Lee Allen HAYNES, D/B/A Lee Allen‘s Fashions For Men v. STANDARD FIRE INSURANCE COMPANY.
No. 12470.
Court of Appeal of Louisiana, First Circuit.
March 5, 1979.
370 So. 2d 118
Paul Marks, Jr., Baton Rouge, for defendant-appellee Standard Fire Ins. Co.
Dan E. West, Baton Rouge, for intervenor-appellee Genesco, Inc.
Peter T. Dazzio, Baton Rouge, for intervenor-appellee Finleigh Clothes & Congress Fact Corp.
Before ELLIS, CHIASSON and SARTAIN, JJ.
CHIASSON, Judge.
On October 13, 1976, a fire occurred at Lee Allen‘s Fashions for Men, located on Florida Boulevard in Baton Rouge, Louisiana. Plaintiff-appellant, Lee Allen Haynes d/b/a Lee Allen‘s Fashions for Men (Haynes), had a multi-peril insurance policy covering his store. The policy provided personal property coverage in the primary amount of $85,000.00 with a peak season endorsement in the amount of $15,000.00 and a gross earnings coverage in the amount of $60,000.00. On October 29, 1976, the appellant filed a proof of loss with the appellee. On December 20, 1976, appellant made demand for payment from the appellee. On December 29, 1976, appellant filed suit for breach of contract, seeking the full amount of coverage provided by the policy and statutory penalties, interest and attorney‘s fees as provided in
The appellant lists the following specifications of error:
1. The trial court erred in not finding that the $25,000.00 tender by the insurer to the insured was a conditional tender and not awarding penalty, interest and attorney‘s fees thereon.
2. The trial court erred in not awarding penalty, interest and attorney‘s fees on the insurer‘s “admitted liability” of $107,000.00.
3. The trial court erred in not allowing interest from the date of judicial demand.
4. The trial court erred in limiting the attorney‘s fees to $5,000.00.
5. The trial court erred in not allowing the insured to recover under the gross earnings coverage of the subject policy.
As to the second and fifth specification of error, appellant argued that at the minimum the penalty provided for in
The insurance policy provided personal property coverage in the amount of $85,000.00, with a peak season endorsement thereon in the amount of $15,000.00, and also provided for gross earnings coverage in the amount of $60,000.00. The insurer had deposited $107,000.00 in the registry of the court, which breaks down as follows:
| $ 85,000.00 | personal property coverage |
| 15,000.00 | peak season endorsement coverage |
| 7,000.00 | gross earnings endorsement coverage |
| $107,000.00 | total amount deposited in the court registry. |
Appellant argued he is entitled to the full coverage provided by the policy. We disagree. We find that appellant has received the proper amount of loss. As to any further amounts that might be obtained under the gross earnings endorsement coverage, we agree with the trial court‘s findings and conclusions as to this issue, as follows:
“. . . Under the gross earnings endorsement of the policy, the defendant never received satisfactory proof of loss, so far as these earnings are concerned, and the plaintiff has failed to establish by a preponderance of evidence that he suffered any loss that would not be adequately covered by the seven thousand dollars that has already been paid by the insurance company to him.”
We have reviewed the record and find there is a reasonable factual basis for the finding of the trial court and that the record establishes that this finding is not clearly wrong.
We find that the total amount of loss owed to appellant was $107,000.00 under the subject policy. We will discuss the computation of interest hereinafter. This disposes of appellant‘s second and fifth specification of error.
Having determined the total amount of loss due to appellant, the remaining specifications relating to penalty, interest and attorney‘s fees can now be addressed.
As to specification of error number one,
“All insurers issuing any type of contract other than those specified in R.S. 22:656 and 22:657 shall pay the amount of any claim due any insured including any employee under Chapter 10 of Title 23 of the Revised Statutes of 1950 within sixty days after receipt of satisfactory proofs of loss from the insured, employee or any party in interest. Failure to make such payment within sixty days after receipt of such proofs and demand therefor, 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 12% damages on the total amount of the loss, payable to the insured, or to any of said employees, together with all reasonable attorney‘s fees for the prosecution and collection of such loss, or in the event a partial payment or tender has been made, 12% of the difference between the amount paid or tendered and the amount found to be due and all reasonable attorney‘s fees for the prosecution and collection of such amount. Provided, that all losses on policies covering automobiles, trucks, motor propelled vehicles and other property against fire and
theft, the amount of the penalty in each of the above cases shall be 25% and all reasonable attorney‘s fees.” (Emphasis supplied)
On December 30, 1976, the appellee by letter sent a draft in the amount of $25,000.00 to appellant‘s attorney. The draft was made payable to the order of the following:
Lee Allen‘s Fashions for Men George M. Pierson (attorney for the appellant)
Capital Bank & Trust Co. Genesco, Inc. Fin Leigh Clothes
Appellant admits that Capital Bank and Genesco had perfected their claim under
The record reveals that this payment was tendered after suit was filed and appellant‘s allegations about Fin Leigh Clothes are correct. There was no showing or evidence introduced demonstrating a basis on which the check was also made payable to Fin Leigh Clothes. There is no evidence as to compliance by Fin Leigh Clothes with the provisions of
We believe that the tender made to appellant was not an absolute and unconditional tender by virtue of the fact that a named payee on the draft was not shown to have an interest in the draft. Therefore, we find that appellee made the draft conditional and appellant is under no obligation to accept such a tender. For these reasons, we reverse the trial court‘s finding that the insurer is not subject to a penalty on the $25,000.00. We find that under
As to specification of error number four, we find that the amount awarded as attorney‘s fees to be adequate and find no abuse of the trial court‘s discretion in making this award. We do however feel that the preparation and argument of this case on appeal required additional time and labor for which appellant‘s attorney was evidently not compensated in the lower court judgment. We will allow an additional $1,500.00 in attorney‘s fees. Witherwax v. Zurich Insurance Company, 315 So.2d 420 (La.App. 3rd Cir. 1975).
As to specification of error number three, the trial court made the following award:
“I. There be judgment rendered herein in favor of the plaintiff, Lee Allen Haynes, d/b/a Lee Allen‘s Fashions for Men, and against the defendant, Standard Fire Insurance Company, for penalty, interest and attorney fees, pursuant to
LSA-R.S. 22:658 , from August 1, 1977, in the amount of $9,000.00 for penalty and interest and $5,000.00 for attorney fees, until paid, and for all costs of these proceedings;”
In oral reasons for judgment the trial court found that sometime in July of 1977 the insurer had enough information to determine an amount of money owed to appellant under the policy; the insurers should have submitted a tender to appellant within sixty days of this determination; and the insurer did not submit a figure for appellant to consider until six months later, January of 1978. On this basis the trial court found the appellee to have been arbitrary and capricious as provided in
Appellant argued that he is entitled to interest from the date of judicial demand. Appellant also argued that two errors were made in the trial judge‘s oral reasons for judgment: the first, being May of 1977 instead of July of 1977 as the date the insurer had the information needed to determine the amount due under the policy; the second, tender was finally made to appellant in November of 1977 by depositing in the registry of the court $107,000.00 and not a tender made in January of 1978.
Appellee argued that the trial court awarded penalties from the time it felt the insurer had sufficient information up to the time that the $107,000.00 was deposited into the registry of the court.
Since the trial court‘s judgment is unclear as to certain portions of this issue, we will take this specification of error in steps.
First, we find that the trial court was correct in its finding that after the sixty days from the proof of loss submitted, the insurance company was justified, initially, in not paying the appellant. We find the following facts to support this conclusion: the ongoing arson investigation and the documentation provided by appellant with his proof of loss, particularly in regard to the gross earnings coverage. However, after a point, the appellee was arbitrary and capricious in refusing to offer payment to the appellant.
Secondly, we find two errors involving dates in the trial court‘s oral reasons for judgment. We find that these errors were made by mistake or typographical error. The trial court found that as of July of 1977 the insurance company had all of the information it could obtain to determine the amount of loss and therefore by August of 1977, the insurer should have made some attempt at submitting an amount for appellant‘s consideration. The record reveals that by the end of May of 1977, the insurance company had all of the information necessary for the proof of loss. Therefore, the sixty days as specified in
Having made these corrections, we will commence the running of interest due from August 1, 1977.
Thirdly, we cannot determine from the trial court‘s judgment (1) on what amount he calculated the penalty, and (2) what he meant by awarding $9,000.00 for penalty and interest. Since we have all of the facts before us to determine the proper award, we will do so:
- $107,000.00 is the amount of loss on which the 12% penalty should be calculated [the penalty being $12,840.00].
- Appellant owes legal interest on the total of the following amounts from August 1, 1977, through November 7, 1977:
| $107,000.00 | total amount of loss |
| 12,840.00 | 12% penalty |
| 5,000.00 | attorney‘s fees |
| $124,840.00 |
We stop the legal interest running on the figure of $124,840.00 on November 7, 1977 since by depositing the money in the registry of the court, the appellee has made it available to the appellant.
- Beginning with November 8, 1977, and continuing until it is paid, legal interest is owed on the total of the following amounts:
| $12,840.00 | 12% penalty |
| 5,000.00 | attorney‘s fees |
| $17,840.00 |
- Interest on our award of $1,500.00 attorney‘s fees, begins to run as of the date of this decision.
- The trial court‘s award of court costs is affirmed.
As specified above, the judgment of the trial court is affirmed in part, reversed in part, and amended in part. Costs of this appeal are to be paid by the appellee.
AFFIRMED IN PART, REVERSED IN PART, AND AMENDED IN PART.