William Bayle v. Allstate Insurance Company

Case: 09-30161 Document: 00511200918 Page: 1 Date Filed: 08/11/2010

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit

FILED
August 11, 2010

No. 09-30161 Lyle W. Cayce
Clerk

WILLIAM BAYLE; DARLENE BAYLE

Plaintiffs - Appellants
v.

ALLSTATE INSURANCE COMPANY

Defendant - Appellee

Appeal from the United States District Court
for the Eastern District of Louisiana

Before DAVIS, WIENER, and SOUTHWICK, Circuit Judges.
WIENER, Circuit Judge:
In this appeal, we are called on to address one of the recurring questions
encountered in hurricane-related property insurance disputes that are governed
by Louisiana law: When the insured and the insurer agree that both a covered
risk and a non-covered or excluded risk caused some of the damage incurred by
the insured property, which party must bear the burden of identifying the
discrete item or items of property that were damaged and proving what portion
of the damage was caused by the non-covered or excluded risk? Here, siblings
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William and Darlene Bayle 1 sued Defendant-Appellant Allstate Insurance
Company (“Allstate”), which had issued the Bayles’ homeowners policy. They
alleged that (1) Allstate failed to indemnify them adequately for wind-caused,
structural damage2 to their property, and (2) Allstate wrongly employed the
“actual cash value” (“ACV”) of the property rather than the “building structure
reimbursement” standard to calculate the dollar amount of structural damage
caused by wind. The Bayles also claim statutory penalties against Allstate,
alleging that it arbitrarily and capriciously refused to pay their wind damage
claims timely.3 The district court granted Allstate’s motion for summary
judgment and dismissed the Bayles’ action.4 We affirm.
I. Facts & Proceedings
A. Background
Hurricane Katrina caused considerable damage to the Bayles’ property in
Chalmette, Louisiana. Ms. Bayle evacuated before the storm, and no one was
present in the house when eight to ten feet of water (mixed with escaped oil from
a nearby Murphy Oil storage tank) flooded the Bayles’ one-story house. The
damage to the house and a storage shed was, by all accounts, extensive,

1
Only Darlene Bayle occupied the insureds single-family, single-story residence at
issue here.
2
In the district court, the Bayles also challenged the amount that they recovered for
damage to contents and “additional living expenses” (“ALE”) in the district court, but they
appear to have waived entirely their contents and ALE claims on appeal.
3
LA . REV . STAT . ANN . §§ 22:1220 & 22:658, redesignated §§ 22:1973 & 1893 by Acts
2008, No. 415, §1, eff. Jan. 1, 2009. .
4
The district court had also granted Allstate’s motion to exclude a supplemental expert
report by the Bayles’ expert. The Bayles do not appeal the exclusion of their supplemental
expert report.

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although the record reveals that little of the damage appears to have been
caused by wind.5 Ms. Bayle testified that, when she returned to view the
wreckage, she saw just one cracked window pane in one of the bedrooms and
that she was not able to look in the attic for roof damage. In his deposition
testimony, Mr. Bayle noted that, when he viewed the damage in November 2005,
he saw one or perhaps two small window panes that were broken, but conceded
that these could have been damaged by vandals. Neither of the Bayles was able
to identify or specify any structural damage that had gone uncompensated or,
for that matter, any items damaged by wind whose repair costs exceeded the
amount paid by Allstate; the Bayles’ expert’s report was silent on both issues.
In October 2005, the first claims adjuster was sent by Allstate to inspect
the Bayles’ property. He noted that the water line on the exterior of the house
was ten feet above grade level and that an interior water line was eight feet
above floor level. He observed severe damage to the interior and to the contents
of the house, all of which he attributed to flood. He added that no contents could
have been salvaged. Subsequent adjusters for Allstate inspected the roof and
found a number of shingles missing and some damage to the gutters, but saw no
substantial structural damage. They also reported that the storage shed had lost
a side window to wind and that some items inside the shed appeared to have
been exposed to rain water before the flood water arrived.

5
Aronson v. State Farm Fire and Casualty Co., 969 So.2d 671, 675 (La. App. 4th Cir.
2007) (explaining that evidence of a “wind-created opening and the passage of rain through
those openings into the damaged property are conditions precedent to recovery” and that “[i]n
order to satisfy the aforementioned conditions, the insured need not establish that the wind
actually created a hole in the structure, but instead must only demonstrate that the direct
force of the wind created an opening in the building through which water entered.”) (citing
COUCH ON INSURANCE § 153:17 (3d ed. 2006)).

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At the time of the hurricane, the Bayles’ property was insured under an
Allstate homeowners policy that covered wind damage and under a separate,
National Flood Insurance Policy (“NFIP”) that covered flood damage. As the
administrator of the federal flood policy, Allstate paid the Bayles the full policy
limits of $75,000 for structural damage and $30,000 for contents, for a total of
$105,000 in flood damage. Under its homeowners policy, Allstate paid the Bayles
$3,628.87 for structural damage to the roof, $8,804.22 for personal property, and
$5,127.64 in additional living expenses (“ALE”), for a total of $17,560.73 in wind
damage.
The overall damage to the house was sufficiently severe that the Bayles
elected not to repair it; instead, they “sold” it and the lot for $64,000, unrepaired,
to Murphy Oil in connection with the settlement of their petroleum spill claim.
The remnants of the house were subsequently demolished. The record does not
reflect that either of the Bayles objected to or otherwise contested Allstate’s
adjustment of their claim before they filed suit in August 2007. In doing so, the
Bayles joined twenty-eight other state court plaintiffs.
B. District Court Proceedings
In February 2008, following removal from state court, the district court
ordered the cases severed, and the Bayles filed their individual complaint the
next month. In November 2008, Allstate filed a motion for summary judgment
seeking dismissal of the Bayles’ action.
The Bayles’ homeowners policy provides that, if the insureds do not repair
their damaged property, payment under the policy “will be on an actual cash
value basis.” In support of its motion for summary judgment, Allstate offered
three expert-witness reports to substantiate the ACV of the Bayles’ property and

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to justify the sums that Allstate had already paid them under its policy’s wind
coverage. Allstate’s first expert report, prepared by Timothy O’Brien in
November 2008, offered a “drive-by” market-value appraisal of the then-vacant
lot, and determined its ACV to be $10,000.
Allstate offered a second expert report by an engineering and construction
firm, O’Keeda Company, LLC (“O’Keeda”), which reviewed the damage to the
house relative to the payments made under the flood and wind policies. O’Keeda
too performed its review in November 2008, basing it on photographs,
videotape, adjusters’ reports, and the Bayles’ deposition testimony. The O’Keeda
report stated that the roof of the house was “completely unscathed,” with the
exception of some missing shingles, and concluded that adequate compensation
had been paid for all damage caused by wind. In a supplemental report, again
from November 2008, O’Keeda concluded that the ACV of the damage incurred
by the Bayles’ property totaled $108,220.00. Allstate’s earlier ACV estimate of
the house, as detailed in its NFIP Final Report and dated October 25, 2005, had
stated that the ACV of the house was $74,284.80.
In opposing Allstate’s motion for summary judgment, the Bayles’ only
submission was a report prepared by Steven Hitchcock, a claims adjuster who
estimated the total cost of repairing and replacing the house. He based his
conclusions on interviews with the Bayles and computer software used to
estimate insurance, restoration, and remodeling costs. After offering a line-item
listing of the materials and labor needed to restore the entire property,
irrespective of whether the cause of the damage was wind or flood, or a
combination of both, Hitchcock concluded that the total replacement cost value
(“RCV”) of the Bayles’ house was $182,863.13. He ventured no ACV.

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The district court granted Allstate’s motion for summary judgment,
dismissing the Bayles’ action. Relevant to this appeal,6 the court held that (1)
Louisiana law places the burden of segregating covered and non-covered losses
on the insured, (2) as the Bayles had failed to point to any wind damaged items
for which Allstate had not already compensated them, they were not entitled to
any additional compensation for structural damage from wind; (3) ACV, not
RCV, was the proper valuation standard for calculating the quantum of damages
in this particular claims process, so the Bayles were not entitled to statutory
penalties; and (4) the Bayles had adduced no competent evidence to support
their assertion that Allstate had mishandled their claims.7 The Bayles timely
filed their notice of appeal.
II. ANALYSIS
A. Applicable Law & Standard of Review
When, as here, jurisdiction is based on diversity, we apply the forum
state’s substantive law.8 The parties agree that Louisiana law applies.
We review a district court’s grant of summary judgment de novo.
Summary judgment should be granted only if there is no genuine issue of
material fact.9 A fact is material only if its resolution would affect the outcome

6
The district court also granted Allstate’s motion to exclude a supplemental expert
report by Hitchcock, which addressed the issue of “segregating” covered from non-covered
losses, finding it untimely and prejudicial to the defendant. The Bayles have waived this issue
on appeal, so we do not address it.
7
Bayle v. Allstate Insur. Co., No. 08-1319, 2008 WL 5054572, at *2 (E.D.La., Nov. 21,
2008).
8
Erie R.R. v. Tompkins, 304 U.S. 64 (1938).
9
Weeks Marine Inc. v. Fireman's Fund Ins. Co., 340 F.3d 233, 235 (5th Cir. 2003).

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of the action, and an issue is genuine only “if the evidence is sufficient for a
reasonable jury to return a verdict for the nonmoving party.”10 “If the burden at
trial rests on the non-movant, the movant must merely demonstrate an absence
of evidentiary support in the record for the non-movant’s case.” 11 Once a party
meets the initial burden of demonstrating that there exists no genuine issue of
material fact for trial, the burden shifts to the non-movant to produce evidence
of the existence of such an issue for trial.12 The non-movant must go beyond the
pleadings and present specific facts indicating a genuine issue for trial.13 On
appeal we may affirm a grant of summary judgment “on any legal ground raised
below, even if it was not the basis for the district court's decision.” 14
B. Burdens of Proof & Burdens of Production
The parties vociferously disagree whether it is the insurer or the insured
who must bear the burden of proving that the damage for which recovery is
sought was caused by an insured risk (wind) or by an non-insured or excluded
risk (flood) when, as here, both wind and flood contributed to the overall damage
incurred by the property.15 Neither party contends that any applicable provision

10
Hamilton v. Segue Software, Inc., 232 F.3d 473, 477 (5th Cir. 2000) (citing Anderson
v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)).
11
Miss. River Basic Alliance v. Westphal, 230 F.3d 170, 174 (5th Cir. 2000).
12
Celotex Corp. v. Catrett, 106 S. Ct. 2548, 2552 (1986).
13
Piazza's Seafood World, LLC v. Odom, 448 F.3d 744, 752 (5th Cir. 2006).
14
Performance Autoplex II Ltd. v. Mid-Continent Cas. Co., 322 F.3d 847, 853 (5th Cir.
2003) (citing In re Williams, 298 F.3d 458, 462 & n. 5 (5th Cir. 2002)).
15
The Bayles also assert in the alternative that federal law requires the insurer to
“segregate” or “allocate” damage. The Bayles point to federal law governing private insurers
who administer federal flood insurance policies, and contend that particular provisions require

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of the Allstate policy is ambiguous, and the Bayles do not seek—as have
insureds in other cases—additional benefits under a named peril policy or under
a policy that contains an anti-concurrent cause provision.16 And, unlike many
hurricane-damaged properties, the Bayles’ house was not reduced to its
foundations or to but a slab. As framed by the parties, the issue is simply
whether Allstate has the burden of proving that all uncompensated damage was
caused by flood and thus not covered by its policy’s wind provision,17 or whether,
instead, Allstate may be granted summary judgment merely by pointing out the
Bayles’ failure to proffer sufficient evidence to support their claim that wind,
rather than flood, caused their uncompensated (or under-compensated) damage.
The Bayles rely on language from our recent decision in Dickerson v.
Lexington Insurance Company18 in asserting that, because both sides agree that
some damage was caused by wind, the burden shifts to Allstate to put forward
evidence that the additional compensation sought for wind-caused damage in
fact relates to flood-caused damage. Allstate counters with two alternative

such private insurers to adjust both flood and wind claims simultaneously. The Bayles fail to
take into account that no federal “single adjuster” program was ever created. 34 C.F.R. §
63.23(i)(1). As the Bayles cite no authority to support the proposition that this federal program
was intended to displace state law governing the burdens of proof and production in breach
of insurance contract claims, we do not address this contention.
16
For our discussion and analysis parsing the relative evidentiary burdens in the
presence of those types of insurance contracts, see, e.g., Grilletta v. Lexington Ins. Co.
558 F.3d 359 (5th Cir, 2009); Broussard v. State Farm Fire and Cas. Co., 523 F.3d 618 (5th
Cir. 2008); Tuepker v. State Farm Fire & Casualty Co., 507 F.3d 346, 350-53 (5th Cir. 2007);
Leonard v. Nationwide Mut. Ins. Co., 499 F.3d 419, 423 (5th Cir. 2007).
17
This assumes, of course, that the insureds are or would be able to identify any
uncompensated damage.
18
556 F.3d 290, 294-95 (5th Cir. 2009).

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interpretations of Dickerson. It first contends that Dickerson did not change the
“burden-shifting” rule articulated by the Louisiana Supreme Court in Jones v.
Estate of Santiago, on which Dickerson expressly relied.19 Alternatively, Allstate
insists that our statement in Dickerson regarding the allocation of the burdens
of proof under Louisiana law was dictum.20 We consider these contentions in
turn.
1. Dickerson & Jones
When we apply state law, we “are bound to apply the law as interpreted
by the state’s highest court.”21 “If damage to immoveable property is covered, in
whole or in part, under the terms of the policy of the insurance, the burden is on

19
870 So.2d 1002, 1010 (La. 2004).
20
There does appear to be a lack of unanimity in the Eastern District of Louisiana
regarding the effect of Dickerson’s pronouncements. Some judges of that court appear to have
adopted the view that Dickerson’s discussion of the shifting burden of production under
Louisiana law was dictum; others have expressed or demonstrated confusion regarding the
rule it articulated. See, e.g., Adams v. Lexington Insur. Co., No. 06-11388, 2009 WL 362446,
at *3 (E.D. La. February 11, 2009) (holding that “[t]he Court agrees that the [pertinent]
language in Dickerson is dicta.”); Weiser v. Horace Mann Insur. Co., No. 06-9080, 2009 WL
5194970, at *4, n. 21 (E.D. La. April 6, 2009) (noting that “the Court expresses doubt that the
Fifth Circuit actually altered the state of the law” in Dickerson); Pontchartrain Gardens v.
State Farm Insur. Co.,No. 07-7965, 2009 WL 86671, at *11 (E.D.La January 13, 2009) (holding
that “State Farm’s motion mistakenly assumes that plaintiffs have the initial burden of
segregating their wind and water damage. But under Dickerson, plaintiffs must prove only
that the insured property sustained some wind damage.”); Lightell v. State Farm Fire and Cas.
Co., --- F.Supp.2d ---, 2009 WL 4505942, at *3 (E.D.La. 2009) (rejecting insurer’s argument
that “the Fifth Circuit’s interpretation of the burden shifting is simply dicta” and holding that
“the holding in Dickerson and that the analysis of the burden shifting test was not dicta,” and
mandated that “Plaintiffs’ burden at trial will be to prove that they are entitled to additional
payments to damage to their property. Plaintiffs do not have the burden of segregating the
damages based on covered and non-covered perils.”).
21
FDIC v. Abraham, 137 F.3d 264, 267-68 (5th Cir. 1998).

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the insurer to establish an exclusion under the terms of the policy.” 22 As we
explained in Dickerson, the Louisiana Supreme Court in Jones addressed the
respective proof burdens of the insurer and the insured, explaining that “the
insured bears [sic] the burden of proving a policy of insurance affords coverage
for an incident, [and] the insurer bears [sic] the burden of proving the
applicability of an exclusionary clause within a policy.” 23
The plaintiff in Jones sought to recover damages from the defendant’s
homeowners policy for the shooting death of the plaintiff’s wife. Because the
shooting had to be either intentional or accidental and could not be both, the
Louisiana Supreme Court was confronted with a straightforward issue of
coverage: Was the shooting in question a covered risk (accidental death), or was
coverage nullified by an exclusion? In Jones, the court ruled that the insurer’s
evidence in support of its motion for summary judgment “made a prima facie
showing that the motion [for summary judgment] should be granted. At that
point, the burden shifted to the plaintiff to present evidence demonstrating there
remained a material issue of fact as to the issue of whether the shooting was
accidental such that the exclusion did not apply.” 24
In Dickerson, we applied the rule articulated in Jones—a summary
judgment proceeding—to an appeal challenging the sufficiency of the evidence
to support a verdict for the insured rendered at the conclusion of a bench trial.
Like the Bayles, the insured in Dickerson filed suit against the provider of his

22
LA . STAT . ANN . REV . § 22:658(2)(B)(2007) redesignated § 22:1893(2)(B) by Acts 2008,
No. 415, §1, eff. Jan. 1, 2009.
23
Jones, 870 So.2d at 1010.
24
Id. at 1011-1012 (emphasis added).

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homeowners insurance, Lexington, alleging that it had breached the insurance
contract by failing to pay the full amount owed under the policy. Also like the
Bayles, the insured in Dickerson sought damages and statutory penalties for bad
faith under Louisiana law.25 And, like the Bayles’ policy with Allstate,
Dickerson’s policy with Lexington excluded coverage of damage from flood.
Unlike the district court in the instant case, however, the district court in
Dickerson adjudicated the claim after a bench trial, ruling in favor of Dickerson.
On appeal in Dickerson, Lexington specifically challenged the sufficiency
of the evidence offered to prove that the damage was caused by wind. Because
our review of the sufficiency of the trial evidence turns on the answer to the
question which party had the burden of proof at trial, we articulated the
respective burdens of production on the insurer and the insured under Louisiana
law, stating that:
[u]nder Louisiana law, the insured must prove that the claim
asserted is covered by his policy. Jones v. Estate of Santiago, 870
So.2d 1002, 1010 (La. 2004); Comeaux v. State Farm Fire & Cas.
Co., 986 So.2d 153, 157-58 (La. App. 5th Cir. 2008). Once he has
done this, the insurer has the burden of demonstrating that the
damage at issue is excluded from coverage. Jones v. Estate of
Santiago, 870 So.2d at 1010. Thus, once Dickerson proved his home
was damaged by wind, the burden shifted to Lexington to prove that
flooding caused the damage at issue, thereby excluding coverage
under the homeowners policy. As no one disputes that at least some
of the damage to the Dickerson home was covered by the
homeowners policy, Lexington had to prove how much of that
damage was caused by flooding and was thus excluded from
coverage under its policy.26

25
LA . REV . STAT . ANN . §§ 22:1220 and 22:658 (2007).
26
Dickerson, 556 F.3d at 295.

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We next reviewed the evidence adduced at trial by both Lexington and the
insured, observing that “the question of flood versus wind damage essentially
turned on witness credibility, as the quantity and quality of the evidence
adduced by each party was similar.” 27 We then affirmed the district court’s
judgment.
Even though in Dickerson we were not ruling on an appeal from a grant
of summary judgment—where, “[i]f the burden at trial rests on the non-movant,
the movant must merely demonstrate an absence of evidentiary support in the
record for the non-movant’s case”28 —the proper allocation of the burden of proof
necessarily implicated the standard of review of a challenge to the sufficiency of
the evidence.29 This is because “[t]he judge must view the evidence presented

27
Id. at 295.
28
Miss. River Basic Alliance v. Westphal, 230 F.3d 170, 174 (5th Cir. 2000). Celotex
Corp. v. Catrett, 477 U.S. 317, 32 (1986) “[T]he plain language of Rule 56(c) mandates the
entry of summary judgment, after adequate time for discovery and upon motion, against a
party who fails to make a showing sufficient to establish the existence of an element essential
to that party’s case, and on which that party will bear the burden of proof at trial . . . . The
moving party is ‘entitled to a judgment as a matter of law’ because the nonmoving party has
failed to make a sufficient showing on an essential element of her case with respect to which
she has the burden of proof.”).
29
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986) (holding that “we are
convinced that the inquiry involved in a ruling on a motion for summary judgment or for a
directed verdict necessarily implicates the substantive evidentiary standard of proof that
would apply at trial on the merits.”) (emphasis added); Allstate Ins. Co. v. Receivable Fin. Co.,
L.L.C., 501 F.3d 398, 405 (5th Cir. 2007) (“A motion for judgment as a matter of law
(previously, motion for directed verdict or J.N.O.V.) in an action tried by jury is a challenge
to the legal sufficiency of the evidence supporting the jury’s verdict.”); Hiltgen v. Sumrall, 47
F.3d 695, 703 (5th Cir. 1995) (“We must be especially careful when reviewing the sufficiency
of the evidence where the party seeking relief, the defendants in this case, had the burden of
proof on the issue in question.”).

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through the prism of the substantive evidentiary burden.”30 In sum—and
contrary to Allstate’s first contention regarding the import of Dickerson—our
articulation of the allocation of the burden of proof in Dickerson was not dictum,
although Allstate was correct that it did not alter the rule set forth in Jones.
Neither, however, does Dickerson stand for the proposition advanced by
the Bayles that the insurer alone must bear the burden of producing evidence
to segregate covered losses from excluded losses, at least not at the summary
judgment stage. Both the Bayles and Allstate appear to confuse the burden of
persuasion with the burden of production. As the Louisiana Supreme Court
made clear in Jones, and as our reasoning in Dickerson reflects, the insured
must carry the burden of persuasion to establish that any uncompensated (or
under-compensated) damage was caused by a covered peril. Simply put, this is
what is meant by the rule that the insured must prove coverage under the
policy.31 Then, if the defendant-insurer wishes to avoid liability by relying on a

30
Anderson, 477 U.S. at 252.
31
Doerr v. Mobil Oil Corp., 774 So. 2d 119, 123-24 (La. 2000) (“When determining
whether or not a policy affords coverage for an incident, it is the burden of the insured to prove
the incident falls within the policy’s terms. On the other hand, the insurer bears the burden
of proving the applicability of an exclusionary clause within a policy.”) (citations omitted); Lee
v. Taylor, 808 So.2d 407, 410 (La. App. 1st Cir. 2000) (“The insured bears the burden of proof
to establish every fact essential to a cause of action under the policy coverage.”); Whitham v.
Louisiana Farm Bureau Cas. Insur. Co., 34 So.3d 1104, 1107 (La. App. 2d Cir. 2010) (“In an
action under an insurance contract, the insured bears the burden of proving the existence of
policy and coverage. The insurer, however, bears the burden of showing policy limits or
exclusions” and therefore “[b]ecause La. Farm Bureau is relying on an exclusionary provision
in the policy it has the burden of showing . . . that the F-150 truck was ‘furnished for regular
use’ as required to satisfy the language of the exclusionary clause) (citations omitted)); Landry
v. Louisiana Citizens’ Property Insur. Co., 964 So.2d 463, 478 (La. App. 3d Cir. 2007)
(reviewing state law in the context of a challenge to indemnity for a total loss when both wind
and flood contributed to the loss and concluding “proof of coverage, together with a[s]howing
[sic] that wind damage was suffered during the course of a storm, creates a rebuttable

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policy exclusion from coverage, it has the burden of persuasion to establish that
the uncompensated or under-compensated damage is subject to an exclusion.
Contrary to Allstate’s second contention, we have found nothing in Louisiana
law to suggest that these respective burdens of persuasion shift between the
parties. What does shift—but only during the summary judgment stage—is the
burden of production. Because at trial the defendant-insurer has the ultimate
burden of persuasion that the exclusion is applicable, a defendant-insurer that
moves for summary judgment must bear the burden of producing evidence to
make out a “prima facie” case that the cause of the uncompensated or under-
compensated damage was excluded from coverage. If the defendant-insurer does
so, “the burden shift[s] to the [insured] to present evidence demonstrating there
remain[s] a material issue of fact.” 32
As Jones makes clear, this simple, burden-shifting minuet arises from the
effect of summary judgment on the burdens of production and not any shift

presumption of causality.”), aff’d in part, vacated in part on other grounds by Landry v.
Louisiana Citizens’ Property Insur. Co. 983 So.2d 66 (La. 2008); Stewart v. Louisiana Farm
Bureau Mut. Insur. Co., 420 So.2d 1217, 1219 (La. App. 3d 1982) (“the insurer has the burden
of proving facts which limit its coverage”) (citing Mass. Protective Assoc v. Ferguson, 168 La.
271, 121 So. 863 (1929)); Comeaux v. State Farm Insur. Co., 986 So.2d 153, 154 (La. App. 5th
Cir. 2008) (“although the insurer has the burden to show an exclusion applies, we find that
State Farm here is not relying on an exclusion to avoid paying the claim . . . . [because] State
Farm acknowledges that ALE was due pursuant to the homeowners policy and paid
accordingly. The issue here is whether the payment was sufficient to meet State Farm's
obligation.”).
32
Whitham, 34 So. 2d. at 1011-1012. COUCH ON INSURANCE § 175:9 (3rd ed. 2006) (“It
is an insured’s burden to produce evidence that would afford a reasonable basis for estimating
the amount of damage or the proportionate part of damage caused by the covered peril and
that by the excluded peril.”).

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between the parties’ respective burdens of persuasion.33 Because Dickerson
addressed the sufficiency of the evidence adduced at trial, it was not concerned
with the shifting of the burdens of production that characterizes summary
judgment.
2. Burdens of Production at Summary Judgment
Here, because Allstate moved for summary judgment, and because Allstate
would have had the burden of proving at trial that flood, not wind, caused the
uncompensated or under-compensated damage claimed by the Bayles, Allstate
had the burden of producing evidence in support of its motion to establish that
there existed no issue of material fact regarding the cause of the uncompensated
or under-compensated damage for which the Bayles sought indemnification.
Unlike the insurer-defendant in Jones, however, Allstate did not contest that a
covered peril (wind) caused some of the damage to some of the Bayles’ property;
the question was which particular items of property were damaged by wind; or,
put differently, what is the extent of the damage incurred by those items that

33
Before undertaking its analysis, the Jones court explained that recent revisions to
Louisiana’s Code of Civil Procedure clarified the burden of proof in summary judgment
proceedings such that “[t]he initial burden of proof remains with the mover to show that no
genuine issue of material fact exists. If the mover has made a prima facie showing that the
motion should be granted, the burden shifts to the non-moving party to present evidence
demonstrating that a material factual issue remains. The failure of the non-moving party to
produce evidence of a material factual dispute mandates the granting of the motion.” Jones,
870 So. 2d at 1006, & n.5 (emphasis added). It is in this context that we read Jones’s later
statement that “we conclude that defendant made a prima facie showing that the motion
should be granted. At that point, the burden shifted to the plaintiff to present evidence
demonstrating there remained a material issue of fact as to the issue of *1011 whether the
shooting was accidental such that the **14 exclusion did not apply.” Id. at 1010. Compare
Celotrex Corp. v. Catrett, 4778 U.S. 317, 331 (1986) (“The burden of production imposed by
Rule 56 requires the moving party to make a prima facie showing that it is entitled to
summary judgment . . . . The manner in which this showing can be made depends upon which
party will bear the burden of persuasion on the challenged claim at trial.”).

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No. 09-30161

was caused by wind. Complicating Allstate’s task, however, was the fact that at
no point did the Bayles identify which particular damaged items had gone
uncompensated or under-compensated under their homeowners policy’s coverage
for structural damage.34 They simply presented the court with a line-item cost
estimate to repair all the damage to their property, without even attempting to
explain which portion or portions of those costs are attributable to wind-caused
damage.
In contrast, to support its motion for summary judgment Allstate proffered
(1) the Bayles’ deposition testimony, (2) its own adjusters’ reports, and (3) the
expert testimony of O’Keeda, which together specifically itemized and quantified
the damage caused by wind as opposed to flood. The totality of this evidence
demonstrates that the Bayles’ one-story house took in eight to ten feet of water,
that the roof and windows were left essentially intact, that oil from a nearby
tank also contaminated the property, and that the amounts paid by Allstate
under the policy’s wind coverage—$3,628.87 for structural damage, $8,804.22 for
contents, and $5,127.64 for ALE—were sufficient.
On appeal, the Bayles urge us (1) to find that the disparity between the
gross amount of their estimate and the amount that they received from Allstate
under their policy’s wind coverage proves that some “uncompensated damage”
does remain “uncompensated,” and (2) to rule that Allstate cannot be granted
summary judgment unless it produces evidence that “segregates damages”

34
Although the Bayles also complained about the amount they received for contents
damage under their homeowners policy’s coverage, they have not briefed this issue on appeal
so we deem it waived.

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No. 09-30161

caused by wind from those caused by flood.35 In so contending, however, the
Bayles fail to recognize that when Allstate adduced evidence sufficient to
establish a prima facie case that flood, not wind, caused any uncompensated or
under-compensated damage complained of by the Bayles, the burden of
production shifted to the Bayles to offer rebuttal evidence sufficient to create a
genuine issue of material fact as to which, if any, uncompensated items of
damage were caused by wind.36 Unlike the plaintiff in Dickerson, the Bayles’
expert report did not venture the causes of the damage to any particular items.
The Bayles also failed to proffer any evidence to show that they were under-
compensated for any damage admittedly caused by wind. Consequently,
summary judgment was proper because the Bayles did not bear their burden of
production after Allstate had produced evidence identifying those items of
damage that were excluded from wind coverage because they were caused by
flood.

35
We note here that the Bayles appear to conflate the notion of damage with damages;
the latter in fact being the dollar amount of the former, and we could find no suggestion in
Louisiana law that insureds are ever relieved of the burden of proving damages. Mobil
Exploration & Producing U.S., Inc., v. Cajun Constr. Servs., 45 F.3d 96, 101 (5th Cir. 1995)
(holding that “‘[u]nder Louisiana law, the plaintiff must prove damages with reasonable
certainty. . . .”).
36
We note here that if the insureds have already recovered a sufficient amount under
their flood policy for some damage allegedly caused by wind, the insureds may not recover
twice by claiming the damage under its homeowners policy for wind damage. Although this
rule appears to create perverse incentives when the flood insurer is the federal government
and the wind-damage insurer is the private insurance company that also administers the
federal flood policy, Louisiana law nevertheless bars insureds from recovering twice for the
same damage. Cole v. Celotex, 599 So.2d 1058, 1080 (La. 1992). Indeed, if there ever be a case
in which there appears to be any self-dealing by a two-hatted insurer under such
circumstances, it would be the federal government and not the insureds that would have the
putative reimbursement claim.

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No. 09-30161

C. Valuation & the Sufficiency of the Amount Recovered for
Structural Damages

1. Valuation — ACV or “building structure reimbursement?”
The Bayles also challenge the sufficiency of the payment they received for
structural damage, claiming that their damages should have been calculated
under the policy’s “building structure reimbursement” provision. Allstate (and
the district court) rejected the proposition that any of the Bayles’ structural
damage should be calculated under the “building structure reimbursement”
provision, maintaining that the Bayles were limited to the ACV of the property.
The Bayles’ homeowners policy explicitly identifies when the policyholder
may recover under the “building structure reimbursement” clause as opposed to
recovering under the “actual cash value” clause:
(a) Actual Cash Value: If you do not repair or replace the damaged
. . . property, payment will be on an actual cash value basis. This
means that there may be a deduction for depreciation. . . .

You may make claim for additional payment [for building structure
reimbursement], if you repair or replace the damaged, destroyed or
stolen property within 180 days of the actual cash value payment.

(b) Building Structure Reimbursement: . . . [W]e will make
additional payment to reimburse you for cost in excess of actual
cash value if you repair, rebuild or replace damaged . . . covered
property within 180 days of the actual cash value payment. . . .

If you replace the damaged building structure(s) at an address other
than shown on the Policy Declarations through construction of a
new structure or purchase of an existing structure, such replacement
will not increase the amount payable under Building Structure
Reimbursement described above . . . .

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No. 09-30161

(Emphasis added)
It is undisputed that the Bayles neither repaired their damaged property
nor replaced it on the same lot. And, although they did purchase a
condominium, it was at a different location. Moreover, for the Bayles to recover
under the “building structure reimbursement” clause, the condominium must
have been purchased within 180 days of Allstate’s last actual cash value
payment to the Bayles.37 None contests that the condominium was not
purchased within 180 days of Allstate’s last actual cash value payment to the
Bayles.38 “‘Louisiana law . . . places the burden on the [insured] to establish
every fact essential to recovery and to establish that the claim falls within the
policy coverage,’”39 and the Bayles failed to adduce any evidence that their
condominium was purchased within the requisite 180-day period. They have
thus failed to demonstrate that there is a genuine issue of material fact
concerning whether the “building structure reimbursement clause” applies. The

37
In the district court, the Bayles asserted that Allstate waived the ACV terms of the
policy when it paid $3,628.87 in “replacement cost” for wind damage. As this contention was
rejected by the district court in its opinion granting summary judgment, however, and the
Bayles have not raised it again on appeal, we shall not address it.
38
Allstate also advances several alternative arguments why the condominium does not
qualify as replacement property. As Allstate’s primary argument is sufficient, however, we
need not address its alternative arguments.
39
Williams v. Allstate Indemnity Co., 359 Fed. App’x. 471, 473 (5th Cir. 2009)
(unpublished) (citing Ho v. State Farm Mut. Auto Ins. Co., 862 So.2d 1278, 1281 (La .App. 3rd
Cir. 2003) and Doerr v. Mobil Oil Corp., 774 So.2d 119, 124 (La.2000) (“When determining
whether or not a policy affords coverage for an incident, it is the burden of the insured to prove
the incident falls within the policy's terms. On the other hand, the insurer bears the burden
of proving the applicability of an exclusionary clause within a policy.” (citations omitted)),
modified on other grounds, 782 So.2d 573 (La.2001).

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No. 09-30161

district court did not err in concluding that the Bayles are not entitled to any
payments for structural damage in excess of the ACV of their house.
2. The Sufficiency of the ACV Reimbursement
The parties also disagree about the correct ACV of the house and about
whether the payments that the Bayles have already received have fully
indemnified them for damage caused by wind. As noted, the Bayles did not offer
their own calculation of ACV; rather, through their expert report, they offered
only the total RCV of the house. Allstate, for its part, proffered evidence of two
ACV sums: (1) In an early report submitted to the NFIP, a copy of which was
included in Allstate’s summary judgment evidence, the ACV of the home was
listed as $74,284.80; (2) in its summary judgment briefs, Allstate advanced
another ACV sum, which was calculated by its expert, O’Keeda, to be $108,220.
The mere existence of these two competing figures, argue the Bayles, signals
that there exists a genuine issue of material fact which precludes summary
judgment. Allstate counters that, when the Bayles’ recoveries for both flood and
wind are combined with their recovery from the sale of their property to Murphy
Oil, the Bayles recovered $132,628.87 in structural damages to their property,
which exceeds both figures that Allstate produced in connection with its motion
for summary judgment.
Without ruling on the import, if any, of Allstate’s dueling figures, or on its
claim that the Bayles’ ACV should take into account all or some portion of its
recovery from Murphy Oil,40 we hold that this issue is immaterial in the light of

40
Louisiana has made it clear that the insureds may “recover under all available
coverages provided that there is no double recovery.” The payment obtained from Murphy Oil,
however, was not an indemnification pursuant to an insurance contract. Cole v. Celotex, 599
So.2d 1058, 1080 (La.1992) (quoting 15A Couch on Insurance § 56:34 (2d ed.1983)). This

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No. 09-30161

our overarching determination regarding the shifting evidentiary burdens of the
parties. As we explained earlier, Allstate put forward sufficient evidence in
support of its motion for summary judgment to establish that all wind-caused
structural damage to the Bayles’ house was fully compensated. Not only did the
Bayles fail to counter with any rebuttal evidence to establish the existence of as-
yet uncompensated damage caused by wind, the Bayles also failed to proffer any
evidence that the quantum of damages they had already received from Allstate
for wind-caused damage was insufficient. The Bayles have cited no authority,
and we have found none, to support the proposition that the shifting evidentiary
burden of production in these insurance suits somehow absolves the insureds
from the traditional rule “[u]nder Louisiana law, [that] the plaintiff must prove
damages with reasonable certainty . . . .”41 Accordingly, the district court,
correctly ruled that the Bayles were not entitled to additional payments for wind
damage under their homeowners policy.
D. Statutory Penalties under La. R.S. §§ 22:1220 and 22:658

double recovery prohibition only extends to “all available coverages—an insurer may not
benefit from offsets for payments received by the insured from the United States Small
Business Association (SBA) or Road Home Program.” Bradley, 606 F.3d at 229, n. 10.
Although the record does not reflect the details of the Bayles’ sale to Murphy Oil, it
presumably resulted from an attempt to settle any potential tort claims that residents affected
by the oil that leaked from the ruptured storage tanker might bring. We do not read Louisiana
law to instruct that any such third-party “windfall” (if environmental contamination may be
so characterized) should redound to Allstate’s benefit as opposed to the benefit of the insured.

41
Mobil Exploration & Producing U.S., Inc., v. Cajun Constr. Servs., 45 F.3d 96, 101
(5th Cir. 1995); COUCH ON INSURANCE § 175:9 (3rd ed. 2006) (“It is an insured's burden to
produce evidence that would afford a reasonable basis for estimating the amount of damage
or the proportionate part of damage caused by the covered peril and that by the excluded
peril.").

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No. 09-30161

Breach of contract is a condition precedent to recovery for the breach of
the duty of good faith,42 and we agree with the district court that Allstate did not
breach its insurance contract with the Bayles. Therefore, the district court
properly denied the Bayles’ claim for statutory penalties.
III. CONCLUSION
As the movant for summary judgment, Allstate had the burden of proving
the applicability of any exclusion from coverage. Allstate properly supported its
motion for summary judgment with specific evidence (its adjusters’ and expert’s
reports, and the Bayles’ deposition testimony) that addressed the various items
of damage incurred by the Bayles’ property and the cause of each item’s
damage, as well as the particular amounts it paid to the Bayles for wind-damage
to those items. At that juncture, the burden of production shifted to the Bayles
to put forward evidence of specific facts sufficient to demonstrate the existence
of uncompensated items of damage that were caused by wind, or of any
deficiency in its quantum of the damages paid by Allstate to indemnify the
Bayles for wind-caused damage. They failed to do so. As all other issues on
appeal are subsidiary to these determinations, the district court’s grant of
Allstate’s motion for summary judgment must be, and hereby is,
AFFIRMED.

42
Clausen v. Fidelity and Deposit Co. of Maryland, 660 So.2d 83, 85-86 (La. App. 1st
Cir. 1995).

22