What Happens When Your Insurance Company is Acting in Bad Faith?

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Insurance companies have a legal obligation to pay their insureds for covered losses.  This is the primary reason why people seek insurance coverage in the first place. Insurance companies should minimize risk and provide financial protection in the event of an accident or loss.  As most Louisiana citizens know after the catastrophe of Hurricane Katrina, some insurance companies don’t hold up their end of the bargain in the event of a loss.  In fact, some insurance companies will accept premium payments from their insureds and when it comes time to pay on a claim, they leave their insureds out to dry.

Fortunately for Louisiana citizens, there are two “bad faith” statutes which provide strict requirements for insurance companies in the event that there is a claim.  These statutes protect individuals from being taken advantage of by the big insurance companies. 

The first bad faith statute is La. R.S. 22:1973.  This statute provides that insurance companies owe to their insured “a duty of good faith and fair dealing.”  The insurance company also has a duty to adjust claims “fairly and promptly and to make a reasonable effort to settle claims with the insured or the claimant, or both. Any insurer who breaches these duties shall be liable for any damages sustained as a result of the breach.”

If this provision did not make it clear enough, La. R.S. 22:1973, provides a list of acts which, if committed willingly, by the insurance company may create a presumption of bad faith:

(1)    Misrepresenting pertinent facts or insurance policy provisions relating to any coverages at issue.

(2)    Failing to pay a settlement within thirty days after an agreement is reduced to writing.

(3)    Denying coverage or attempting to settle a claim on the basis of an application which the insurer knows was altered without notice to, or knowledge or consent of, the insured.

(4)  Misleading a claimant as to the applicable prescriptive period.

(5)   Failing to pay the amount of any claim due any person insured by the contract within sixty days after receipt of satisfactory proof of loss from the claimant when such failure is arbitrary, capricious, or without probable cause.

(6)   Failing to pay claims pursuant to R.S. 22:1893 when such failure is arbitrary, capricious, or without probable cause.

The second bad faith statute in Louisiana is 22:1892.  Fortunately for individuals making a claim in Louisiana, this statute imposes strict requirements on their insurance company.  Specifically, 22:1892 requires:

·         Payment within thirty days of written settlement agreement; or a

·         Written offer to settle property damage claim within thirty days of satisfactory proof of loss.

Failure to pay the claim in a timely manner expose the insurance companies to penalties “in addition to the amount of the loss, of fifty percent damages on the amount found to be due from the insurer to the insured, or one thousand dollars, whichever is greater, payable to the insured.”  In large claims against an insurance company, this amount can be steep. If you feel like your insurance company is acting in bad faith in a personal injury case, property damage case, or any other type of claim, contact an attorney to assist you with navigating through the claims process.  Most personal injury attorneys do not charge any fees up front which greatly benefits the client.  In fact, the attorney often gets paid only after resolution of the case or claim.

What Happens When a Divorce Judgment is Obtained by Fraud?

Divorce litigation is often associated with acrimony and emotional turmoil. Families are divided and spouses often are going through extreme stress. This can create an atmosphere where spouses are often acting out and engaging in deceitful behavior. In certain circumstances, spouses may even move to obtain a divorce judgment by fraud or “ill practices” which may involve forgery or misrepresentation of facts. These actions may not only be considered criminal, but there may be extensive civil litigation which results from fraud.

One spouse may realize that they can “cut off” the other spouse from obtaining spousal support. Or, even worse, try to avoid paternity or child support by misrepresenting facts relating to minor children. A judgment of divorce obtained by fraud can have severe financial repercussions for those involved.

For the spouse who has been wrongfully divorced by a Judgment obtained by fraud, there is recourse. Louisiana Code of Civil procedure art. 2002 provides that:

A final judgment shall be annulled if it is rendered:

            (1) Against an incompetent person not represented as required by law.

 (2) Against a defendant who has not been served with process as required by law and who has not waived objection to jurisdiction, or against whom a valid final default judgment has not been taken.

           (3) By a court which does not have jurisdiction over the subject matter of the suit.

Louisiana Code of Civil Procedure art. 2004 also provides that:

A.  A final judgment obtained by fraud or ill practices may be annulled.

That being said, if a spouse suspects they have been divorced by fraud, there are some important limitations on bringing an action to annul a Divorce Judgment. First, the action to annul a judgment on these grounds must be brought within one year of the discovery by the spouse. La.C.C. Pro. art. 2004(B). Second, if the spouse engaged in the fraud, he/she may not be able to invalidate the judgment.

Louisiana courts have also acknowledged that annulling a Judgment of Divorce may have catastrophic effects on children and new spouses (who may find themselves in a bigamous marriage). The Louisiana Supreme Court stated in Wilson v. Calvin, 221 La. 451, 59 So.2d 451, 453 (1952) that:

“There is a strong public policy against disturbing or declaring invalid a judgment of divorce, especially after a long period of time where the marital status of innocent parties who relied on the validity of that judgment would be disturbed, and more particularly where a decree would render innocent parties guilty of bigamy and cast a cloud on the legitimacy of their children.”

If a spouse feels that they have been divorced as a result of fraud, that spouse should seek immediate legal counsel to discuss the available options. Every case is unique and should be evaluated based on its special set of circumstances.

What Happens if Your House Ends Up in a Tax Sale?

Life happens and sometimes bills go unpaid. In Louisiana, if you do not pay your property taxes, you may find your property being listed for sale in a tax sale.

What is a Tax Sale?

The purpose of tax sales is to collect taxes on properties. If property taxes go unpaid, the property goes up for a tax sale. Individual bidders will then offer to pay the taxes in exchange for an ownership interest in your property. This process will occur via a public auction.

The price of the sale is often the amount of taxes that are unpaid. The price can vary widely from $500 to $10,000. In order for the original owner to buy back the property, he or she must pay the tax sale purchaser the price that was paid at the tax sale, a 5% penalty, plus 1% interest per month, and all costs that the tax collector imposed on the property.

What happens if your house was sold at a tax sale?

Don’t panic. There are remedies. In Louisiana, the original owner typically has 3 years to “redeem” the property and buy back the tax title. If the property is deemed blighted or abandoned, the original owner has 18 months to buy back the property. The time limit starts from the date that the tax certificate is recorded.

What happens if my time limit to redeem the property has passed?

After the time limits set forth for redemption, the tax sale purchaser then has to file a Petition to Quiet Tax Title to finalize the process and become an “official” owner of the property. At this point, if you are the original owner, you should take two actions if possible: 1. File an Answer; and 2. File a Petition to Annul Tax Sale if there are good grounds.

The procedure for “quieting” the tax title is laid out in La. R.S. 47:2266. Moreover, Louisiana courts have held that all owners must receive notice of the tax delinquency and notice of the tax sale. If notice is not given, the tax sale may be deficient.

If your property is caught up in a tax sale, a consultation with an attorney is advised. If you are served with a Petition to Quiet Tax Title, make sure you seek legal counsel to get a thorough analysis of your particular situation. Every case is unique and nuanced and has its own set of special circumstances.