Charles Smith, et al. v. Clear Blue Insurance Company

CourtDistrict Court, W.D. Louisiana
DecidedMarch 17, 2026
Docket2:25-cv-00123
StatusUnknown

This text of Charles Smith, et al. v. Clear Blue Insurance Company (Charles Smith, et al. v. Clear Blue Insurance Company) is published on Counsel Stack Legal Research, covering District Court, W.D. Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Charles Smith, et al. v. Clear Blue Insurance Company, (W.D. La. 2026).

Opinion

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF LOUISIANA LAKE CHARLES DIVISION

CHARLES SMITH, ET AL. CIVIL ACTION NO. 25-0123

VERSUS JUDGE ALEXANDER C. VAN HOOK CLEAR BLUE INSURANCE COMPANY MAGISTRATE JUDGE LEBLANC

MEMORANDUM RULING

Charles Smith obtained a state court judgment following a traffic accident with Stanley Ceasar, Jr., and the underinsured motorist carrier for Smith’s employer paid a portion of that judgment. In this case, Smith filed a bad faith action purportedly on Ceasar’s behalf against Ceasar’s liability insurer, Clear Blue Insurance Company (“Clear Blue”), for failing to timely settle within the policy limits and exposing Ceasar to an excess judgment. Clear Blue answered and asserted that it’s entitled to a credit for the payment that Smith’s underinsured motorist carrier made, which satisfied part of the state court judgment. Now, Smith has filed a motion for partial summary judgment to prohibit Clear Blue from receiving that credit if his bad faith action is successful. For the reasons below, the motion is denied. Background In November 2018, Charles Smith and Stanley Ceasar, Jr. had a violent truck collision. See Record Document 31-5 at 2. Ceasar, driving a dump truck, made an abrupt turn across Smith’s traffic lane, causing Smith to crash into the driver’s side of Ceasar’s truck. Id. At the time of the collision, Smith had been driving a tanker truck for his employer, Wastewater Specialties, Inc. (“Wastewater”). Id. Smith suffered substantial injuries from the collision, including brain, neck, back, and shoulder damage, requiring multiple surgeries. Smith v. Ceasar, No. 23-689 (La. App.

3 Cir. 6/26/24), 389 So. 3d 1037, 1047-48. After the collision, Smith and his wife, Jodenise Smith, filed a petition for damages in state court against Ceasar. Record Document 31-5 at 1. The petition also named two insurers: Clear Blue and National Union Fire Insurance Company (“National Union”). Id. Clear Blue issued an automotive liability policy to Ceasar with liability limits of $500,000. Record Document 31-5 at 1. National Union issued an insurance policy to Wastewater, and Smith alleged that this policy included

underinsured motorist coverage. Id. After a motion for summary judgment, Smith dismissed his claim against National Union. Record Document 31-8 at 1. Eventually, Smith amended his original petition to add another insurer, Indian Harbor Insurance Company (“Indian Harbor”). Record Document 31-6 at 1. Indian Harbor issued a commercial excess policy to Wastewater with liability limits of $10,000,000. Record Document 26-4 at 11. This policy included an underinsured

motorist provision. Smith, 389 So. 3d at 1059 (holding Indian Harbor’s underinsured motorist rejection form was invalid). Trial occurred in October 2022, and a jury found Ceasar was 100% at fault for the collision and awarded total damages of $5,107,609.23. Record Document 1-2 at 2. The trial court entered a final judgment, apportioning damages between Clear Blue, Ceasar, and Indian Harbor. Id. The final judgment allocated $468,426 against Clear Blue, which exhausted its policy limits. Id.; Record Document 31-2 at 2 (explaining that a prior property damage claim had reduced the available limit). The final judgment also assigned $1,000,000 against Ceasar individually and $3,552,113.91

against Ceasar and Indian Harbor solidarily. Record Document 1-2 at 2. After the final judgment, Clear Blue paid Smith $708,995.47. Record Document 31-2 at 2. This payment satisfied the $468,426 judgment against Clear Blue and included legal interests and costs. Id. On April 5, 2024, Ceasar and Smith purportedly executed a Compromise Agreement. Record Document 32-1 at 7. In the Compromise Agreement, Ceasar assigned Smith the right to bring a bad faith action against Ceasar’s insurer, Clear

Blue. Id. at 3. In exchange, Smith agreed to not pursue Ceasar’s assets for satisfaction of the final judgment. Id. The Compromise Agreement also included the following language: [Ceasar] acknowledges that this Agreement is not a settlement, release, or anything other than a conditional agreement related to financial responsibility and a covenant not to execute the judgment against [Ceasar] except as necessary to secure any proceeds recovered through prosecution of the bad faith action. Id. at 5.

On December 13, 2024, Smith filed the current action against Clear Blue for violating Louisiana Revised Statute 22:1892. Record Document 1-1 at 5. According to Smith, Clear Blue acted in bad faith when Clear Blue did not make a timely offer to settle the tort lawsuit for its policy limits. Id. In the petition, Smith alleged that Ceasar had assigned Smith the right to bring the bad faith cause of action. Id. As damages, Smith sought statutory penalties, attorney’s fees, and liability for the excess judgment. Id. Meanwhile, on January 10, 2025, Smith and Indian Harbor executed a Receipt

and Release. Record Document 31-13 at 1. In the Receipt and Release, Indian Harbor agreed to pay Smith $4,000,000 “in full and final settlement of all claims against [Indian Harbor].” Id. Furthermore, a recital of the Receipt and Release stated that their agreement “releases and terminates all rights, obligations and liabilities of [Indian Harbor].” The Receipt and Release also contained two provisions related to the construction of their agreement, stating that it should not “be construed as a waiver,

modification or retraction of the positions of the parties relative to the interpretation and application of any insurance policy issued by [Indian Harbor].” Id. at 2. In addition, Indian Harbor and Smith agreed that “[t]his agreement does not reflect upon the parties’ views as to rights and obligations with respect to matters or persons outside the scope of the Agreement.” Id. After the Receipt and Release, Indian Harbor issued a $4,000,000 payment to

Smith. Record Document 31-14 at 2. Smith then filed an acknowledgment of satisfaction of judgment in state court. Record Document 31-4 at 1. In the acknowledgment, Smith explained that Indian Harbor had sought appellate review of the final judgment, and in lieu of continued litigation, the parties agreed to $4,000,000 “in full satisfaction of the trial court’s judgment against Indian Harbor.” Id. Eventually, Clear Blue removed Smith’s petition to this court and filed its answer. Record Documents 1 and 15. In the answer, Clear Blue asserted as an affirmative defense that Clear Blue is entitled to a credit or offset for any payments

Smith had received from an underinsured motorist carrier, including Indian Harbor. Record Document 15 at 13-14. Smith has now filed a motion for partial summary judgment to prohibit Clear Blue from receiving a credit or offset if his bad faith claim succeeds. Record Document 16. Standard Federal Rule of Civil Procedure 56(a) requires a court to “grant summary judgment if the movant shows that there is no genuine dispute as to any material

fact and the movant is entitled to judgment as a matter of law.” When the burden at trial will rest on the nonmovant, the movant need not produce evidence to negate the elements of the nonmovant’s case; rather, it need only point out the absence of supporting evidence. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). If the movant satisfies its initial burden, the nonmovant must demonstrate a genuine dispute exists by “going beyond the pleadings” and “designating specific facts.” Little v. Liquid Air

Corp., 37 F.3d 1069, 1075 (5th Cir. 1994).

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