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The case of Versai Mgmt. Corp. v. Clarendon Am. Ins. Co., No. 08-30874 was an action against an insurer brought after a number of apartment buildings managed by plaintiff sustained damage during Hurricane Katrina in 2005. The case involved contract claims for unpaid insurance proceeds as well as claims that defendants violated Louisiana law by failing to promptly settle claims and by misrepresenting the terms of their policies. The district court granted summary judgment to defendants.
However, as the Fifth Circuit wrote: "Versai [plaintiff] argues that the district court was not at liberty to grant summary judgment based on its 'failure' to support its August 23 proofs of loss with additional documentation where the insurance policy created no such obligation. We agree."
The court of appeals affirmed in part because, under the policy at issue, plaintiff was not entitled to costs of compliance until after it had incurred the expenses of code compliance. However, the court reversed in part, on the grounds that: 1) the district court was not at liberty to grant summary judgment based on plaintiff's "failure" to support its proofs of loss with additional documentation where the insurance policy created no such obligation; and 2) there was an issue of material fact suggesting that plaintiff was entitled to compensation for business-interruption losses.