Unreported / Non-Citable
Background
A June 2024 fire damaged E&T Grill and Restaurant, LLC, whose sole member and manager was Raveon Ward. State Farm insured E&T Grill, but neither Ward nor anyone else was listed as a named or additional insured. After inspecting the premises and reviewing the business’s financial records, State Farm paid E&T Grill $892.67 for property damage, $3,152.29 for lost income, and an additional $2,213.22.
Ward sued State Farm “on behalf of” E&T Grill, seeking $70,000 for her personal lost income and alleging that State Farm arbitrarily and capriciously refused to pay covered losses. She did not oppose State Farm’s three summary-judgment motions. The district court granted the motions, concluding that Ward lacked capacity to sue for the LLC, Ward was not insured under the policy, the revoked LLC could not sue on its own behalf, and the evidence did not support a bad-faith claim.
The Court’s Holding
The Fifth Circuit affirmed. Because Ward did not oppose summary judgment in the district court, she waived the legal arguments she raised for the first time on appeal. The court nevertheless independently reviewed whether State Farm had established the absence of a genuine dispute of material fact and held that it had.
Under Louisiana law, an LLC member cannot personally sue for damage to LLC property, so Ward lacked capacity to pursue E&T Grill’s claims. Even assuming the business could pursue them, the policy covered E&T Grill’s lost income—not Ward’s personal income—and no evidence showed that State Farm’s payments to the business were inadequate. Ward’s bad-faith claims also failed under either Arkansas or Louisiana law because she was not an insured and offered no evidence that State Farm acted dishonestly, maliciously, oppressively, arbitrarily, or without probable cause.
Key Takeaways
- An LLC member cannot personally recover for damage sustained by the LLC merely because the member owns or manages the company.
- Failing to present a legal argument against summary judgment in the district court generally waives that argument on appeal.
- An unopposed summary-judgment motion is not automatically granted; the movant must still show that no genuine dispute of material fact exists and that it is entitled to judgment as a matter of law.
- Bad-faith claims require evidence beyond dissatisfaction with an insurer’s payment, particularly when the claimant is not the policy’s named insured.
Why It Matters
The decision underscores the legal separation between an LLC and its members in insurance litigation. A business owner generally cannot substitute personal losses or records for proof of the insured company’s covered losses.
It also illustrates the consequences of leaving summary-judgment motions unopposed: although the court must still evaluate the movant’s evidence, arguments and supporting proof withheld from the district court ordinarily cannot be introduced for the first time on appeal.