JAVIER ORELLANA Vs. LOUISIANA CITIZENS PROPERTY INSURANCE CORPORATION
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JAVIER ORELLANA * NO. 2007-CA-1095 VERSUS * COURT OF APPEAL LOUISIANA CITIZENS PROPERTY INSURANCE CORPORATION * FOURTH CIRCUIT * STATE OF LOUISIANA * * ******* LOVE, J., CONCURS IN PART AND DISSENTS IN PART AND ASSIGNS REASONS I respectfully dissent in that I do not find that general damages were properly awarded. I concur with the majority that Louisiana Citizens Property Insurance Corporation (LCPIC) is not immune from penalties and its actions are compensable as such pursuant to La. R.S. 22:1220. I find the majority’s reliance on Blache v. Jones, 521 So. 2d 530 (La. App. 4th Cir. 1988), distinguishable and inapplicable to the case sub judice. Blache addresses mental anguish claims available from delictual based actions on property damage as opposed to damages regarding contractual matters. “Laws on the same subject matter must be interpreted in reference to each other.” La. C.C. art. 13. nonpecuniary losses. Two laws in Louisiana pertain to damages for The Louisiana Insurance Code section on unfair trade practices contains La. R.S. 22:1220, which provides that “[a]ny insurer who breaches these duties shall be liable for any damages sustained as a result of the breach.” La. R.S. 22:1220. Further, the statute affords that an insurer who breaches his duty to an insured is required to pay “any general or special damages to which a claimant is entitled.” La. R.S. 22:1220. In conjunction, the Louisiana Civil Code’s section on conventional obligations or contracts contains a specific provision regarding the award of damages for nonpecuniary losses resulting from a 1 breach of contract. If the contract breached is not “intended to gratify a nonpecuniary interest,” damages for nonpecuniary losses “may be recovered . . . when the obligor intended, through his failure, to aggrieve the feelings of the obligee.” La. C.C. art. 1998. An insurance policy is a contract. La. C.C. art. 1906. The object of an insurance contract is the payment of money. Dixon v. First Premium Ins. Group, 05-0988, p. 16 (La. App. 1 Cir. 3/29/06), 934 So. 2d 134, 146. While La. R.S. 22:1220 permits the award of special damages, La. C.C. art. 1998 specifically limits remuneration to nonpecuniary losses resulting from contracts for nonpecuniary interests. The majority opinion addresses Mr. Orellana alleged damages, but lacks evidence of the LCPIC’s actions that would demonstrate the intent to intentionally aggrieve Mr. Orellana, as required by La. C.C. art. 1998. La. R.S. 22:1220 permits the award of penalties “assessed against the insurer in an amount not to exceed two times the damages sustained or five thousand dollars, whichever is greater.” La. R.S. 22:1220. La. R.S. 22:1430.5 provides the LCPIC with partial immunity from liability. However, the statute does not specifically protect the LCPIC from an assessment of penalties. The legislature demonstrated a direct intent to exclude the Insurance Guaranty Association Fund (“IGAF”) from liability for general and special damages. See La. R.S. 22:1220. While La. R.S. 22:1430.5 grants immunity to the Louisiana Insurance Rating Commission, its staff, the LCPIC’s governing board, etc., the statute does not grant immunity from penalties directly to the LCPIC or the Louisiana Citizens Fair Plan or express the legislature’s intent to do so. I find that the LCPIC failed to tender any amount to Mr. Orellana more than sixteen months after he reported the wind and rain damage claim from Hurricane Katrina. The LCPIC sent two adjusters to estimate Mr. Orellana’s damages sixteen months apart with estimates at $48,181.84 and $80,594.41 respectively. 2 Mr. Orellana’s adjuster estimated his damages at $103,635.51 almost a year after Hurricane Katrina. Accordingly, $48,181.84 of damage to Mr. Orellana’s home was undisputed. Also, the LCPIC never denied Mr. Orellana’s policy covered the alleged damages and Mr. Orellana repeatedly requested payment. The LCPIC could not provide an explanation as to why Mr. Orellana claim was not addressed properly. I find that the trial court was correct in its factual finding that the LCPIC acted arbitrary and capricious as required for a penalty award. Therefore, pursuant to the de novo standard of review used for reviewing questions of law, like the awarding of penalties as per La. R.S. 22:1220, I would award $175,000 in penalties. 3
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