Hays v. State Farm Mutual Automobile Insurance (In Re Hannover Corp. of America)

BENAVIDES, Circuit Judge:

The central issue of this appeal is whether an insurance company’s refusal to pay a claim on a stolen automobile was unreasonable entitling the claimant to statutory penalties and attorneys’ fees under Louisiana law. Concluding that the bankruptcy court clearly erred in finding that the insurance company was reasonable in its refusal to pay the claim, we reverse and remand for further proceedings.

FACTUAL AND PROCEDURAL BACKGROUND

Appellant William G. Hays, Jr. (“the Receiver”), is the Receiver for Debtor-in-Possession, Redwood Raevine Corporation (“Redwood”), which is…