clarified that certain costs included in the
initial demand letter were not related to Hurricane Francine.4 On December 23, 2025, Defendant
reached out to Plaintiffs’ counsel to notify her that they had not complied with the cure period
notice required by La. R.S. 22:1892.2 and therefore requested consent for a stay.5 Plaintiffs
responded that they did not consent to the stay and sent a letter identified as their “cure period
notice.”6
ATIC is now asking the Court to grant a stay and an extension of the responsive pleading
deadline. La. R.S. § 22:1892.2 requires insureds to take certain actions as a condition precedent to
bringing suit. ATIC contends that Plaintiffs did not comply with the statute by providing
“sufficient notice of the current facts and circumstances of the dispute” before filing this lawsuit,
and that their proof of loss letter is not a substitute for the cure period notice.7 Plaintiffs contend
that the July 15, 2025, demand package satisfied the statutory notice requirement, that ATIC
waived its right to invoke the stay by its delay in notifying Plaintiffs of the defect, and that the
Court should exercise its discretion to deny or limit the stay to prevent undue prejudice and
unnecessary delay.
II. APPLICABLE LAW
Prior to Hurricane Francine’s landfall, the Louisiana State Legislature enacted reforms and
amendments to the previous bad faith penalty statutes. See La. Act 3 of 2024 (SB 323) (effective
July 1, 2024). The most pertinent addition is La. R.S. § 22:1892.2, which now governs claims for
3 Rec. Doc. 10-1, July 15, 2025 Demand Package.
4 Rec. Doc. 9-1, Memo. in Support of Mot. to Stay, at 2.
5 Rec. Doc. 9-3, Letter Notifying Pls. of Noncompliance.
6 Rec. Doc. 9-5, Cure Period Notice.
7 Rec. Doc. 9-1 at 2.
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catastrophic property losses, such as hurricane damage. The statute imposes new deadlines for
insurers to issue payment following receipt of satisfactory written proof of loss. The insurer’s
failure to comply with these deadlines entitles the insured to recover a 50% penalty, plus proven
economic damages, attorney’s fees, and costs – provided the failure is found to be arbitrary,
capricious, or without probable cause. LA. R.S. § 22:1892.2(B)(1). However, section 1892.2(C)
also mandates a sixty-day “cure period notice” before the insured can file a bad faith suit seeking
statutory penalties. This cure period notice requires the insured to provide a “formal written
demand providing sufficient notice of the facts and circumstances of the dispute.” LA. R.S. §
22:1892.2(C)(2). Importantly, “if any suit is filed prior to transmitting the cure period notice […]
it shall be automatically stayed until sixty days after the cure period notice is received.” And “the
delay for answering any suit shall automatically be extended until thirty days after the end of the
cure period.”
Insurers have a major incentive to “cure” the alleged violation by paying the amount
alleged in the proof of loss together with actual expenses and attorney’s fees. If the insurer pays
the full amount sought in the notice within sixty days, the insured has no further cause of action
under section 1892.2, meaning that they cannot seek the 50% penalty otherwise available. If the
insurer makes only a partial payment, the penalty on the amount paid is reduced by half. Although
the issue of whether the insurer owes penalties if it does not tender payment within the statutory
deadline is still a question for the fact finder, section 1892.2 gives insurers at least one avenue to
avoid penalties as a matter of law.
III. DISCUSSION
The issue before the Court is whether Plaintiffs’ July 15, 2025, letter to ATIC complied
with the pre-suit parameters of La. R.S. § 22:1892.2. If not, the statute entitles ATIC to a sixty-
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day stay and a thirty-day extension to file responsive pleadings. As a condition precedent to
bringing suit, Plaintiffs must send “written notice of the violation,” which the statute refers to as
the “cure period notice.” LA. R.S. § 22:1892.2(C)(1). The notice must be a formal written demand
that contains “sufficient notice of the facts and circumstances of the dispute.” LA. R.S. §
22:1892.2(C)(2). Plaintiffs argue that their original demand package “provided comprehensive
information about the Hurricane Francine damages” in accordance with the statute’s requirement.
However, even if the letter satisfactorily represented the facts, it is still inadequate as a cure period
notice because it only informed ATIC of the property damage, not of its violation of the statute.
At the time of their July 2025 communication, ATIC had not previously received a written proof
of loss which would trigger the sixty or ninety-day deadline for payment. As such, Plaintiffs could
not have alleged that ATIC violated section 1892.2 because the deadlines for transmitting payment
had not passed. Therefore, the Court finds that Plaintiffs’ July 2025 demand package does not
qualify as a “cure period notice” as described by section 1892.2 because it failed to notify ATIC
of any “violation.”
Plaintiffs argue that “it would be absurd to require a separate, additional notice beyond the
comprehensive demand package provided.” However, this is exactly what the statute requires. As
Plaintiffs point out, “when interpreting statutes, Louisiana courts start with the language of the
statute itself.”8 Section 1892.2 begins by describing the deadlines for transmitting payment after
receipt of written proof of loss – within sixty days for residential properties and within ninety days
for all other immovable property. Next, it describes the penalties owed if the insurer does not
comply with those deadlines. Then, it states “[a]s a condition precedent to bringing an action
pursuant to this Section, the insurer shall be given sixty days’ written notice of the violation by
8 Rec. Doc. 10 at 4.
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the insured or his representative, hereinafter referred to in this Section as the ‘cure period notice.’”
LA. R.S. § 22:1892.2(C)(1) (emphasis added). When interpreting a law, the Court must presume
“that every word, sentence or provision in a statute was intended to serve some useful purpose,
[…] and that the Legislature used no unnecessary words or provisions.” Sultana Corp. v. Jewelers
Mut. Ins. Co., 860 So.2d 1112, 1119 (La. 2003). It would be illogical to conclude, as Plaintiffs
imply, that a “proof of loss” constitutes a “cure period notice” when the Legislature uses both
terms in the same statute.
While there is a lack of jurisprudential guidance for interpreting La. R.S. § 22:1892.2, it is
clear to the Court that Plaintiff’s July 2025 letter, designated as a “proof of loss,” does not qualify
as a cure period notice.
Accordingly;
IT IS ORDERED that the Motion to Stay and Extension of Responsive Pleading
Deadline (Rec. Doc. 9) filed by Defendant is GRANTED.
February 18, 2026
_______________________________
JAY C. ZAINEY
UNITED STATES DISTRICT JUDGE
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