The insured moved for summary judgment on bad faith because of the insurer's alleged delayed and incomplete payments after Hurricane Katrina destroyed property.  See Plaquemines Parish School Bd v. Indus. Risk Insurers, No. 06-7213, 2009 U.S. Dist. LEXIS 20004 (E.D. La. March 11, 2009). 

    School buildings operated by the insured School Board were damages by Hurricane Katrina in August 2005.  Policy limits were $15 million, and the School Board was paid $11.7 million.  The School Board filed suit against the insurer for additional proceeds under an "all risk" policy.  The suit sought the remainder of the policy limits and damages for bad faith.

    The insurer's adjusters had inspected the properties in September and October 2005, and provided detailed reports regarding the damage.  Substantial payments were made.  Nevertheless, the School Board argued the insurer failed to make timely payments once it had a sufficient proof of loss.  The School Board further argued payments for wind damage were insufficient and untimely. 

    Noting the Fifth Circuit's decision in Dickerson v. Lexington Ins. Co., 2009 U.S. App. LEXIS 2902 (5th Cir. 2009) [reviewed here], the District Court noted whether the insurer acted in good faith required a factual determination.  The School Board's evidence raised questions of material fact as to the timing and sufficiency of proof of loss in the insurer's possession and whether the insurer acted in good faith in delaying payment.  Therefore, the School Board's motion for summary judgment was denied.

    The court also considered whether the School Board's recovery from the insurer should be offset by amounts received from FEMA or in flood insurance proceeds to prevent a double recovery.  By statute, duplicate funding received from FEMA had to be returned.  The court held, however, that the School Board's receipt of FEMA funds had no bearing on the ability to recover from the insurer.  Nevertheless, the insurer would be entitled to an offset for any flood proceeds received by the School Board which the insurer proved was excluded from coverage.  At trail, the School Board would have the burden of proving the amount of damage caused by the covered peril of wind while the insurer would have the burden of proving the applicability of the exclusion for flood damage.