201 F. Supp. 78 | E.D. La. | 1962
In a prior opinion in these proceedings,
The parties have stipulated that the replacement cost of the entire building would have been $408,000, $385,000 construction costs plus $23,100 architect’s fees at 6 per cent. This figure, plus $8,724 for demolishing the portion of the building left standing and removing the debris left by the fire, is the amount the Board claims as restoration costs. The parties have further stipulated that $336,600, $306,000 construction costs plus $30,600 architect’s fees at 10 per cent, is the cost of replacing that portion of the building which was totally destroyed by fire and of repairing that portion of the building which was not destroyed by fire. This figure, less depreciation and obsolescence stipulated to be 21 per cent of the replacement cost, is the amount suggested by the insurer.
The test in determining restoration costs, insofar as they relate to the use or non-use of part of a building left standing after a fire, is what a reasonably prudent uninsured owner would do under the circumstances.
The evidence shows that of the 25 per cent of the building left standing, only the studs and frames were usable in restoration. And in using these standing parts, there would be no guarantee of the structural integrity of the restored building. The assured is not required to assume this risk.
With reference to depreciation, again the position of the insurer is without merit. The insurer insists on referring to the provisions of the Standard Fire Policy Act
What the insurer ignores in making this argument is the settled jurisprudence of this state to the effect that the Valued Policy Law,
So doing, no Louisiana case is found which allows depreciation on replacement cost of an immovable fire loss.
The Board, alleging the insurer’s failure to pay the loss on the policy, also makes a claim for attorney’s fees and statutory penalty under LSA-R.S. 22:658. The statute provides for attorney’s fees and penalty where the insurer’s failure to pay is “arbitrary, capricious, or without probable cause.” It is true that the Louisiana courts have, at times, interpreted this language loosely.
Judgment should be entered in favor of defendant for $115,002.50,
. Reliance Insurance Co. v. Orleans Parish School Board, E.D.La., 192 F.Supp. 524.
. LSA-R.S. 22:695, subd. B.
. Reliance Insurance Co. v. Orleans Parish School Board, supra, 192 F.Supp. 527.
. The value is stipulated to be ?83,667.00.
. See Vance, Handbook of the Law of Insurance, at page 771.
. See Hart v. North British & Mercantile Ins. Co., 182 La. 551, 162 So. 177; Occhipinti v. Boston Ins. Co., La.App., 72 So.2d 326; Mix v. Royal Exchange Assur. Co., La.App., 54 So.2d 355; Briede v. Commercial Union Assurance Co., 14 Orleans App. 120. Compare Lake Arthur Dredging Co. v. Mechanics’ Ins. Co., 102 La. 1090, 111 So. 466; Monteleone v. Royal Ins. Co., 47 La.Ann. 1563, 18 So. 472, 56 L.R.A. 784.
. See Occhipinti v. Boston Ins. Co., supra, 72 So.2d 332.
. Orleans Building Code, Art. 1607.
. See Hart v. North British & Mercantile Ins. Co., supra; New Orleans Real Estate M. & S. Co. v. Teutonia Ins. Co., 128 La. 45, 54 So. 466; Briede v. Commercial Union Assurance Co., supra, 14 Orleans App. 123.
. LSA-R.S. 22:691.
. LSA-R.S. 22:695.
. On two different occasions the Louisiana Supreme Court has held that the Standard Fire Policy applies solely to movables and the Valued Policy Law applies to immovables. Hart v. North British & Mercantile Co., supra; Lake Arthur Dredging Co. v. Mechanics’ Ins. Co., supra. Since those decisions the Louisiana legislature has re-enacted or amended the Standard Fire Policy Act and the Valued Policy Law no less than four times without reference to, and without changing, the judicial interpretation placed on these statutes. Act 251 of 1944; Act 540 of 1950; Act 295 of 1952; Act 125 of 1958. The Louisiana courts have apparently read these statutes correctly. See Hart v. North British & Mercantile Ins. Co., supra, 162 So. 181.
. There are many which apparently deny depreciation. Aycock v. Republic Insurance Company, La.App., 116 So.2d 317, 74 A.L.R.2d 1267; Ware v. American Druggists’ Fire Ins. Co., La.App., 38 So.2d 531. See also Tilley v. Camden Fire Ins. Ass’n, 139 La. 985, 72 So. 709, 711. Compare Brocato v. Sun Underwriters Ins. Co. of New York, 219 La. 495, 53 So.2d 246, 29 A.L.R.2d 629.
. Stenzel v. Pennsylvania Fire Ins. Co., 110 La. 1019, 35 So. 271. This case was decided in 1903. The Valued Policy Law first became effective in 1900 via Act 135 of that year. Incidentally, despite the suggestion in the court’s syllabus of this case that depreciation was a consideration in determining the amount payable under the policy, the court granted judgment in the full amount thereof. Moreover, the court’s authority for its ruling, quoted in 35 So. at p. 273, begins “Except as otherwise provided by valued policy laws, * *
. See, e. g., Thomas W. Hooley & Sons v. Zurich Gen. Acc. & L. Ins. Co., 235 La. 289, 103 So.2d 449, 67 A.L.R.2d 1078.
. See Finley v. Hardware Mutual Insurance Company, 237 La. 214, 110 So.2d 583, 587.
. Plaintiff was the 50 per cent insurer of the Board’s property. Thus the board is entitled to one-half of replacement cost plus cost of debris removal plus movables loss, less the amount already paid.
. Gettwerth v. Teutonia Ins. Co., 29 La. Ann. 30. See also Stovall v. Empire State Ins. Co., 215 La. 100, 39 So.2d 837.