Whitney National Bank of New Orleans v. State Farm Fire and Casualty Co.
United States District Court for the Eastern District of Louisiana
518 F. Supp. 359 (1981)
- Written by Sheryl McGrath, JD
Facts
State Farm Fire and Casualty Co. (State Farm) (defendant) provided an insurance contract to a business called Foreign Car Parts, Inc. (the business). The insurance contract covered the business’s buildings and also covered the business’s inventory and other moveable property (i.e., chattel). Included in the business contract was a standard mortgage clause applicable to the business buildings only. Whitney National Bank of New Orleans (Whitney) (plaintiff) held a $1,000,000 mortgage on the business’s chattel. While the insurance contract was in effect, the business president engaged in arson that caused damage to the business property. The value of the damaged chattel was about $230,000. Whitney submitted an insurance claim to State Farm. The insurance contract excluded coverage for damage caused by the insured’s arson. State Farm denied the claim according to the arson exclusion. Whitney sued State Farm for the proceeds of the insurance coverage for the business chattel.
Rule of Law
Issue
Holding and Reasoning (Schwartz, J.)
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