IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 18-31008

NAZ, L.L.C., 

 Plaintiff - Appellant

v.

UNITED NATIONAL INSURANCE COMPANY, 

 Defendant - Appellee

Appeal from the United States District Court

for the Eastern District of Louisiana

USDC No. 2:17-CV-5697

Before SMITH, WIENER, and ELROD, Circuit Judges.

PER CURIAM:*

Plaintiff-Appellant NAZ, L.L.C. (“NAZ”) is the owner of a medical facility 

and is itself owned by Dr. Morteza Shamsnia (“Dr. Shamsnia”) and Simin 

Mirtaheri. In December 2014, Defendant-Appellee United National Insurance 

Company (“UNIC”) issued an insurance policy to NAZ covering its medical 

facility.

 

* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not 

be published and is not precedent except under the limited circumstances set forth in 5TH 

CIR. R. 47.5.4.

United States Court of Appeals

Fifth Circuit

FILED

June 25, 2019

Lyle W. Cayce

Clerk

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I. FACTS AND PROCEEDINGS

On January 15, 2015, NAZ’s medical facility sustained water damage 

during a thunderstorm. NAZ filed an insurance claim with UNIC on December 

17, 2015 for the water damage. NAZ had made repairs to the medical facility 

before filing that claim. UNIC’s local adjuster first met with Dr. Shamsnia in 

January 2016. On February 3, 2016, UNIC sent the first of several Reservation 

of Rights (“ROR”) letters to NAZ and requested complete records of the damage 

and repairs.1 On March 25, 2016, after meeting with Dr. Shamsnia, the local 

adjuster recommended denial of the claim because the damage to the roof,

which caused the water damage to the facility, was not covered by the policy. 

He also recommended as a precaution that an engineer inspect the facility in 

case litigation should ensue. 

UNIC sent several letters to NAZ requesting records of the repairs, 

photos of the damage, and any documentation supporting NAZ’s claim.2 The 

local adjuster attempted to schedule an inspection with an engineer but was 

unable to do so. On June 5, 2016, more than four months after UNIC’s first 

letter, and again on August 11, 2016, Dr. Shamsnia sent UNIC some photos of 

the damage. 

UNIC sent a second ROR letter to NAZ on August 30, 2016. UNIC sent 

a third ROR letter to NAZ on September 23, 2016, and included a proof of loss 

claim form. The local adjuster met with Dr. Shamsnia on November 28, 2016 

to complete the proof of loss claim form. UNIC sent a final ROR letter to NAZ 

on December 7, 2016, and rejected NAZ’s proof of loss “because [Dr. Shamsnia] 

 

1 A reservation of rights letter notifies the insured that the policy may not cover a 

stated claim. 2 UNIC sent letters on February 3, 2016, March 3, 2016, April 7, 2016, May 3, 2016, 

May 6, 2016, June 15, 2016, July 21, 2016, August 30, 2016, September 23, 2016, October 21, 

2016, and November 18, 2016. 

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ha[d] not provided documentation to support [the] damages and because [the] 

investigation of this claim [wa]s ongoing.” NAZ wrote to UNIC on December 

28, 2016, acknowledging receipt of the letter denying the proof of loss form but 

stating that it was “looking forward to an amicable resolution” of the claim. 

NAZ filed suit against UNIC on April 20, 2017.3 NAZ alleged that UNIC

had breached (1) the insurance contract and (2) its duty of good faith and fair 

dealing. In August 2018, the district court granted UNIC’s summary judgment 

motion and dismissed NAZ’s claims.4 The district court ruled that NAZ’s 

breach of contract claim had (1) prescribed and (2) did “not create[] a material 

issue of fact as to the waiver of the limitation period of its policy with UNIC” 

because “[n]o reasonable insured would be lulled into inaction by [UNIC’s] 

communications.”5 On NAZ’s breach of duty claim, the district court ruled that 

UNIC did not breach its duty because (1) it had no duty to inform NAZ about 

the limitation period contained in the policy and (2) “no reasonable juror could 

find that [UNIC] acted arbitrarily, capriciously, or without probable cause in 

refusing payment” of the claim.6 NAZ now appeals the grant of summary 

judgment.

II. STANDARD OF REVIEW

We review a summary judgment de novo and apply the same standard 

as the district court.7 Summary judgment is proper under Federal Rule of Civil 

Procedure 56, “if the movant shows that there is no genuine dispute as to any 

 

3 Many of the dates alleged in the complaint are different from the dates alleged in 

NAZ’s brief.

4 NAZ, L.L.C. v. United Nat’l Ins. Co., No. 17-5697, 2018 WL 3997299, at *5 (E.D. La. 

Aug. 21, 2018).

5 Id. at *3. 

6 Id. at *4.

7 McCoy v. City of Shreveport, 492 F.3d 551, 556 (5th Cir. 2007) (citing Willis v. Coca 

Cola Enters., Inc., 445 F.3d 413, 416 (5th Cir. 2006)).

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material fact and the movant is entitled to judgment as a matter of law.”8 If 

the moving party meets that burden, the non-moving party must show the 

existence of a genuine issue for trial,9 and the evidence and the inferences must 

be viewed in the light most favorable to the non-movant.10 Conclusional 

allegations, unsubstantiated assertions, or a mere “scintilla” of evidence is not 

sufficient to defeat summary judgment.11

III. ANALYSIS

A. Breach of Contract

The UNIC insurance policy issued to NAZ includes the following 

limitation provision: “No one may bring a legal action against us . . . unless . . 

. [t]he action is brought within 2 years after the date on which the direct 

physical loss or damage occurred.” “[T]he contents of the policy constitute the 

law between the parties, which will be enforced as written if the terms are clear 

and express the intent of the parties.”12

The property damage occurred on January 15, 2015; but NAZ did not file 

suit until April 20, 2017, so NAZ’s claim is facially prescribed. The burden thus 

shifts to NAZ to demonstrate that the claim is not prescribed.13 NAZ asserts

that UNIC waived the limitation period. 

An insurer waives a limitation period if its “overall actions” lead the 

insured “to reasonably believe the insurer w[ill] not require compliance with 

the policy provision that suit must be filed within [the limitation period].”14

“The insurer cannot hold out the hope of an amicable adjustment of the loss, 

 

8 Fed. R. Civ. P. 56(a). 

9 Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 585–87 (1986).

10 FDIC v. Dawson, 4 F.3d 1303, 1306 (5th Cir. 1993).

11 Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (en banc).

12 Estate of DeGraauw v. Travelers Ins. Co., 06-547, p.6 (La. App. 3 Cir. 9/27/06); 940 

So.2d 858, 863. 

13 Estate of DeGraauw, 06-547, p.6; 940 So.2d at 863. 

14 Blum v. Cherokee Ins. Co., 336 So.2d 894, 897 (La. App. 4 Cir. 1976). 

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and thus delay the action of the insured, and then plead the delay, caused by 

his own conduct, as a defense to the action when brought.”15 Using factintensive analyses, courts have found no evidence of waiver when

there was no admission or recognition of liability, no assurance of 

payment, no late request for additional information or for time to 

investigate the claim further, no intentional delay of adjustment 

beyond the limitation period, and no prolonged or continuous 

negotiations, lasting through most of the limitation period, which 

might tend to hold out a reasonable hope of amicable adjustment.16

Louisiana law states that “[m]ere investigation of a claim or loss does not 

constitute conduct which may be taken as a waiver of a policy provision.”17

Rather, “[u]nless the insurer . . . leads the insured to reasonably believe the 

time limitation has been waived while the claim is under consideration . . . the 

suit must be filed within the prescribed period even if the claim is pending.”18

NAZ contends that a jury could conclude that UNIC deceived NAZ 

regarding the limitation period. NAZ asserts that UNIC (1) communicated 

continuously with NAZ throughout the limitation period, (2) made late 

requests for additional information, (3) withheld information about the 

limitation period, and (4) intentionally delayed adjustment of the claim.19 NAZ 

maintains that these actions induced it to “hold out a reasonable hope of 

amicable adjustment” of its claim.20

 

15 Brocato v. Sun Underwriters Ins. Co. of N.Y., 53 So.2d 246, 249 (La. 1951). 

16 Washington v. Allstate Ins. Co., 901 F.2d 1281, 1288 (5th Cir. 1990) (citing Blum, 

366 So.2d at 898, 900).

17 Id. at 1287; La. R.S. § 22:879. 

18 Maurice v. Prudential Ins. Co., 02-993, p.4–5 (La. App. 4 Cir. 10/23/02); 831 So.2d 

381, 385. 

19 See Washington, 901 F.2d at 1288. 

20 Blum, 336 So.2d at 898. 

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This case “must be decided on its own facts and circumstances.”21 First, 

UNIC did communicate with Dr. Shamsnia throughout the limitation period. 

That communication, however, demonstrates that it was not reasonable for 

NAZ to believe its claim would be resolved without a lawsuit because (1) UNIC 

repeatedly reserved its rights in the ROR letters, (2) UNIC rejected NAZ’s proof 

of loss, and (3) the parties discussed the possibility of litigation. Additionally, 

at no time did UNIC admit liability or assure payment. 

Second, UNIC continued the investigation and repeatedly requested 

documentation because NAZ failed to provide consistent information sufficient 

to adjust the claim. Third, UNIC was under no obligation to advise NAZ of the 

limitation provision contained in the insurance policy. Louisiana courts have 

repeatedly held that insurers do not have a responsibility to inform their 

insureds of time limitations contained in their policies because “insured[s] [are] 

presumed to know the contents of [their] polic[ies].”22 “An insured cannot . . . 

avoid a limitations provision on the grounds of not having been advised of its 

existence by the insurer.”23

Finally, UNIC did not intentionally delay adjustment of the claim 

because it was waiting for NAZ to submit necessary documentation regarding 

the damage and repairs. Neither was Dr. Shamsnia’s alleged subjective belief 

that the claim could be amicably resolved reasonable because, by December 

2016, UNIC had denied NAZ’s proof of loss and discussed potential litigation.

 

21 Id. at 897. 

22 Orleans Par. Sch. Bd. v. Lexington Ins. Co., 12-1686, p. 27 (La. App. 4 Cir. 6/5/13); 

118 So.3d 1203, 1222. 

23 Id. (quoting Allan Windt, Insurance Claims & Disputes, Representation of 

Insurance Companies and Insureds, § 9.5 (5th ed. 2007)); see also Bennett v. State Farm Ins. 

Co., 03-1195, p.11–12 (La. App. 3 Cir. 3/24/04); 869 So.2d 321, 329 (holding that the insurer

did not mislead the insured about the prescriptive period by failing to discuss it). 

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In summary, at no time during the pendency of the claim did UNIC (1) 

admit or recognize liability or debt or (2) provide assurance of payment or make 

an unconditional offer of payment. Neither were there prolonged or continuous 

negotiations.24 UNIC made no acts of reparation or indemnity,25 and the 

parties discussed the possibility of litigating the claim. On these facts, UNIC 

did not waive the limitation period, and it was not reasonable for NAZ to 

believe that UNIC would not require compliance with the policy limitations. 

B. Breach of Duty

Under Louisiana law, “[a]n insurer . . . owes to his insured a duty of good 

faith and fair dealing.”26 Louisiana Revised Statute § 22:1973(A) states that 

“[t]he insurer has an affirmative duty to adjust claims fairly and promptly and 

to make a reasonable effort to settle claims with the insured or the claimant, 

or both. Any insurer who breaches these duties shall be liable for any damages 

sustained as a result of the breach.”27 Subsection B states that an insurer 

breaches its duties if it knowingly: 

(1) Misrepresent[s] pertinent facts or insurance policy 

provisions relating to any coverages at issue. 

. . . .

 

24 Washington, 901 F.2d at 1288 (citing Blum, 336 So.2d at 898, 900). In fact, there is 

no evidence of any negotiations or settlement offers. Louisiana courts and this court have 

emphasized that negotiations and settlement offers are important factors when evaluating 

waiver of a limitation period. Compare Brocato, 53 So.2d at 506 (finding that the insurer 

waived the limitation period and emphasizing “prolonged negotiations . . . and offers of 

settlement”), and Richardson v. La. Farm Bureau Mut. Ins. Co., 393 So.2d 200, 203 (La. App. 

1 Cir. 1980) (finding that prescription was interrupted by compromise agreement between 

the insurer and the insured), with Washington, 901 F.2d at 1288 (finding that insurer did not 

waive the limitation period and emphasizing that “the parties reached neither a settlement 

nor a compromise; indeed, the parties never even negotiated”).

25 Bennett, 03-1195, p.11; 869 So.2d at 329 (citing Lima v. Schmidt, 595 So.2d 624, 634 

(La. 1992)).

26 La. R.S. § 22:1973(A). 

27 Id. 

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(4) Mislead[s] a claimant as to the applicable prescriptive

period.

(5) Fail[s] to pay the amount of any claim due any person 

insured by the contract within sixty days after receipt of 

satisfactory proof of loss from the claimant when such failure is 

arbitrary, capricious, or without probable cause. 

(6) Fail[s] to pay claims pursuant to R.S. 22:1983 when such 

failure is arbitrary, capricious, or without probable cause.28

This list is not exhaustive, and Subsection A provides an independent 

cause of action.29 Additionally, under Revised Statute § 22:1892, an insured 

has a cause of action for penalties if it can “show that (1) an insurer has 

received satisfactory proof of loss, (2) the insurer failed to tender payment 

within thirty days of receipt thereof, and (3) the insurer’s failure to pay is 

arbitrary, capricious or without probable cause.”30

The Louisiana Supreme Court has held that “‘arbitrary, capricious, or 

without probable cause’ . . . means ‘unjustified, without reasonable or probable 

cause or excuse.’”31 A finding of bad faith is based on the facts known to the 

insurer at the time. The court 

has declined to assess [statutory] penalties “when the insurer has 

a reasonable basis to defend the claim and acts in good-faith 

reliance on that defense.” . . . [E]specially when there is a 

reasonable and legitimate question as to the extent and causation 

of a claim, bad faith should not be inferred from an insurer’s failure 

to pay within the statutory time limits when such reasonable 

doubt exists.32

 

28 Id. § 22:1973(B). 

29 Kelly v. State Farm Fire & Cas. Co., 14-921, p. 16 (La. 5/5/15); 169 So.3d 328, 338.

30 Guillory v. Lee, 09-75, p. 30 (La. 6/26/09); 16 So.3d 1104, 1126. 

31 Id. at p.31; 16 So.3d at 1127. 

32 Id. at p.32; 16 So.3d at 1127 (quoting La. Bag Co. v. Audubon Indem. Co., 08-453, 

p. 14 (La. 12/2/08); 999 So.2d 1104, 1114); Maurice, 02-993, at p.10; 831 So.2d at 388. 

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“[T]he question of arbitrary and capricious behavior is essentially a factual 

issue, and the trial court’s finding should not be disturbed on appeal absent 

manifest error.”33

UNIC’s failure to mention the limitation period contained in the policy

does not constitute a breach of its duty. As stated above, insurers do not have 

a duty to inform insureds of limitation provisions set forth in insurance 

policies.34

NAZ alleges that UNIC breached its duties under Revised Statutes §§ 

22:1973(A), (B), and 1892 because it failed to (1) conduct a thorough 

investigation and (2) fairly and promptly adjust and pay NAZ’s claim. The 

standard for failure to pay a claim under both §§ 22:1973(B) and 1892 is 

arbitrary, capricious, or without probable cause. An insurer’s failure to pay 

does not meet this standard when the insurer has a reasonable basis to defend 

against the claim.35

The district court did not commit manifest error by concluding that 

UNIC did not act in bad faith because, based on the cause of the damages, 

UNIC had legitimate concerns about whether NAZ’s claim was covered. It is 

particularly relevant that on several occasions Dr. Shamsnia altered his report 

of the cause of the damage, at first stating that the damage was caused by a 

thunderstorm and later claiming that it was caused either by faulty 

installation or by repair of an MRI machine. 

 

33 Guillory, 09-75, at p.32; 16 So.3d at 1127. 

34 See Bennett, 03-1195, p.11–12; 869 So.2d at 329 (holding that the insurer did not 

mislead the insured about the prescriptive period by failing to discuss it).

35 Section 1973(A), which establishes the cause of action for the breach of the duty of 

good faith and fair dealing, does not explicitly state a separate standard, and the district 

court and parties operated under the assumption that the arbitrary and capricious standard 

applies. NAZ, 2018 WL 3997299, at *4. Any possibility that the factors used by the Louisiana 

Supreme Court in Kelly v. State Farm Fire & Casualty Co. should be applied instead of the 

arbitrary and capricious standard was not addressed by the parties or the district court. 14-

921, p. 16 (La. 5/5/15); 169 So.3d 328. Therefore, such an argument was waived on appeal. 

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III. CONCLUSION

NAZ’s breach of contract claim is facially prescribed, and UNIC did not 

waive the contractual limitation period. The district court did not err by

granting summary judgment and dismissing NAZ’s breach of contract claim. 

UNIC did not act in bad faith because it had a reasonable basis to defend 

against NAZ’s claim, particularly as to causation. The district court did not err 

by granting summary judgment and dismissing NAZ’s breach of duty claim.

AFFIRMED.

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