Articles Posted in Notes from the Attorneys

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What is good faith and fair dealing? Is this a term that is used out of habit that doesn’t carry much weight, or can and will it be enforced by the courts when violated?

According to the Louisiana Revised Statutes definitions 26:802 (6), “good faith” means honesty in fact and the observance of reasonable commercial standards of fair dealing in the trade. Another definition of good faith is “honesty”; a sincere intention to deal fairly with others. It is not just important to be fair, but the sincerity behind the intention is key. In every contract there is an implied duty of good faith and fair dealing. This means that in every contract it is suggested, but not directly expressed that the persons in the contract will deal fairly and honestly with one another. Good faith is a term that has a sincere motive without any desire to defraud others.

Fair dealing goes hand in hand with good faith when under contract. Fair dealing is not just honesty, fair dealing requires that a party cannot act contrary to the spirit of the contract even if you give the opposing party notice that you intend to do so. The term “good faith” comes from the translation of the Latin term bona fide. In the court system these two terms are used interchangeably. When the court system is determining if a party has breached a contract they have to look to see if the parties have upheld the duty of good faith and fair dealing. This means the parties must not do the following:

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People who own or have owned a home, car, or business have insurance on those items. The reason people buy insurance is to ensure their assets are protected in the event of an accident or an unexpected disaster. If someone is injured in an accident, whether it is a car accident, offshore accident, a slip and fall, or even if a hurricane or tsunami comes through, chances are the damage done should be covered by an insurance policy. Why wouldn’t the claim be covered? There are many reasons a claim will get denied, often times claims are denied because of avoidable reasons such as the claim was not filed in the time limit allowed by the law. The deadline to file depends on which law is applied. The law that is applied can be determined by many different factors. The Situs rule can apply, the business contract or insurance contract can determine which law is applied. The conflict of laws analysis, which interest is stronger, can determine which law will be used.

When filing a claim for an offshore incident, where it happened is very important for what law applies and therefore what deadline will be enforced. If an explosion happens offshore, where it happened is crucial. In law, the Situs of property is where the property is located for legal purposes. This is important in determining jurisdiction and which law will be applied. If it is off the coast of Louisiana, one law will apply, if it is off a different states coast it can be an entirely different law. Even the distance off the coastline can change which law is applied and can change the deadline drastically.

When filing a claim for an automobile accident, state law will have jurisdiction, but sometimes a conflict of laws can make it unclear which state will have jurisdiction. A conflict of laws principle is a set of rules for determining which law to apply in a case over which two or more contradictory laws seem to have jurisdiction. For example, if the car accident occurs in Georgia, but the driver of vehicle one is from Texas, the at fault driver of vehicle two is from Florida, but the cause of the accident was because of a tire blowout from a defective manufacturer from Tennessee. Which state law will apply? It will be left up to the courts to determine this. The state you thought would have jurisdiction might have a two year prescription, but the state the court decides has jurisdiction may only have a one year prescription.

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If you live along the coastline of Louisiana, you are no stranger to hurricane season. Every year residents and business owners try and prepare for hurricane season by securing their properties and following the suggestions and guidelines of authorities. Even with the best preparations, homes and businesses can be severely damaged or destroyed after Mother Nature has her way. When these disasters strike, do you know if you have the right insurance coverage to cover the damages?

If you have a business, you most likely have a general liability insurance policy and possibly a Business Interruption Insurance policy. A Commercial General Liability policy is a type of insurance policy that provides coverage to a business for bodily injury, personal injury, and property damage caused by the business operations, products, or injuries that occur on the business premises. Business Interruption Insurance is insurance coverage that replaces business income lost in a disaster. Business Interruption insurance is usually attached to a property or business owner’s policy, since it cannot be purchased on its own.

In order for a Business Interruption claim to be covered because of hurricane damage several things will have to be proven:

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Was your business closed down or interrupted due to government orders, or from employees or customers being exposed to or diagnosed with Covid-19?

The U.S. department of labor estimates that forty percent of businesses do not reopen after suffering a disaster, and that twenty five percent of the ones that do reopen fail within two years. Most large and approximately forty percent of businesses carry business interruption insurance for times such as this. Business Interruption (BI) insurance is insurance that replaces income lost in the event that business is halted due to a loss or damage. The purpose of business interruption insurance is to do for the business what would have been done for itself. Business Interruption can happen because of multiple reasons such as fire, theft, or other natural disasters which can cause direct physical loss. When these losses occur, most BI policies will cover profits that would have been earned, fixed costs, a new temporary location, commission, training costs, and extra expenses. It would be beneficial to look at the monthly income, tax returns, contracts, leases, bills, and invoices from pre Covid-19 closures, and compare it to after. Your policy may cover most of these costs. Your policy may also cover extra expenses that you didn’t have before, such as extra gloves, masks, and extra cleaning supplies.

The question most business owners are facing now is will their business interruption insurance policy cover losses due to viruses, bacteria, or government ordered closures? The answer here unfortunately is not simple or always clear, it depends on the policy, and how the language of that policy is interpreted. There have already been more than four hundred and fifty lawsuits and dozens of class actions filed since the end of June, 2020. As you can imagine, regardless of the language in each policy, the insurers and the policyholders will be arguing over whether the virus should be covered or not. It is being left up to the interpretation of the courts and the state laws in each state to determine if these businesses will be able to collect on their policies.

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If you thought the CDO caused a real estate crash that could have been avoided with proper regulation, you are going to be pleased to know that the next example of why voters are sick and tired of Washington ineptness is upon us and it could cost us a bundle. The October 2013 Real Estate Crash may be delayed by delaying the implementation of the Biggert Waters Act of July 2013, revising the National Flood Insurance Program (“NFIP”), but Congress will need to act quickly. National attention was focused on the problem with the poorly operated and under-funded NFIP, now part of FEMA, when Super Sandy hit New York City and New Jersey. Since then, the NFIP has been borrowing from the general budget to cover the cost of payments of flood insurance claims.
Although Sandy’s waters have retreated, the problem with the Biggert-Waters Act is that the intended remapping of flood zones has not occurred as required under the act and yet the act calls for an end to subsidized rates for property owners whose property is identified by FEMA as flood prone. For example, after Sandy, FEMA released new “preliminary” flood insurance maps for New York City, replacing “advisory” maps sent by FEMA immediately after Sandy. Using theoretical data, which is admittedly wrong in many instances, FEMA now shows a significant increase in the number of homes and businesses subject to flooding. For instance, in New York City, the new maps double the number of city structures in flood zones to more than 67,000 over the last map update in 2007, which was based on 1983 data.
Some will say this is only fair, those building in flood prone areas should simply know better. But the federal flood program facilitated lending and building in these areas through the use of the NFIP for years. Federally insured loans require flood insurance guaranteed by the federal government. And the insurance is completely at the risk of the federal government – private insurance companies have any risks from participating in the NFIP Write Your Own program.
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The deadline to file seafood compensation claims will expire January 20, 2013!

Section 5.11.9 of the Economic & Property Damages Settlement with BP mandates that all Seafood Program Compensation Claim Forms must be submitted within 30 days of the entry of the order and judgment approving the settlement by the District Court.

Because Judge Barbier approved the Economic & Property Damages Class Settlement on December 21, 2012, all Seafood Program Compensation Claims should be submitted to the Deepwater Horizon Court-Supervised Settlement Program by January 20, 2013.

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For those of you unfamiliar with insurance-related appraisal process, as an alternative method of resolving insurance disputes, you should note that most insurance policies provide that after an insurance company has had the opportunity to adjust a claim, if there is disagreement, either side may request a form of arbitration called “appraisal.” The time to request the appraisal is not limited, in most instances, and has been condoned by the courts even after law suits are filed and discovery has begun. It is common for insurance companies to assign a favorite son as their appraiser and to invite the insured-plaintiff to appoint an appraiser. The two appraisers select an Umpire, who is asked to decide the case if the appraisers are unable to agree on the amount of damages.

One would think that the appraisal process eliminates the need for the law suit, however, most policies provide that even after the appraisal process is completed, the Umpire has ruled, the case may be litigated by the insurance company. It need only refuse coverage, or deny the claim, requiring litigation. Delays by the insurance company appraiser are common place in our experience, driving to the extreme the time and cost of the adjustment process. Further delays without repairs under the first party property and casualty policy work in Texas without the real prospect of penalties for late payment. Where the prospect of penalties was present in the law suit, the delays and abuses of appraisal are seldom considered by Texas courts to justify penalties for arbitrary and capricious refusal to pay, even where the Umpire rules that the damages are due and is evident that the insurance company had no legitimate basis to refuse to pay.

Of course, by its very nature, the appraisal process calls for an expedited alternative dispute resolution process, however, because it is not final, because it leaves to the insurance company the right to accept or reject the findings and there are not any penalties for arbitrary and capricious refusal to pay in Texas, the process operates to frustrate claimants and the lawyers hired to help prosecute claims for the insured. The insurance company right to reject the appraisal process after it is completed is just one of the several obstacles placed in the way of legitimate claims. Another is the assertion without basis by insurance companies in Texas that the appraisal process should be handled like “baseball arbitration,” where the Umpire is limited to accepting either the insurance appraisal or the claimant appraisal. The recent case of Providence Lloyds Ins. Co. v. Crystal City Ind. School Dist., 877 S.W. 872 (Tex App. San Antonio 1994) shows the claim of an insurance company to baseball arbitration. In that case the appellate court reversed the trial court ruling with the following ruling against baseball arbitration:

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Valuation of community assets is determined as of time of trial on the merits of partition suit, as those assets can appreciate or depreciate in value. However, valuation of marital debt as of date of filing of divorce petition, and not as of date of trial on the merits of partition suit, was found proper, in Pitre v. Pitre, 501 So.2d 344 (La.App. 3 Cir.,1987).
If you hold an interest in any type of business partnership, the following ruling from the D’Spain case will impact the partitioning of your interests. Indeed, upon dissolution of community of acquets and gains in that case, the partner’s wife did not receive any interest in partnership, but was entitled only to one half of value of partner’s interest in partnership assets. D’Spain v. D’Spain, App. 5 Cir.1988, 527 So.2d 309. Here, proper timing, filings, and, potentially, the inclusion of an accounting expert or CPA will benefit your case. You will need an experienced attorney to ensure your business interests are protected.

Contact Thornhill Law Firm for advice and assistance in this important area of domestic/family law. https://www.thornhilllawfirm.com/

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BP claims and claimants:

The trial against BP, Halliburton and Trans Ocean is set for trial January 14, 2013, to determine punitive damages owed under the maritime law. In a true limitaions action, the unresolved issues include claims among the defendants for which Judge Barbier will apply various laws, e.g., admiralty law and the Oil Field Pollution Act. The trial on punitive damages may enhance your claims under the pending settlement of economics and medicals claims. Settlement of your claims under the pending settlement will bar all future claims against BP and the long list of defendants who are beneficiaries of the transaction and compromise. For more information on the list ofclaims barred by the settlement or your rights in the pending multi-district litigation, contact Thornhill Law Firm.

International Paper and Temple-Inland: Bogalusa paper mill suits filed:

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In Louisiana, Succession is the transmission of the estate of a deceased person to his successors. La. C.C. art. 871. The successors thus have the right to take possession of the estate of the deceased after complying with applicable provisions of law. Succession occurs at the death of a person. La. C.C. art. 934. There are two kinds of successions: Testate and Intestate. When this transmission is done by operation of law, it is called intestate succession. When it is done through the provisions of a will (also called a testament), it is called testate succession. La. C.C. arts. 873-875. The estate of a deceased person means the property, rights and obligations that a person leaves after his death, whether the property exceeds the charges or the charges exceed the property, or whether he has only left charges without any property. The estate includes not only the rights and obligations of the deceased as they exist at the time of death, but all that has accrued thereto since death and the new charges to which it becomes subject. The estate in Louisiana, however, has no separate legal existence like a corporation or partnership does. In re Succession of Moore, No. 97-1668 (La.App. 4th Cir. 1998), 737 So.2d 749. The successors to a deceased person’s estate are called heirs when there is intestate succession and legatees when there is testate succession. La. C.C. art. 876. The right to take possession of property, whether the person receiving the property is an heir or a legatee, does not arise automatically. In Louisiana, the heirs or legatees must comply with certain provisions of the law. Usufruct is the right to use property during the existence of the usufruct period to the exclusion of the owners of the property. La C.C. arts. 535, 539. In Louisiana, it is actually a limitation on the right of ownership, where the right to use the property is granted to a person different than the owner. The owner of property subject to a usufruct is called the naked owner. Forced heirs are descendants of the first degree who, at the time of the death of the decedent, are twenty-three years of age or younger or descendants of the first degree of any age, who, because of mental incapacity or physical infirmity, are permanently incapable of taking care of their person or administering their estates at the time of the death of the decedent. A person is twenty-three years of age or younger until he/she attains the age of twenty-four years. The existence of forced heirs is irrelevant if there is no testament left by the decedent.

https://www.thornhilllawfirm.com/