As hurricane claims attorneys on both sides of the “v.” in litigation know, a fundamental tenet of Louisiana Law is that “[A]n insurer has a continuing duty of good faith and fair dealing which extends throughout the litigation period.” 1 Mental anguish, emotional distress, humiliation, aggravation, inconvenience, loss of property, loss of use, and defense costs incurred in underlying actions resulting from an insurer’s breach are compensable general damages for breach of the duty of good faith and fair dealing. In other words, this breach results in bad faith, and the insurer’s bad faith leads to damages. Damages caused by the insurer’s bad faith are compensable under Louisiana Revised Statutes 22:1973, regardless of the insurer’s intent. Arguably, this applies to all interactions that the insurer and their counsel have with their insured. This could not be more evident than in the case of Thibodaux v. State Farm Fire and Casualty Company, 2 which is discussed below.
In Thibodeaux v. State Farm, 87-year-old widow Elrine Thibodeaux’s home was devastated by Hurricane Laura on August 27, 2020. Elrine’s son, Stephen, lived with her and took care of her. On October 1, 2020, State Farm’s adjuster completed the initial inspection of Elrine’s home, estimating the loss at $26,719.10, and she was paid $8,960.25 after subtracting her deductible of $11,155.00 and depreciation of $6,603.85 from the estimate. Residential property damage lawyers should not be surprised that this amount was insufficient to even pay for the roof, and the 87-year-old widow began receiving collection letters from a law firm retained by the roofing company. State Farm only made one timely payment in the amount of $8,960.25 under all of the coverages under the policy – within thirty (30) days of receiving satisfactory proof of loss. State Farm made no further payments on the claim.
Desperate to have her home repaired, the 87-year-old widow sought financing from a private lender to repair her storm-ravaged home – a loan to pay for contractors to repair storm damage that State Farm was contractually obligated to pay for. The total amount Elrine was forced to finance in repairs to her home and other structures was a staggering $191,599.66. To make matters worse, she then had to pay an additional $1,000.00 in emergency repairs to tarp the roof and preserve the property from further damage. Shockingly, the actual cost of Elrine’s storm damage was 620.831% higher than State Farm’s initial lowball estimate. This incongruence in the actual cost of damages and State Farm’s dubiously low estimate, combined with the pittance they paid, comes as no surprise to residential property damage attorneys. Insurers like State Farm are ruthlessly systematic in their consistency with underestimating claims like Elrine’s.
During the interior repairs of her home, the 87-year-old widow was forced to live in the Super 8 on Martin Luther King Blvd in Lake Charles. Her son, Stephen, who is her caregiver, used his life savings to rent two rooms (one for him and one for his mom) at the Super 8 for five months, totaling $37,069.73. State Farm paid NOTHING toward the additional living expenses. In fact, State Farm doubled down on its denial of reimbursement and argued that despite her son Stephen being a full-time live-in caregiver, he was not entitled to reimbursement for his mother’s hotel room since he was not a named insured under the policy. Hurricane claims attorneys who litigate claims regularly understand how tenuous such an adverse posture was for State Farm in this litigation.
Not only was State Farm’s adjustment of the claim in bad faith, but during the litigation period, even a cursory review of the case filings supports the jury’s verdict of $240,000 for mental anguish caused by State Farm. Instead of State Farm using Elrine’s deposition to lead to reasonably calculated discoverable information, they used this opportunity to personally attack Elrine and make the proceeding as excruciatingly tortuous and as miserably agonizing as possible. 3 During the deposition, Elrine repeatedly told State Farm’s attorney that she had health issues affecting her deposition, including that she is: hard of hearing; her body doesn’t work anymore; has scoliosis; gets very upset; has issues with her blood pressure; gets tired; her spine is crooked which causes pain; she started not to feel well; was hurting; doesn’t walk well; can’t work anymore; can’t stand long or walk distance, and during her depo she started “losing energy.” She felt like the attorney for State Farm was trying to make her have a stroke and break her down, and at that point, she was just trying to survive because of the stress of the deposition.
Despite State Farm’s acute awareness of Elrine’s numerous health conditions, they chose to interrogate her with rapid-fire machine-gun questions about several issues that were utterly irrelevant to her Hurricane Laura Claim. This included asking about her marriage in 1960, when she has been widowed since 1977; asking about her employment as a janitor at McNeese when she has been retired for more than twenty years; asking about her checking account; asking about her income from her pension; asking how many times her adult children bring her lunch; asking about birthday gifts she receives from her family, and many other issues that were wholly irrelevant to the Hurricane Laura claim. State Farm squandered more than four hours questioning the widow about non-issues that were inappropriate and unjustifiable in light of her health condition and the facts of the claim.
Finally, after enduring more than four hours of arduous and abusive interrogation at the deposition, Erline could not take anymore and walked out. The deposition transcript bears out the astronomical toll this four-hour ordeal had on this 87-year-old widow. Astoundingly, State Farm was relentless in its pursuit to continue deposing Elrine. State Farm remained undeterred despite the filing of a protective order and her treating physician opining that due to her health conditions, she should not be deposed any further. Incredulously, despite the order and medical opinion to the contrary, State Farm continued to insist on deposing Elrine.
State Farm’s antics did not stop there. In fact, State Farm took an antagonistic and unrealistically adverse position when it refused to release the reserve amounts set for Elrine’s claim and went a step further and redacted that information in her claim file. However, the court disagreed with State Farm, and Elrine was victorious. Not only did the court order State Farm to release the reserve amounts, but it also ordered State Farm to pay all of the attorney fees incurred. 4
State Farm’s antagonistic and adverse posture in this matter was to their detriment. The jury found that State Farm was arbitrary, capricious, and without probable cause in failing to pay the amounts owed within thirty or sixty days after receiving satisfactory proof of loss. At the end of the trial, the jury’s verdict against State Farm was staggering – $240,000 in damages for mental anguish. Additionally, the jury awarded the octogenarian contractual damages as follows:
Dwelling $136,280.22
Other Structures $12,212.00
Additional Living Expenses: $35,677.34
The total contractual amounts the jury awarded total $184,169.56. Penalties of 50% under Louisiana Revised Statute 22:1982 would be assessed on that amount, totaling $92,084.78. The total contractual amounts owed and penalties combined under normal circumstances would be $276,254.34. That would be an impressive verdict.
However, in this case, considering the abhorrent impermissible conduct of State Farm in handling this claim during the adjustment period and the litigation period, that amount would be insufficient to penalize the mega-insurer. The penalty afforded under §22:1973 5 is much more punitive, intended to prevent egregious conduct as demonstrated in this case by State Farm. Under §22:1973, the penalty is two times the actual consequential damages sustained by the policyholder, plus attorneys’ fees and costs. 6
Strategically, during post-trial litigation to calculate the penalty, attorney fees and costs, the widow will likely advocate that State Farm pay penalties under §22:1973 of $480,000.00, which would increase the amount of the verdict for mental anguish damages exponentially. In addition to the attorney fees and costs that the widow is entitled to under §22:1973, the verdict communicated a clear and distinct message – the citizenry and the juries in the State of Louisiana will not tolerate insurers engaging in bad faith conduct and conduct that shocks the conscience whether during the pre-litigation adjustment period or during litigation.
Residential property damage attorneys who represent policyholders should scrutinize the aspects of this case that may help them buttress their bad faith claims against insurers in their own cases. Hurricane claims attorneys who are representing the insurers should consider this a cautionary tale about the perils of engaging in bad faith adjustment and litigation tactics with the policyholder, as well as required reading for every senior adjuster who protects the insurers’ coffers by supporting or recommending such tactics.
1 Sher v. Lafayette Ins. Co., 988 So. 2d 186 (La. 4/8/08), on reh’g in part (July 7, 2008).
2 Thibodeaux v. State Farm, No. 2:22-cv-06252, (W.D. La. February 13, 2025). [Rec. Doc. 125].
3 Thibodeaux, [Rec. Doc. 18, Exh. B].
4 Thibodeaux, [Rec. Doc. 21, 53].
5 Louisiana Revised Statute 22:1973 was repealed in 2024 but would be applicable as this litigation was filed prior to the repeal, and it is substantive in nature.
6 Durio v. Horace Mann Ins. Co., 74 So.3d 1159 (La. 2011).
