Katie Realty, Ltd. v. Louisiana Citizens Property Insurance Corp.
100 So. 3d 324
| La. | 2012Background
- Hurricane Gustav damaged plaintiff's commercial property; plaintiff insured through Citizens.
- Parties settled the dispute via mediation for $250,000, including penalties and fees.
- Citizens failed to timely pay the settlement funds; plaintiff moved to enforce settlement and seek penalties.
- District Court awarded $125,000 in penalties under 22:1892(B)(1) and 22:1892(A)(1) interpretation; court of appeal affirmed.
- Louisiana Supreme Court held that a written settlement does not constitute proof of loss under 22:1892(A)(1); penalties fall under 22:1973(B)(2)/(C) with a $5,000 maximum.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does a written settlement amount constitute proof of loss under 22:1892(A)(1)? | Katie Realty argues the $250,000 settlement proves loss to the insurer. | Citizens contends settlement is not proof of loss; 22:1892(B) does not apply. | Settlement is not proof of loss; 22:1973 controls. |
| Which penalty statute governs when an insurer fails to timely pay a written settlement? | 22:1892(B) provides 50% penalties for arbitrary/capricious conduct and attorney fees. | 22:1973 governs penalties for failing to pay a settlement timely; no 50% penalty. | 22:1973 controls; penalties capped at $5,000 under 22:1973(C). |
Key Cases Cited
- Louisiana Bag, Inc. v. Audubon Indem. Co., 999 So.2d 1104 (La. 2008) (defines proof of loss and distinguishes settlement from proof of loss)
- Calogero v. Safeway Ins. Co. of Louisiana, 753 So.2d 170 (La. 2000) (penalties applying when statute preempts others; strict construction of penalties)
- Reed v. State Farm Mut. Auto. Ins. Co., 857 So.2d 1012 (La. 2003) (strict construction of penal provisions)
- Oubre v. Louisiana Citizens Fair Plan, 79 So.3d 987 (La. 2011) (statutory interpretation guiding penalties and duties)
- Durio v. Horace Mann Ins. Co., 74 So.3d 1159 (La. 2011) (proof of loss context and related damages)
- Sevier v. U.S. Fid. & Guar. Co., 497 So.2d 1380 (La. 1986) (property damage claim under homeowner policy; proof of loss concept)