## Facts

- Carlos Metoyer’s New Orleans home sustained major damage during Hurricane Katrina.
- Metoyer held a homeowners (wind) policy with Auto Club Family Insurance Company (ACFIC) and a separate flood policy with Allstate.
- Metoyer received payments of $57,907.62 from ACFIC (wind) and $128,000 from Allstate (flood).
- Metoyer also received approximately $150,000–$160,000 in rebuilding assistance through Louisiana Recovery Authority (LRA) and SBA-related programs.
- As a condition of receiving LRA funds, recipients were required to subrogate to the LRA any rights to future private-insurance recoveries up to the grant amount.
- Metoyer sued ACFIC for breach of the homeowners policy, seeking additional policy benefits.
- Before trial, Metoyer moved in limine to exclude evidence of LRA payments and other collateral payments; ACFIC argued the collateral-source rule did not apply to contract claims and that the evidence was needed to prevent double recovery.

## Issues

1. Whether Louisiana’s collateral-source rule can apply in a breach-of-contract action on an insurance policy to prevent the insurer from reducing liability based on LRA rebuilding grants.
2. Whether evidence of Metoyer’s LRA grants and flood-insurance proceeds should be excluded at trial under the collateral-source rule.

## Decision

- The court held that Louisiana’s collateral-source rule may apply in an insurance contract dispute and is not categorically limited to tort actions.
- The court granted the motion in limine as to LRA proceeds, excluding evidence of the grants and barring ACFIC from using them as an offset or credit.
- The court deferred ruling on the admissibility and effect of flood-insurance proceeds until trial due to an undeveloped factual record on overlap between wind and flood losses.
- The court granted ACFIC’s motion to amend its witness and exhibit list.

## Legal Principles

- Under Louisiana law, collateral payments from independent sources generally do not reduce a defendant’s liability to the plaintiff.
- Collateral-source principles may apply outside tort when their policies are served, including in insurance contract litigation.
- “Diminution of patrimony” (plaintiff payment or consideration for the benefit) is a relevant factor but not an absolute prerequisite to collateral-source treatment under Louisiana jurisprudence.
- Government disaster-recovery grants accompanied by subrogation rights can qualify as collateral sources where the grant program’s structure prevents double recovery and where an offset would shift the benefit of public funds to a private insurer.
- Whether other insurance proceeds (e.g., flood payments) constitute an impermissible double recovery may depend on factual proof of duplication for the same items of loss.

## Conclusion

The court treated LRA Katrina rebuilding grants as a collateral source in an insurance breach-of-contract action, excluding the grants from evidence and preventing the wind insurer from offsetting its contractual liability, while reserving for trial whether flood-insurance proceeds overlapped with the claimed wind losses.


Metoyer v. Auto Club Fam. Ins. Co., 536 F. Supp. 2d 664 (E.D. La. 2008)