State: 
Louisiana
Year: 
2018
Case Number: 
Docket No. 17 00896-CA
Court: 
Louisiana Court of Appeal, Third Circuit
Issue: 
Ten-year prescriptive period for bad faith refusal to pay claim
Duty of good faith and fair dealing

In its brief UP argues taht the District Court erred in maintaining Star Indemnity & Liability Insurance Company's Exception of Prescription to Fils' First Supplemental and Amending Petition seeking penalties and attorney's fees because:

  1. The ruling is contrary to well-settled Louisiana law that insureds are

    protected by a ten-year prescriptive period for these claims;

  2. The ruling conflicts with the Louisiana Supreme Court’s holding that “an insurer has a continuing duty of good faith and fair dealing which

    extends throughout the litigation period;”

  1. The ruling encourages litigation by forcing insureds to file protective suits against their insurers for bad faith penalties every time a denial of coverage letter is issued – even if the “bad faith” acts have not yet occurred;

  2. The ruling provides insurers with carte blanche immunity to act in bad faith once a year has run from the issuance of a denial of coverage, which will incentivize insurers to deny claims and engage in bad faith activities; and

  3. The ruling deprives insureds of their access to courts to sue for acts of bad faith occurring one year after their insurer denies coverage. 

 

Author: 
Andrew Veazey