Heather Bourg and Susan Bourg v. Safeway Insurance Company of Louisiana and Chris Martinez ( 2020 )

STATE OF LOUISIANA
COURT OF APPEAL
00
FIRST CIRCUIT
1-
p, 2019 CA 0270
lid'
HEATHER BOURG AND SUSAN BOURG
VERSUS
SAFEWAY INSURANCE COMPANY OF LOUISIANA
AND CHRIS MARTINEZ
JUDGMENT RENDERED: MAR 0 5 2020
Appealed from the
Thirty -Second Judicial District Court
In and for the Parish of Terrebonne • State of Louisiana
Docket Number 181, 671 • Division B
The Honorable John R. Walker, Jr., Judge Presiding
Michael W. Landry ATTORNEYS FOR APPELLANTS
Angelique P. Provenzano- Walgamotte DEFENDANTS— Safeway
Tracy L. Oakley Insurance Company of Louisiana
W. Brett Cain and Chris Martinez
Lafayette, Louisiana
Holli K. Yandle
Assistant Attorney General
Lafayette, Louisiana
Dexter A. Gary ATTORNEYS FOR APPELLEE
Danny J. Lirette PLAINTIFF— Susan Bourg
Houma, Louisiana
BEFORE: MCCLENDON, WELCH, AND HOLDRIDGE, JJ.
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WELCH, J.
In this motor vehicle collision case, the defendants seek review of a
summary judgment granted in favor of the plaintiff, finding the insurer in breach of
its duty of good faith and fair dealing; subject to the penalties and attorney' s fees
provisions of La. R.S. 22: 1892; and awarding the plaintiff $22, 862. 47, plus costs
and interest on her third -party property damage claim. For the following reasons,
we reverse and remand.
FACTS AND PROCEDURAL HISTORY
On January 4, 2018, plaintiffs Heather Bourg (" Heather") and Susan Bourg
Ms. Bourg") filed a petition for damages against defendants Chris Martinez and
Safeway Insurance Company of Louisiana (" Safeway"). According to the
allegations of the petition, on October 21, 2017, the 2015 Chevrolet Silverado
operated by Mr. Martinez rear-ended the 2016 Hyundai Sonata operated by
Heather and owned by Ms. Bourg. On the date of that accident, Mr. Martinez had
a policy of automobile liability insurance with Safeway, which provided coverage
for the accident.' Heather claimed that as a result of the accident, which was
caused solely by the negligence of Mr. Martinez, she suffered personal injuries and
sought to recover general and special damages.
Ms. Bourg also raised a property damage claim, alleging entitlement to
statutory penalties and attorney' s fees for Safeway' s alleged breach of the insurer' s
duty of good faith and fair dealing. She claimed that Safeway failed to make an
offer to settle her property damage claim by paying to repair her vehicle in
accordance with La. R.S. 22: 1892, which provides that when a vehicle sustains
property damage in a crash, the insurer has thirty days to adjust the claim and make
a written offer to settle the matter. Ms. Bourg alleged that she provided
1 The policy, No. 2361851 -LA -PP -004, had liability limits of $15, 000. 00 per person/$ 30, 000.00
per accident.
2
satisfactory written proof of loss and demand to Safeway, but that Safeway
arbitrarily, capriciously, or without probable cause failed or refused to make a
timely reasonable offer to settle her property damage claim.' While Safeway
offered to settle her claim by totaling her vehicle, she argued that the offer was
unreasonable,
and therefore arbitrary, capricious, and without probable cause,
because her vehicle was not a " total loss" as evidenced by the facts and defined by
the law.
The plaintiffs also filed an amended petition for damages, wherein Ms.
Bourg alleged that she sustained additional damages, including the cost of renting a
vehicle and the diminished value of her vehicle.
In response to the plaintiffs' petition, the defendants generally denied the
allegations and admitted only that a collision had occurred involving the vehicles
operated by Heather and Mr. Martinez and that Safeway had issued a policy of
automobile liability insurance to Mr. Martinez that was in full force and effect on
the date of the accident. In addition, Safeway asserted that it fulfilled all of its
duties to Ms. Bourg, including those imposed by La. R.S. 22: 1892, with regard to
her property damage claim.
Thereafter, Ms. Bourg' filed a motion for summary judgment against
Safeway on the issue of Safeway' s alleged breach of the insurer' s duty of good
faith and fair dealing and her entitlement to penalties and attorney' s fees under La.
R.S. 22: 1892. Ms. Bourg alleged that she made a written demand on Safeway to
have her vehicle repaired on December 14, 2017. Despite her demand, she
2 Ms. Bourg alleged that Safeway failed to fairly and promptly adjust her property damage claim
within sixty days. That tracks the language of La. R. S. 22: 1973( B)( 5), not the thirty -day time
limit provided for in the statute cited in her petition, La. R. S. 22: 1892. As will be discussed
herein, there is a close relationship between the conduct described in La. R.S. 22: 1892( A)(4) and
B)( 1) and La. R. S. 22: 1973( B)( 5). See Theriot v. Midland Risk Ins. Co., 95- 2895 ( La.
5/ 20/ 97), 694 So. 2d 184, 192 n. 14.
3 Heather did not join Ms. Bourg in the filing of the motion for summary judgment. The trial
court later dismissed all of Heather' s claims against the defendants prior to the summary
judgment hearing, in a judgment signed on July 26, 2018.
3
claimed that Safeway did not and has not paid to have her vehicle repaired.' Ms.
Bourg conceded that Safeway offered to settle her claim by declaring the vehicle a
total loss and retaining the vehicle. She argued that Safeway' s offer was
unreasonable, and therefore arbitrary, capricious, and without probable cause,
based on the facts and applicable law.
Ms. Bourg claimed that Safeway provided her with a repair estimate on
October 25, 2017, showing the cost to repair her vehicle was $ 7, 670. 65. On
November 1, 2017, Safeway made a written settlement offer for the pre -accident
fair market value of her vehicle, in the amount of $ 12, 726. 00, with Safeway
retaining the salvage. Ms. Bourg argued that Louisiana jurisprudence provides that
only when the cost to repair a vehicle exceeds the pre -accident value of a vehicle
can an adjuster declare it a " total loss." Ms. Bourg contended that Safeway
insisted on totaling her vehicle, even though its own estimate of the cost to repair
the vehicle was less than its pre -accident valuation of the vehicle. Ms. Bourg
further argued that Safeway ignored the requirement under La. R.S. 32: 702( 14)
that the cost of repair must be equal to or more than seventy- five percent ( 75%) of
the value assigned by the National Automobile Dealers Association (" NADA")
Guide, before a vehicle can be declared a total loss. Ms. Bourg pointed out that
Safeway' s own repair cost estimate showed that the repair cost was less than
seventy- five percent ( 75%) of the value assigned by the NADA Guide, as well as
less than seventy- five percent ( 75%) of its own valuation. Ms. Bourg averred that
here the cost to repair her vehicle only approached sixty- seven percent ( 67%) of
the fair market value.
4 The actual cost to repair Ms. Bourg' s vehicle was $ 8, 514. 48, which she pursued through her
own liability insurer. She maintained that her own insurance is a collateral source to which the
defendants are not entitled, citing Rogers v. Graves, 2006- 0648 ( La. App. 1St Cir. 2/ 21/ 07), 959
So. 2d 990, 993, writ denied, 2007- 0939 ( La. 6/ 22/ 07), 959 So. 2d 500 (" Under the collateral
source rule, a tortfeasor may not benefit, and an injured plaintiff' s tort recovery may not be
diminished, because of benefits received by the plaintiff from sources independent of the
tortfeasor' s procuration or contribution.").
Accordingly, Ms. Bourg argued that Safeway' s failure to pay her property
damage claim to have her vehicle repaired or to make a reasonable offer to settle
her property damage claim within thirty days of her providing satisfactory written
proof of loss and demand was arbitrary, capricious, and without probable cause.
She sought summary judgment in her favor holding that Safeway violated the
insurer' s duty of good faith and fair dealing and is therefore subject to the statutory
penalties and attorney' s fees provisions of La. R. S. 22: 1892. She claimed
entitlement to an award of $9, 442. 14 in damages ( the cost to repair her vehicle
8, 514. 48) plus the cost of a rental vehicle ($ 927. 66)); a fifty percent ( 50%)
penalty in the amount of $4, 721. 07; and reasonable attorney' s fees in the amount
of $3, 977. 19.
The defendants opposed Ms. Bourg' s motion for summary judgment and
also moved for a continuance on the summary judgment hearing. Safeway argued
that it acted in good faith and dealt fairly at all times and in accordance with La.
R.S. 22: 1892 regarding Ms. Bourg' s property damage claim. Safeway alleged that
it determined the vehicle was a " total loss," and on November 1, 2017— eleven
days after the accident— it extended a written offer of $12, 726. 00, with Safeway
retaining the salvage. On November 28, 2017, Ms. Bourg countered Safeway' s
offer, with an offer to settle her claim for $ 15, 700. 00 ( which included loss of
use/ rental).
On December 5, 2017, Safeway rejected Ms. Bourg' s counteroffer and
extended another offer to settle Ms. Bourg' s claim for $ 12, 726. 00, plus $ 735. 00 for
loss of use/ rental, with Safeway retaining the salvage; or $ 8, 157. 37, plus $ 735. 00
for loss of use/ rental, with Ms. Bourg retaining the salvage. Ms. Bourg declined
Safeway' s December 5, 2017 offer. On December 14, 2017, she made a written
demand on Safeway to pay to have her vehicle repaired.
Safeway contended that the definition of a " total loss" argued by Ms. Bourg
in her motion (when the cost to repair a vehicle exceeds the pre -accident value of a
5
vehicle) is at odds with the definition of " total loss" provided by La. R.S.
32: 702( 14), which states that a total loss " means a motor vehicle ... has sustained
damages equivalent to seventy- five percent or more of the market value as
determined by the most current [ NADA] Handbook." Safeway argued that the
term " market value" as used within La. R.S. 32: 702( 14)' s definition of "total loss"
is undefined, making it ambiguous and unsusceptible to clear interpretation and
proper application. Safeway stated that the NADA Guide contains four possible
valuations for a vehicle—( 1) rough trade- in, ( 2) average trade- in, ( 3) clean trade-
in, and ( 4) clean retail. Safeway averred that Louisiana law does not specify which
of those four valuations represents the " market value" as used in the definition of a
total loss."
Safeway further argued that even without guidance as to which NADA
Guide valuation should be used as the " market value" in determining a " total loss"
under La. R.S. 32: 702( 14), it was nevertheless able to evaluate the damages to Ms.
Bourg' s vehicle and determine that it was a " total loss." Safeway laid out three
scenarios based on the four possible NADA Guide valuations for a 2016 Hyundai
Sonata wherein Ms. Bourg' s vehicle would have sustained damages equivalent to
seventy- five percent ( 75%) or more of the market value using Safeway' s repair
of $ 7, 670. 65.
estimate
In the first scenario, when comparing Safeway' s repair
estimate to each category of the NADA Guide valuations, two of the four
valuations rendered the vehicle a total loss: the rough trade- in percentage would
be 84. 53% and the average trade- in percentage would be 74. 48%. In the second
scenario, factoring in the $ 600. 00 rental car expense, two of the four valuations
rendered the vehicle a total loss: the rough trade- in percentage would be 91. 14%
and the average trade- in percentage would be 80. 30%. In the third scenario,
factoring in the " visible damage estimate," three of the four valuations rendered the
vehicle a total loss: the rough trade- in percentage would be 93. 82%, the average
trade- in percentage would be 82. 66%, and the clean trade- in percentage would be
75. 52%.
Accordingly, Safeway argued that it properly determined that the vehicle
was a " total loss" under the NADA Guide valuations and made a reasonable offer
to settle Ms. Bourg' s property damage claim within thirty days of receipt of
satisfactory written proof of loss and demand. Therefore, Safeway averred that it
did not arbitrarily, capriciously, or without probable cause fail or refuse to offer to
settle Ms. Bourg' s property damage claim or violate its duty of good faith and fair
dealing under La. R.S. 22: 1892.
Prior to the hearing on Ms. Bourg' s motion for summary judgment, Heather
and the defendants settled their claims. The trial court dismissed all of Heather' s
claims against the defendants, while expressly reserving Ms. Bourg' s claims
against the defendants, in a judgment signed on July 26, 2018. Additionally, the
parties stipulated to the defendants' liability as to Ms. Bourg.
Following an August 24, 2018 hearing on Ms. Bourg' s motion for summary
judgment, the trial court denied Safeway' s motion to continue and granted
summary judgment in favor of Heather and Ms. Bourg and against the defendants,
awarding the plaintiffs damages, penalties, and attorney' s fees in the amount of
22, 862. 47, plus costs and interest. The trial court signed a judgment in
accordance with its oral ruling on September 18, 2018.
Thereafter, the defendants filed a motion for new trial and a peremptory
exception raising the objections of no cause and no right of action on October 1,
2018. The defendants argued that Ms. Bourg had no cause or right of action to
assert the bad faith handling of her property damage claim against Safeway under
La. R. S. 22: 1892 as a third -party claimant. Safeway contended that its only
obligation to Ms. Bourg on her third -party property damage claim was to extend a
written offer within thirty days of receipt of satisfactory proof of loss. Safeway
7
argued that it did extend a written offer on her third -party property damage claim
within thirty days of her request, thereby satisfying the requirements of La. R.S.
22: 1892( A)(4). Alternatively, the defendants argued that a motion for new trial
should be granted. The defendants contended that the trial court failed to adhere to
the proper standard for a summary judgment proceeding by weighing evidence
instead of determining that there was no genuine issue as to material fact,
specifically regarding the valuations in the NADA Guide reports submitted by the
parties.
Alternatively, the defendants averred that the trial court failed to give
credit for any payments made by Ms. Bourg' s own insurance company on her
behalf, and that the trial court should reduce her award by $ 6, 514. 48, which was
paid by her insurer for repairs to her vehicle.
Ms. Bourg opposed the defendants' motion for new trial and peremptory
exception. Following a hearing, the trial court denied the defendants' motion for
new trial and peremptory exception in a judgment signed on November 21, 2018.
The defendants now suspensively appeal the November 21, 2018 judgment.
APPELLATE JURISDICTION
Appellate courts have a duty to examine subject matter jurisdiction sua
sponte, even when the parties do not raise the issue. Texas Gas Exploration
Corp. v. Lafourche Realty Co., Inc., 2011- 0520 ( La. App. Pt Cir. 11/ 9/ 11), 79
So. 3d 1054, 1059, writ denied, 2012- 0360 ( La. 4/ 9/ 12), 85 So. 3d 698. Our
appellate jurisdiction extends to " final judgments," which are those that determine
the merits in whole or in part. La. C. C. P. arts. 1841 and 2083; see Van ex rel.
White v. Davis, 2000- 0206 ( La. App. 1St Cir. 2/ 16/ 01), 808 So. 2d 478, 483.
The established rule in this circuit is that the denial of a motion for new trial
is an interlocutory and non -appealable judgment.' McKee v. Wal- Mart Stores,
5
By 2005 La. Acts No. 205, § 1 ( eff. Jan. 1, 2006), La. C. C. P. art. 2083 was amended to remove
the longstanding provision that interlocutory judgments that " may cause irreparable harm" are
appealable.
An interlocutory judgment is now appealable only when expressly provided by law.
E
Inc., 2006- 1672 ( La. App. 1St Cir. 6/ 8/ 07), 964 So. 2d 1008, 1013, writ denied,
2007- 1655 ( La. 10/ 26/ 07), 966 So. 2d 583. Similarly, the overruling of a
peremptory exception raising the objection of no right of action or no cause of
action is an interlocutory ruling that is not appealable. See Bennett v. Arkansas
Blue Cross Blue Shield, 2005- 1714 ( La. App. 1St Cir. 9/ 15/ 06), 943 So. 2d 1124,
1126, and CamSoft Data Sys., Inc. v. S. Elecs. Supply, Inc., 2015- 0881 ( La.
App. 1St Cir. 7/ 14/ 15), 180 So. 3d 382, 383. However, the Louisiana Supreme
Court has directed us to consider an appeal of the denial of a motion for new trial
as an appeal of the judgment on the merits as well, when it is clear from the
appellant' s brief that he intended to appeal the merits of the case. Carpenter v.
Hannan, 2001- 0467 ( La. App. Pt Cir. 3/ 28/ 02), 818 So. 2d 226, 228- 29, writ
denied, 2002- 1707 ( La. 10/ 25/ 02), 827 So. 2d 1153.
Furthermore, when an unrestricted appeal is taken from a final judgment, the
appellant is entitled to seek review of all adverse interlocutory rulings prejudicial
to him, in addition to the review of the final judgment. Landry v. Leonard J.
Chabert Med. Ctr., 2002- 1559 ( La. App. 1St Cir. 5/ 14/ 03), 858 So. 2d 454, 461
n. 4, writs denied, 2003- 1748, 2003- 1752 ( La. 10/ 17/ 03), 855 So. 2d 761, 761.
Thus, an interlocutory denial of a motion for new trial or denial of a peremptory
exception is subject to review on appeal in connection with the review of an
appealable judgment in the same case. See Moran v. G & G Const., 2003- 2447
La. App. 1St Cir. 10/ 29/ 04), 897 So. 2d 75, 83 n. 4, writ denied, 2004- 2901 ( La.
2/ 25/ 05), 894 So. 2d 1148.
The standard of review of a denial of a motion for new trial, whether on
peremptory or discretionary grounds, is that of abuse of discretion. Rao v. Rao,
2005- 0059 ( La. App. 1St Cir. 11/ 4/ 05), 927 So. 2d 356, 361, writ denied, 2005 -
La. C. C. P. art. 2083( C). Accordingly, the denial of a new trial is not generally appealable.
McKee, 964 So. 2d at 1013 n. 8.
9
2453 ( La. 3/ 24/ 06), 925 So. 2d 1232. A peremptory exception raising the
objections of no cause or no right of action presents legal questions, which are
reviewed using the de novo standard of review. See Reyer v. Milton Homes,
LLC, 2018- 0580 ( La. App. 1St Cir. 2/ 25/ 19), 272 So. 3d 604, 607, and LeCompte
v. Cont' l Cas. Co., 2016- 1359 ( La. App. Pt Cir. 7/ 12/ 17), 224 So. 3d 1005, 1009,
writ denied, 2017- 1525 ( La. 12/ 15/ 17), 231 So. 3d 635.
It is obvious from the defendants' brief that they intended to appeal the
judgment on the merits— the September 18, 2018 judgment granting Ms. Bourg' s
motion for summary judgment and awarding damages, penalties, attorney' s fees,
interest, and costs. The granting of a motion for summary judgment is a final,
appealable judgment. La. C. C. P. art. 1915( A)(3). Thus, we will treat the appeal
accordingly.
LAW AND DISCUSSION
Motion for Summary Judgment
A motion for summary judgment is a procedural device used to avoid a full-
scale trial when there is no genuine issue of material fact. Georgia- Pac.
1st
Consumer Operations, LLC v. City of Baton Rouge, 2017- 1553 ( La. App.
Cir. 7/ 18/ 18), 255 So. 3d 16, 21, writ denied, 2018- 1397 ( La. 12/ 3/ 18), 257 So. 3d
194. After an opportunity for adequate discovery, a motion for summary judgment
shall be granted if the motion, memorandum, and supporting documents show that
there is no genuine issue as to material fact and that the mover is entitled to
judgment as a matter of law. La. C. C. P. art. 966( A)(3).
The burden of proof rests with the mover. Nevertheless, if the mover will
not bear the burden of proof at trial on the issue that is before the court on the
motion for summary judgment, the mover' s burden on the motion does not require
him to negate all essential claims of the adverse party' s claim, action, or defense,
but rather to point out to the court the absence of factual support for one or more
10
elements essential to the adverse party' s claim, action, or defense. The burden is
on the adverse party to produce factual support sufficient to establish the existence
of a genuine issue of material fact or that the mover is not entitled to judgment as a
matter of law. La. C. C. P. art. 966( D)( 1).
Appellate courts review evidence de novo using the same criteria that govern
the trial court' s determination of whether summary judgment is appropriate. Thus,
appellate courts ask the same questions: whether there is any genuine issue of
material fact and whether the mover is entitled to judgment as a matter of law.
Because it is the applicable substantive law that determines materiality, whether a
particular fact in dispute is material can be seen only in light of the substantive law
applicable to the case. Georgia- Pac. Consumer Operations, LLC, 255 So. 3d at
22.
Insurer' s Duty of Good Faith and Fair Dealing
The substantive law applicable to this case are the well- settled principles
governing insurance " bad faith" claims in Louisiana. Insurance " bad faith' law is
codified in La. R. S. 22: 1892 ( formerly La. R.S. 22: 658) and La. R.S. 22: 1973
formerly La. R.S. 22: 1220). 6 The purpose of these penalty statutes is to " provide
remedies to insureds whose insurance claims are improperly handled or to whom
41"
payment is unreasonably delayed."? Lee v. Sapp, 2017- 0490 ( La. App. Cir.
6 In 2008 La. Acts No. 415, § 1 ( eff. Jan. 1, 2009), the Louisiana Legislature renumbered these
statutes without making any substantive changes.
7 Similar to La. R.S. 22: 1892, La. R.S. 22: 1973 is another statute that allows the imposition of
penalties for an insurer' s failure to deal with its insured in good faith. In Section A, La. R.S.
22: 1973 broadly states an insurer' s duty to its insured to adjust claims fairly and promptly and to
make a reasonable effort to settle claims with the insured or the claimant or both. In Section B,
La. R.S. 22: 1973 enumerates five specific acts that constitute breaches of the duties set forth in
Section A, including subsection ( 5): "[ flailing 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." See Vaughn v.
Franklin, 2000- 0291 ( La. App. 1St Cir. 3/ 28/ 01), 785 So. 2d 79, 91, writ denied, 2001- 1551 ( La.
10/ 5/ 01), 798 So. 2d 969.
There is a close relationship between the conduct described in La. R.S. 22: 1892( B)( 1)
and the conduct described in La. R. S. 22: 1973( B)( 5). See Theriot, 694 So. 2d at 192 n. 14. In
fact, the conduct is virtually identical, i.e., the failure to timely pay a claim after receiving
11
12/ 6/ 17), 234 So. 3d 122, 128, writ denied, 2018- 0044 ( La. 3/ 2/ 18), 269 So. 3d
Louisiana Revised Statutes 22: 1892( A)( 1) requires all insurers to pay the
amount of any claim due any insured within thirty days after receipt of satisfactory
proofs of loss. The statute sets forth affirmative duties for insurers and prescribes
penalties for their breach. Louisiana Revised Statutes 22: 1892 provides, in
pertinent part:
A. ( 1) All insurers issuing any type of contract, other
than those specified in R.S. 22: 1811, 1821, and Chapter
10 of Title 23 of the Louisiana Revised Statutes of 1950,
shall pay the amount of any claim due any insured within
thirty days after receipt of satisfactory proofs of loss from
the insured or any party in interest. ...
2) All insurers issuing any type of contract, other than
those specified in R.S. 22: 1811, R.S. 22: 1821, and
Chapter 10 of Title 23 of the Louisiana Revised Statutes
of 1950, shall pay the amount of any third party property
damage claim and of any reasonable medical expenses
claim due any bona fide third party claimant within thirty
days after written agreement of settlement of the claim
from any third party claimant.
4) All insurers shall make a written offer to settle any
property damage claim, including a third -party claim,
within thirty days after receipt of satisfactory proofs
of loss of that claim.
B. ( 1) Failure to make such payment within thirty days
after receipt of such satisfactory written proofs and
satisfactory proof of loss when that failure to pay is arbitrary, capricious, or without probable
cause. The primary difference is that under La. R.S. 22: 1892( A)( 1) and ( B)( 1), the insurer must
pay the claim within thirty days of receiving satisfactory proof of loss, rather than the longer
sixty- day period under La. R. S. 22: 1973( B)( 5). See Calogero v. Safeway Ins. Co. of
Louisiana, 99- 1625 ( La. 1/ 19/ 00), 753 So. 2d 170, 174. Furthermore, unlike La. R.S. 22: 1892,
the penalty provision of La. R.S. 22: 1973 is applicable only after a showing is made of actual
damages resulting from the breach of the insurer' s duties. See Khaled v. Windham, 94- 2171
La. App. 1St Cir. 6/ 23/ 95), 657 So. 2d 672, 680, writs dismissed, 95- 1914, 95- 1937 ( La.
11/ 1/ 95), 661 So. 2d 1369.
Where La. R.S. 22: 1973 provides the greater penalty, it supersedes La. R.S. 22: 1892, such
that the insured cannot recover penalties under both statutes. However, because La. R.S.
22: 1973 does not provide for attorney' s fees, the insured is entitled to recover the greater
penalties under its provisions and attorney fees under La. R.S. 22: 1892 for its insurer' s arbitrary
or capricious failure to timely pay his claim after receiving satisfactory proof of loss. See
Calogero, 753 So. 2d at 174.
12
demand therefor or failure to make a written offer to
settle any property damage claim, including a third -
party claim, within thirty days after receipt of
satisfactory proofs of loss of that claim, as provided in
Paragraphs ( A)( 1) and ( 4) of this Section, respectively, or
failure to make such payment within thirty days after
written agreement or settlement as provided in Paragraph
A)(2) of this Section when such failure is found to be
arbitrary, capricious, or without probable cause, shall
subject the insurer to a penalty, in addition to the
amount of the loss, of fifty percent damages on the
amount found to be due from the insurer to the
insured, or one thousand dollars, whichever is
greater, payable to the insured, or to any of said
employees, or in the event a partial payment or tender has
been made, fifty percent of the difference between the
amount paid or tendered and the amount found to be due
as well as reasonable attorney fees and costs. Such
penalties, if awarded, shall not be used by the insurer in
computing either past or prospective loss experience for
the purpose of setting rates or making rate filings.
4) Whenever a property damage claim is on a
personal vehicle owned by the third party claimant
and as a direct consequence of the inactions of the insurer
and the third party claimant' s loss the third party
claimant is deprived of use of the personal vehicle for
more than five working days, excluding Saturdays,
Sundays, and holidays, the insurer responsible for
payment of the claim shall pay, to the extent legally
responsible,
for reasonable expenses incurred by the
third party claimant in obtaining alternative
transportation for the entire period of time during
which the third party claimant is without the use of
his personal vehicle. Failure to make such payment
within thirty days after receipt of adequate written proof
and demand therefor, when such failure is found to be
arbitrary, capricious, or without probable cause shall
subject the insurer to, in addition to the amount of such
reasonable expenses incurred, a reasonable penalty not to
exceed ten percent of such reasonable expenses or one
thousand dollars whichever is greater together with
reasonable attorneys fees for the collection of such
expenses. [ Emphasis added.]
The statute mandates the imposition of penalties and attorney' s fees when an
insurer fails to pay a claimant or make a written offer to settle a property damage
claim in accord with the statutory provisions. See Dixon v. First Premium Ins.
13
Grp., 2005- 0988 ( La. App. 1" Cir. 3/ 29/ 06), 934 So. 2d 134, 141, writ denied,
2006- 0978 ( La. 6/ 16/ 06), 929 So. 2d 1291. This statute must be strictly construed
because it is penal in nature.8 Richardson v. GEICO Indem. Co., 2010- 0208 ( La.
App. Pt Cir. 9/ 10/ 10), 48 So. 3d 307, 314, writ denied, 2010- 2473 ( La. 12/ 17/ 10),
51 So. 3d 7. It subjects an insurer, when it is arbitrary or capricious in failing to
unconditionally tender the undisputed amount or make a written offer to settle a
claim within thirty days of satisfactory proof of loss, to the mandatory imposition
of penalties and attorney' s fees for the collection of such amount. See Calogero v.
Safeway Ins. Co. of Louisiana, 99- 1625 ( La. 1/ 19/ 00), 753 So. 2d 170, 174.
Under Louisiana Revised Statutes 22: 1892, an insurer " has no duty to make an
unconditional payment to a third party." The statute requires only a written offer
to settle. Bosley v. Oliphint Enterprises, LLC, 51, 585 ( La. App. 2" d Cir.
9/ 27/ 17), 244 So. 3d 692, 699.
A " satisfactory proof of loss" is that which is sufficient to fully apprise the
insurer of the insured' s claim. To establish a " satisfactory proof of loss," the
claimant must show that the insurer received sufficient facts to fully apprise the
insurer ( 1) that the owner or operator of the other vehicle involved in the accident
was uninsured or underinsured; ( 2) that he was at fault; and ( 3) that such fault gave
rise to damages. The information must also indicate the extent of those damages.
See McDill v. Utica Mut. Ins. Co., 475 So. 2d 1085, 1089 ( La. 1985); Fontana v.
Louisiana Sheriffs' Auto. Risk Program, 96- 2752 ( La. App. 1St Cir. 6/ 20/ 97),
697 So. 2d 1037, 1039.
Thus, in order to prevail under La. R.S. 22: 1892, a claimant must establish
1) that the insurer received satisfactory proof of loss; ( 2) failed to pay the claim
within the applicable statutory period, or failed to make a written offer to settle the
8 Louisiana Revised Statutes 22: 1892 is also applicable to uninsured ( UM) and underinsured
UIM) claims. See Richardson, 48 So. 3d at 314.
14
claim, and ( 3) that the failure to timely tender a reasonable amount was arbitrary,
capricious, or without probable cause.
Our Supreme Court has held that the phrase " arbitrary, capricious or without
probable cause" is synonymous with " vexatious." A vexatious refusal to pay
means one that is unjustified, without reasonable cause or excuse. Both phrases
describe an insurer whose willful refusal of a claim is not based on a good faith
defense. Guillory v. Lee, 2009- 0075 ( La. 6/ 26/ 09), 16 So. 3d 1104, 1127. The
determination as to whether an insurer' s handling of a claim is arbitrary and
capricious is one of fact. See Khaled v. Windham, 94- 2171 ( La. App. 1St Cir.
6/ 23/ 95), 657 So. 2d 672, 679, writs dismissed, 95- 1914, 95- 1937 ( La. 11/ 1/ 95),
661 So. 2d 1369.
Assignment ofError 1: Does La. R.S. 22: 1892 Apply to Third -Party Claims?
In their first assignment of error, the defendants argue that the trial court
erred in finding that Safeway had a duty to pay Ms. Bourg' s third -party claim
within thirty days of satisfactory proof of loss, contending that La. R.S.
22: 1892( A)( 1) only applies to first -party claims. Safeway argued that its only duty
in this instance— which it fulfilled— was to make a written offer to settle Ms.
Bourg' s third -party property damage claim within thirty days after receipt of
satisfactory proof of loss under La. R.S. 22: 1892( A)(4).
In the world of insurance, a first -party claim is a claim filed by an insured
against his own insurer for damage to property or person; whereas a third -party
claim is made by a claimant against the insured for damages allegedly caused by
the insured. See Lee, 234 So. 3d at 130 ( citing Gary Langlois, Jr., Kelly v. State
Farm Fire &
Casualty Company: Practical Effects Resulting from an Expansion of
Insurers' Broad Good–Faith Duty, 61 Loy. L. Rev. 799, 805 ( 2015)). This court
in Wicker v. Allstate Prop. & Cas. Ins. Co., 2018- 1571 ( La. App. 1St Cir.
5/ 31/ 19), 2019 WL 2317558, at * 4 ( unpublished), writ denied, 2019- 01112 ( La.
15
10/ 8/ 19), 280 So. 3d 170, held that La. R. S. 22: 1892( B)( 1) does provide for an
award of penalties and attorney' s fees in favor of a third -party claimant against an
insurer who violates La. R.S. 22: 1892( A)(4) by failing to make an offer of
settlement after receiving satisfactory proof of loss, if the insurer' s failure to do so
is arbitrary, capricious, or without probable cause.
In the instant matter, Safeway made a timely, written offer to settle Ms.
Bourg' s third -party property damage claim under La. R.S. 22: 1892( A)(4).
Louisiana Revised Statutes 22: 1892( A)(4) requires only a written offer to settle; an
insurer " has no duty to make an unconditional payment to a third party" under the
statute.
Bosley, 244 So. 3d at 699. Accordingly, the defendants' first assignment
of error has merit.
Assignment of Error 4: Did Evidence Submitted in Opposition to Plaintiffs
Motion for Summary Judgment Create a Genuine Issue ofMaterial Fact?
For ease of discussion, we next examine the defendants' fourth assignment
of error, wherein the defendants argue that the trial court erred in not finding that
the affidavit of Lara Simoneaux, submitted in opposition to the motion for
summary judgment, created a genuine issue of material fact as to whether Ms.
Bourg' s vehicle was a " total loss."
As the mover, Ms. Bourg had the burden of proof on the motion for
summary judgment. La. C. C. P. art. 966( D)( 1). She had to establish that Safeway
received satisfactory proof of loss, failed to make a written offer to settle her
property damage claim within thirty days, and that Safeway' s failure was arbitrary,
capricious, or without cause, entitling her to penalties and attorney' s fees. See La.
R.S. 22: 1892( A)(4) and ( 13)( 1). Ms. Bourg does not dispute that she provided
satisfactory proof of loss and that Safeway made a timely written offer to settle her
claim.
Her argument is that Safeway' s decision to declare her vehicle a " total loss"
16
and its settlement offer was unreasonable, and therefore arbitrary, capricious, or
without probable based on the facts and applicable law.
In support of her motion, Ms. Bourg submitted Safeway' s October 25, 2017
repair estimate showing the cost to repair her vehicle was $ 7, 670. 65. She also
submitted Safeway' s initial November 1, 2017 offer to settle her claim for the fair
market value of her vehicle in the amount of $12, 726. 00, with Safeway retaining
the salvage. She argued that Louisiana jurisprudence provides that only when the
cost to repair a vehicle exceeds the pre -accident value of a vehicle can an adjuster
declare it a total loss. Ms. Bourg contended that despite Safeway' s own damage
estimate and pre -accident fair market valuation, the cost to repair her vehicle did
not exceed pre -accident value of her vehicle. Ms. Bourg further argued that using
Safeway' s damage estimate and fair market valuation, the cost to repair her vehicle
only equaled at best sixty-seven percent ( 67%) of the fair market value— not equal
to or more than seventy- five percent ( 75%) of the fair market value— which is
required under La. R.S. 32: 702( 14) before a vehicle can be declared a " total loss."
Based on Safeway' s own damage estimate and fair market valuation, Ms. Bourg
argued that Safeway was without probable cause to refuse to pay to have the
vehicle repaired, and was therefore arbitrary and capricious. Accordingly, she
averred that she was entitled to summary judgment as a matter of law and an award
of penalties and attorney' s fees under La. R.S. 22: 1892( A)(4) and ( B)( 1).
In opposition, the defendants submitted the affidavit of Lara Simoneaux, the
property damage supervisor for Safeway. Ms. Simoneaux stated that after Ms.
Bourg asserted her property damage claim, Safeway prepared a visible damage
estimate totaling $ 7, 670. 65. Then, considering the visible damage estimate, the
likelihood of hidden damage ( which could result in supplemental repair estimates
and an increase in the costs of repairs), the likelihood of the availability of like
kind and quality/ aftermarket parts versus original equipment manufacturer parts to
17
use in repair, the general condition of the vehicle, accident history, mileage,
likelihood of diminished value, market study values ( including but not limited to
the NADA Guide), Safeway determined that Ms. Bourg' s vehicle was a " total
loss." Safeway then determined the salvage value of the vehicle—$ 12, 726. 00— by
evaluating the tread on the tires ( two of the four tires had tread of 3/ 32 versus
11/ 32 treat on the other two tires), wearing of the carpet on the left front, and
staining on the left front seat bottom. Furthermore, Ms. Simoneaux stated that the
NADA Guide value of $14, 650.00 presented in Ms. Bourg' s November 28, 2017
counteroffer was incorrect because that inflated value did not take into
consideration the impact of the actual mileage on the vehicle' s valuation, which
results in a lower valuation.
The affidavit of Ms. Simoneaux submitted by Safeway in opposition to Ms.
Bourg' s motion for summary judgment creates a genuine issue of material fact
regarding whether Safeway' s decision to declare the vehicle a " total loss" and the
amount of its settlement offer was arbitrary, capricious, or without probable cause.
There exists a genuine issue of material fact as to the fair market value that should
be used in determining whether Ms. Bourg' s vehicle was a " total loss." Based on
our de novo review of the record, we find that the trial court erred in granting
summary judgment in favor of Ms. Bourg.'
DECREE
Based on the foregoing, the September 18, 2018 judgment granting Plaintiff
Susan Bourg' s motion for summary judgment against Defendants Chris Martinez
and Safeway Insurance Company of Louisiana, and awarding Heather and Susan
Bourg10 damages, penalties, and attorney' s fees in the amount of $22, 862.47, plus
9
Accordingly, we pretermit discussion of the defendants' remaining assignments of error.
10 We note that were we not reversing the September 18, 2018 judgment, the portion of the
judgment granting relief to Heather was in error because Heather did not move for summary
18
costs and interest, is hereby reversed. This matter is remanded to the trial court.
All costs of this appeal are assessed equally among the parties.
REVERSED; REMANDED.
judgment, and she was dismissed from the suit prior to the hearing and ruling on Ms. Bourg' s
motion for summary judgment.
Additionally, the portion of September 18, 2018 judgment rendered against Chris
Martinez was in error because Ms. Bourg only filed her motion for summary judgment against
Safeway. Louisiana Code of Civil Procedure article 966( F) makes clear that a summary
judgment may be " rendered or affirmed only as to those issues set forth in the motion under
consideration by the court at that time." See also Leet v. Hosp. Serv. Dist. No. 1 of E. Baton
Rouge Par., 2018- 1148 ( La. App. 1" Cir. 2/ 28/ 19), 274 So. 3d 583, 590- 91. As held by our
Supreme Court, a court cannot render a motion for summary judgment dismissing a claim which
has not been challenged by the pleading. Hoover v. Hoover, 2001- 2200 ( La. 4/ 3/ 02), 813 So. 2d
329, 334.
W