Our courts are starting to remind me of one of the Greatest Moments in LSU Football – the 61-17 victory over the 1970 Ole Miss Rebels. Most of our cases, in fact, have been a lot like Archie after the middle of the third quarter. Not on the field. Similarly, many of our strongest cases have been injured by motions, settled, and sealed tighter than Coach Vaught’s toupee.
So, sports fans, let’s give a big geaux for the way Louisiana’s Third Circuit Court of Appeal tackled the issues in Farber v American National and another for their Supremes who looked at the writ for a replay, turned it down, and made the decision final today.
The Farbers‘ home in Vinton, Louisiana, was damaged during Hurricane Rita in the fall of 2005. They made a claim against ANPAC under their homeowner’s policy on September 26, 2005. ANPAC issued a check to the Farbers on January 23, 2006, in the amount of $23,224.66. By certified letter dated May 9, 2006, the Farbers made demand on ANPAC for an additional payment of $179,451.53 based upon a May 3, 2006 report from R & D Insurance Consultants, L.L.C.
As you will see, ANPAC’s $23, 224.66 was little more than a deposit – but what, pray tell, does the opposition to HR1264 have to offer in the way of consumer education that will prevent situations like this in the next disaster.
By certified letter dated May 15, 2006, the Farbers informed ANPAC that they were invoking the appraisal clause of the policy. ANPAC responded by letter on May 19, 2006, informing the Farbers that an engineer had been assigned to inspect their property. The Farbers sent ANPAC a certified letter on May 22, 2006, referencing their prior correspondence and reminding ANPAC of its obligation to nominate an appraiser. The letter advised ANPAC that if it failed to nominate an appraiser within the time allotted under the policy, the Farbers would request that a court appoint an umpire to allow the appraisal process to go forward. After sending ANPAC another follow-up letter regarding appraisal on June 16, 2006, and again receiving no response, the Farbers requested that Judge Wilford Carter of the Fourteenth Judicial District Court in Calcasieu Parish appoint an umpire. On July 7, 2006, Judge Carter wrote to the Farbers informing them that he had appointed retired Judge John Navarre to serve as the umpire in the dispute. ANPAC was not copied on either the Farbers‘ letter requesting appointment of an umpire or Judge Carter’s letter informing the Farbers that an umpire had been appointed.
The Farbers submitted information from their appraiser to Judge Navarre, and on December 28, 2006, an appraisal award of $181,929.05 was signed off by Judge Navarre and the Farbers‘ appraiser. By certified letter dated December 29, 2006, the Farbers notified ANPAC of the appraisal award and demanded its payment. On January 16, 2007, the Farbers filed a petition for damages and statutory penalties against ANPAC in the Fourteenth Judicial District Court. Therein, the Farbers sought homologation of the umpire’s award, statutory penalties, attorney fees, and costs pursuant to La.R.S. 22:658 and/or 22:1220, damages caused by ANPAC’s breach of the duty of good faith and fair dealing, and damages associated with their having to hire an appraiser and pay the court-appointed umpire.
The Farbers filed a motion for summary judgment in July of 2007 seeking homologation of the appraisal award and an order declaring that ANPAC had violated La.R.S. 22:658 and 22:1220. ANPAC countered by filing a motion to nullify the appointment of the umpire and his decision. Following a hearing, the trial court orally granted summary judgment in favor of the Farbers, homologating the December 28, 2006 appraisal award and making it the judgment of the court. The trial court noted that the difference between the actual cash value of the award and the amount previously tendered by ANPAC amounted to $158,704.34.
The trial court denied the portion of the Farbers’ motion seeking a declaration that they were entitled to penalties and attorney fees and instead referred those issues to trial on the merits. (emphasis added)
Conversely, ANPAC’s motion to nullify the appointment of the umpire and his decision was denied. Written judgment was signed on November 17, 2007. ANPAC filed a motion to have the trial court designate the judgment as final and appealable. In addition, ANPAC sought supervisory writs in this court. Thereafter, the trial court denied ANPAC’s motion to designate. This court denied the writ, stating:
We find no abuse of discretion in the trial court’s ruling refusing to designate the subject judgment as immediately appealable…. We find that the Relator, ANPAC Louisiana Insurance Company, will have an adequate remedy through an ordinary appeal following entry of the final judgment adjudicating the remaining matters at issue in this litigation.
The matter proceeded to a jury trial on February 25 through 27, 2008. On March 18, 2008, the trial court rendered judgment on the jury verdict in favor of the Farbers and against ANPAC in the amount of $436,704.34. The judgment included an award of $158,704.34, representing the amount due under the policy, as well as compensatory damages caused by ANPAC’s breach of its obligations of good faith and fair dealing in the amount of $75,000.00. The judgment also included a bad faith penalty in the amount of $150,000 .00 and attorney fees of $53,000.00. ANPAC now appeals that judgment as well as the earlier judgment granting summary judgment in favor of the Farbers and homologating Judge Navarre’s appraisal award.
The Farbers filed an answer to the appeal claiming that the trial court erred in denying their request that they be allowed multiple penalties under La.R.S. 22:658 and/or 22:1220 based on ANPAC’s five separate and distinct violations of those statutes. ANPAC moved to strike the answer as having been untimely filed, and this court referred the motion to the merits of this appeal.
Had ANPAC settled the claim fairly in the beginning, it would have saved over a quarter of a million dollars – and that’s still a lot of money, even in this new billion-dollar-bailout world.
Holdings: The Court of Appeal, Sullivan, J., held that:
(1) Court would dismiss homeowners’ answer and strike it from the record;
(2) trial court appropriately homologated appraisal award;
(3) evidence was sufficient to support finding that insurer failed to initiate loss adjustment within 30 days after notification of hurricane damage;
(4) evidence was sufficient to support finding that insurer violated both the duty of good faith and fair dealing and the duty of adjusting claims fairly and promptly;
(5) amended version of statute applied to claim that insurer’s refusal to pay for hurricane damage was arbitrary and capricious;
(6) evidence was sufficient to support finding of bad faith and thus to support award of $75,000 in general damages; and
(7) evidence was sufficient to support award of $150,000 in punitive damages.
Affirmed.
…the judgment of the trial court in favor of the Farbers and against ANPAC in the amount of $436,704.34 is affirmed in its entirety, as is the earlier judgment granting summary judgment in favor of the Farbers and homologating the appraisal award. The Farbers’ answer to appeal is stricken. All costs of this appeal are assessed against ANPAC.
LSU’s victory, by the way, sent the Tigers to the Orange Bowl as the SEC Champion – and the moral of this post is no matter how unhappy it makes you, when faced with fact, homogulate!
Another great post turned out with lightning speed. Beware of the appraisal clause!
We circulated the Supreme’s decision immediately upon seeing the Writ Denial. If anybody knows whether or not the Eastern District is bound by an intermediate appellate decision with a writ denial, please advise.
The decision is great on several fronts, the most important being prospective application of the current version of La.R.S. 22:1892 to net the policyholder attorney’s fees. This decision should get anybody past a MSJ on the attorney’s fees issue since the decision along with the 5th Circuit’s decision in Dickerson makes clear that the date of satsifactory proof of loss, not the date of the occurrence (August 29, 2005 for Katrina claims) is the critical issue for triggering prospective application.