An Insurer's Duty: To Defend or Not To Defend

Fortunately, the 2024 hurricane season has been relatively calm. We previously blogged about steps that can be taken after your property is damaged by a hurricane or other natural disaster. (Click here to access our prior blog). With a Tropical Storm, and potential Hurricane, threatening our coast, here are some steps to consider taking to prepare before a storm arrives in the event you must make a property insurance claim for damages after the storm:

• DOCUMENT, DOCUMENT, DOCUMENT – The best way to prove the condition of your property before damage is caused is to document it. Take pictures and videos of the interior and exterior of your home or business. Create an inventory of your contents. Narrate the video to provide better descriptions. If your property is damaged, this documentation will be used to verify its condition and make it easier for your insurer to adjust and pay your claim.
• INSPECT YOUR PROPERTY – As you are making your preparations, you may consider taking a walk around your property to notice any prior damage to your property. Identify any issues that could affect a potential insurance claim.
• KNOW YOUR INSURANCE COVERAGES – Make sure you are aware of the coverages that your insurance policy provides. The Declarations Page to your policy should provide much of this information – the coverage limits, types of coverage provided, deductible, etc. While your insurance agent likely maintains this for you, it is good practice to maintain and know this information, which lets you know what will or will not be covered.
• MITIGATE YOUR DAMAGES – You can take steps to prevent damage to your property during the storm. You can pick up items around the property that could become airborne and take whatever precautions you can to prevent damage to your property, particularly the exterior. If your property is damaged, you can make temporary repairs to prevent further damage until your insurance company can get to you (like placing a tarp on the roof).

In 2024, the Louisiana Legislature revised La. R.S. 22:1269, the Louisiana Direct Action Statute, to provide an injured person “shall have no right of direct action against the insurer” unless one of several exceptions applies. This legislation took effect on August 1, 2024. Since its effective date, litigants in Louisiana have debated whether this change to the law was substantive or procedural. If the amendment were procedural, it would apply to all cases filed after August 1, 2024. If substantive, the changes would only apply when the accident occurred after August 1, 2024.

While several Federal Court cases previously addressed this issue, no Louisiana appellate court had done so until the Louisiana Fourth Circuit Court of Appeal issued its ruling in Hurel v. National Fire and Marine Ins. Co., et at.

In Hurel, the plaintiff filed suit on October 1, 2024, naming the insurer and other parties as defendants in a case filed in connection with a motor vehicle accident. The insurer filed an Exception of No Right of Action, Motion to Strike, and a Motion in Limine, on the basis that the amendment to the Direct Action Statute prohibited the plaintiff from (1) naming the insurer in the case caption and (2) presenting evidence of insurance coverage at trial. In response, the plaintiff argued that the amendment could not apply because the accident occurred before the effective date of the statutory amendment. The trial court denied the exception, the motion to strike and the motion in limine.

On appellate review, the Louisiana Fourth Circuit cited prior jurisprudence that routinely found the Direct Action Statute granted a procedural right of action against an insurer where the plaintiff has a substantive cause of action against the insured. The Court found the recent amendments “removed the procedural right of action against an insurer.” The plaintiff had a procedural right of action, but it became operative only when, and if, that right was invoked timely— that is before the amendment went into effect.

After August 1, 2024, the plaintiff had no right or interest in a direct action against the insurer. Thus, because the plaintiff did not have a statutory right of direct action against the insurer, the Court granted the insurer’s exception. For the same reasons, the court of appeal also granted the insurer’s Motion in Limine to prevent plaintiff from disclosing insurance coverage to the jury and granted its Motion to Strike the insurer’s name from the case caption.

Reference:

Hurel v. Nat'l Fire & Marine Ins. Co., 2025-0049 (La. App. 4 Cir. 3/11/25), --- So.3d ---, 2025 WL 762645.

Courts across the country now grapple with the changing face of trials in a time of social distancing and spikes of COVID-19 complicated by the confines of the courtroom. Attorneys and litigants must also adapt to this new “normal.” In this setting, an older law may help to bring new technology into the courtroom.

COVID-19 spawned the immediate use of videoconferencing and other technology in the courtroom. Fortunately, over a decade prior to the current pandemic, the Louisiana Legislature adopted Louisiana Civil Code of Procedure article 1633.1 which expressly provides for live televised testimony at a trial. Pursuant to Article 1633.1:

The court may order, upon a showing of appropriate safeguards, live testimony of a witness to be presented in open court by teleconference, video link, or other visual remote technology, if the witness is beyond the subpoena power of the court or when compelling circumstances are shown. The order may be entered at a pretrial conference or, in exceptional circumstances, on motion set for hearing at least ten days prior to trial or at another time that does not prejudice the parties.

The Article, titled “Live trial testimony by video,” does not limit the live video testimony feature only at trial. Commentary suggests that the term “trial” is intended to include evidentiary hearings on exceptions as well as summary matters. The comments further provide that a showing must be made to the court's satisfaction of appropriate safeguards, such as (1) reliable transmission procedures and image quality, (2) an orderly process for reference to exhibits by the witness and all counsel or parties conducting the examination, and (3) an absence of any outside influence on the witness during testimony. Even if all the parties agree to the use of live televised testimony, the Article nevertheless requires a court order.

Pursuant to the Article, the court may order televised testimony when “compelling circumstances are shown.” These circumstances may exist where a witness has a pre-existing condition or is restricted from live attendance by their physician. They may also exist for witnesses barred from work-related travel by their employer.

Although adopted in 2007, Article 1633.1 remains largely unused by both courts and litigants; it appears its time has come.