Arabic Store Owner Wins Insurance Dispute
We’ve blogged about the importance of using certified translators to translate contracts and insurance policies as good business practice. In the case below, a misunderstanding about the terms of an insurance policy ensued when an Arabic translator was not used to translate an insurance policy to a retail store owner.
Arabic Store Owner Signs Insurance Policy Without Interpreter.
In Upscale Fashions, Inc. v. Underwriters at Lloyd’s London, et al., the plaintiff was a retail clothing company located in New Orleans. The owner of the plaintiff company spoke Arabic and could not read or speak English. The owner’s son served as the company’s treasurer and vice-president.
In 2004, the plaintiff purchased a property insurance policy which involved Lloyds, an insurance network, and the network’s employee, all of which were named as defendants. The policy was renewed in 2005 and ended on February 11, 2006. The original policy included coverage for hail and wind damage. On January 24, 2006, the defendant’s insurance broker faxed a renewal offer to the insurance network that mentioned the policy was expiring. However, the original policy lapsed. The network then issued another property damage insurance policy for the plaintiff which did not include wind and hail coverage.
When the owner visited the network’s office to deliver payment for the new policy, he was asked to sign a document which stated that wind and hail coverage was not included in the policy. The Arabic-speaking owner signed the English document without using an English to Arabic translator, and the policy went into effect shortly thereafter.
Store Sustains Property Damage After Storm.
In August of 2006, the plaintiff store sustained roof and water damage following a windstorm. The store immediately notified the insurance network, but the network did not notify defendant Lloyd’s about the property damage claim until seventeen months later. In addition, the network failed to inform the plaintiff that there wasn’t any coverage for wind and hail damage when it submitted the claim.
In 2008, the plaintiff filed a petition for damages against defendant Lloyd’s as a result of its failure to pay for the property damage the store sustained. After defendant Lloyd’s was dismissed as a defendant from the lawsuit, the plaintiff amended its petition twice to include a realty company and the insurance network (“Network”) as defendants.
Store Prevails at Trial; Court Awards Damages.
The case did not go to trial until 2017. The owner and an insurance expert testified at trial along with the Network’s owner and its employee. The court entered judgment in the plaintiff’s favor, finding that the Network had failed to secure insurance coverage for the plaintiff, had failed to act diligently in obtaining wind and hail coverage, and the Arabic-speaking plaintiff was justified in believing that it was insured for hail and wind damage. The trial court also awarded damages to the plaintiff in the sum of $48,486.16.
The Network appealed the trial court’s decision. The Network argued that the court erred by overlooking the fact that the plaintiff’s corporate officers failed to renew the original policy which covered the store in the event of hail and wind damage. The Network also claimed that the plaintiff was focused on another property damage claim as a result of hurricane Katrina and that the U.S. mail was unreliable after Katrina. The network claimed that it wasn’t until the plaintiff’s claim from Hurricane Katrina was resolved that it sought a replacement policy.
In addition to the argument listed above, the Network also argued that the owner was an experienced businessman who was involved in making business and insurance decisions for the plaintiff. Furthermore, Network argued that the owner failed to bring an Arabic interpreter to the Network’s office to interpret or him and that the Network reasonably relied on the owner’s signature and actions that he did not wish to renew the original policy.
Louisiana Court of Appeal Affirms Trial Court’s Decision.
The appellate court rejected the Network’s argument on appeal. The court generally found the store’s witnesses to be more credible than the network’s witnesses. For example, the court considered the owner’s testimony that he did not understand English and that there was no one at Network’s office to explain to him what he was signing in Arabic. The court also considered the owner’s testimony that he relied upon his children or others to translate for him.
The court further relied on the testimony of an insurance expert, who testified that it was improper for an agent to notify a non-English speaker that policy excluded wind and hail coverage without an explanation. The expert testified that in such a situation, the insurance agent should have sent the insured an explanation about the exclusion in writing.
In sum, the appellate court found that the trial testimony indicated that the store officers believed they had wind coverage when the building was damaged and when they reported it to Network. The court also vacated the trial court’s decision to the extent it found that the network was entitled to an offset of damages and awarded the plaintiff even more money.
The case is Upscale Fashions, Inc. v Underwriters at Lloyd’s London, Court No. 2018-CA-0015, decided on August 29, 2018 by the Court of Appeal, Fourth Circuit, State of Louisiana.
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**This translation blog article should not be construed as legal advice. You should always consult an attorney regarding your specific legal needs.
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