Deprive Insurer of the Ability to Properly and Timely Investigate Claim & Recover Nothing
Posted on July 2, 2026 by Barry Zalma
Post number 5385
No Contract Claim No Bad Faith Claim
In South Alexander Development I, LLC v.Markel American Insurance Co., Civil Action No. 23-1436-JWD-SDJ, United States District Court, M.D. Louisiana (June 24, 2026) South Alexander Development I, LLC (SADI) owned and operated a solar farm in Springfield, Louisiana that allegedly sustained significant Hurricane Ida damage.
After SADI submitted a claim, MAIC ultimately paid $1,099,614.02 for undisputed physical damage plus the $210,000 income-loss policy limit. SADI later sued for breach of contract and statutory bad faith, contending MAIC failed to fully investigate and adjust the claim; MAIC sought summary judgment, arguing SADI failed to cooperate and withheld material repair-cost information.
LAW:
Louisiana insurance policies are interpreted as contracts according to their plain meaning, and the insured bears the burden of proving coverage.
A material, prejudicial breach of a cooperation clause may preclude suit under the policy.
DISCUSSION:
The court found the provision ambiguous because both parties offered reasonable competing interpretations. SADI argued it imposed investigative duties on MAIC.
ANALYSIS:
The court found MAIC diligently sought the information, that the withheld materials were material to adjusting the claim, and that MAIC was prejudiced.
SADI had not satisfied its summary judgment burden for the breach of contractual obligation claim.
CONCLUSION:
The court denied SADI’s motion for partial summary judgment and granted MAIC’s motion for summary judgment. It held that SADI materially and prejudicially breached its cooperation and proof-of-loss obligations.
Because SADI had no viable contractual claim, its Louisiana bad-faith claims also failed. The court dismissed all claims by SADI against MAIC with prejudice.
ZALMA OPINION
Property insurance is designed to indemnify an insured for physical loss or damage to real or personal property. SADI was lucky it was paid $1,099,614.02 for undisputed physical damage plus the $210,000 income-loss policy limit because those amounts were proved immediately. It wanted more money but either failed or refused to provide the information to MAIC, the insurer, and by so doing failed to fulfill a condition precedent to coverage and its suits was appropriately dismissed. People insured are obligated to prove the loss to the insurer. SADI failed to do so and that defeated its claim.
(c) 2026 Barry Zalma & ClaimSchool, Inc.
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Deprive Insurer of the Ability to Properly and Timely Investigate Claim & Recover Nothing
Posted on July 2, 2026 by Barry Zalma
Post number 5385
No Contract Claim No Bad Faith Claim
In South Alexander Development I, LLC v.Markel American Insurance Co., Civil Action No. 23-1436-JWD-SDJ, United States District Court, M.D. Louisiana (June 24, 2026) South Alexander Development I, LLC (SADI) owned and operated a solar farm in Springfield, Louisiana that allegedly sustained significant Hurricane Ida damage.
After SADI submitted a claim, MAIC ultimately paid $1,099,614.02 for undisputed physical damage plus the $210,000 income-loss policy limit. SADI later sued for breach of contract and statutory bad faith, contending MAIC failed to fully investigate and adjust the claim; MAIC sought summary judgment, arguing SADI failed to cooperate and withheld material repair-cost information.
LAW:
Louisiana insurance policies are interpreted as contracts according to their plain meaning, and the insured bears the burden ...
Happy 250th Anniversary America
THE SOURCE FOR THE INSURANCE FRAUD PROFESSIONAL
Post number 5384
ZIFL – Volume 30 Issue 13 July 1, 2026
Zalma’s Insurance Fraud Letter (ZIFL) continues its 30th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year by ClaimSchool and is written by Barry Zalma. It is provided FREE to anyone who visits the site at http://zalma.com/zalmas-insurance-fraud-letter-2/ This issue contains the following articles about insurance fraud:
A Very Expensive, Supposedly Successful, Fraud
Arbitration Concluded Multimillionaire was Defrauded by Key Employee Who Initiated the Arbitration
Fahad Ghaffar was found to have breached his fiduciary duty by advising John Paulson against making an investment in a payments company, then turned a $35.7 million profit by buying the shares himself, the arbitrator, Carolyn Demarest, said. She also found that Ghaffar hid his interest in a software company in which he “fraudulently induced” Paulson to make a $12.2 million investment.
...
Happy 250th Anniversary America
THE SOURCE FOR THE INSURANCE FRAUD PROFESSIONAL
Post number 5384
ZIFL – Volume 30 Issue 13 July 1, 2026
Zalma’s Insurance Fraud Letter (ZIFL) continues its 30th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year by ClaimSchool and is written by Barry Zalma. It is provided FREE to anyone who visits the site at http://zalma.com/zalmas-insurance-fraud-letter-2/ This issue contains the following articles about insurance fraud:
A Very Expensive, Supposedly Successful, Fraud
Arbitration Concluded Multimillionaire was Defrauded by Key Employee Who Initiated the Arbitration
Fahad Ghaffar was found to have breached his fiduciary duty by advising John Paulson against making an investment in a payments company, then turned a $35.7 million profit by buying the shares himself, the arbitrator, Carolyn Demarest, said. She also found that Ghaffar hid his interest in a software company in which he “fraudulently induced” Paulson to make a $12.2 million investment.
...
