Opinion
NO. 2012 CA 1428
03-22-2013
DREW ORTIS AND DIANE ORTIS v. LOUISIANA CITIZENS PROPERTY INSURANCE CORPORATION
Felix Sternfels Napoleonville, Louisiana Attorney for Plaintiffs/Appellants, Drew Otis and Diane Ortis Eric T. Haik New Iberia, Louisiana Attorney for Defendant/Appellee, Louisiana Citizens Property Insurance Corporation
NOT DESIGNATED FOR PUBLICATION
On Appeal from the
23rd Judicial District Court,
In and for the Parish of Assumption
State of Louisiana
Trial Court No. 32572
The Honorable Jessie M. LeBlanc, Judge Presiding
Felix Sternfels
Napoleonville, Louisiana
Attorney for Plaintiffs/Appellants,
Drew Otis and Diane Ortis
Eric T. Haik
New Iberia, Louisiana
Attorney for Defendant/Appellee,
Louisiana Citizens Property Insurance
Corporation
BEFORE: GUIDRY, GRAIN, AND THERIOT, JJ. CRAIN , J.
This is an appeal of a summary judgment that dismissed all claims of plaintiffs, Drew Ortis and Diane Ortis (Ortises), arising out of property damage sustained during Hurricane Gustav. The Ortises seek reinstatement of their claims for penalties and attorney fees. For the reasons that follow, we reverse, in part, and remand for further proceedings.
FACTS AND PROCEDURAL HISTORY
The Ortises owned a house in Napoleonville, Louisiana that was damaged on August 31st and September 1st of 2008 during Hurricane Gustav. They reported the claim to their homeowners insurer, Louisiana Citizens Property Insurance Corporation (Citizens). However, neither the date of the first report of loss nor the timing and extent of the initial loss adjustment are reflected in the record. The Ortises ultimately invoked an appraisal clause in their homeowners policy ("Policy") requiring the appointment of appraisers and an umpire to determine the amount of the "actual cash value or the amount of loss." The "Appraisal Clause" provides as follows:
In case the insured and this Company shall fail to agree as to the actual cash value or the amount of loss, then, on the written demand of either, each shall select a competent and disinterested appraiser and notify the other of the appraiser selected with[in] twenty days of such demand. The appraisers shall first select a competent and disinterested umpire; and failing for fifteen days to agree upon such umpire, then, on request of the insured or this Company, such umpire shall be selected by a judge of a court of record in the state in which the property covered is located. The appraisers shall then appraise the loss, stating separately actual cash value and loss to each item; and, failing to agree, shall submit their differences, only, to the umpire. An award in writing, so itemized, of any two when filed with this Company shall determine the amount of actual cash value and loss. Each appraiser shall be paid by the party selecting him and the expenses of appraisal and umpire shall be paid by the parties equally.
This "Appraisal Clause" appears on lines 123 through 140 on a single, uncaptioned page near the beginning of the Policy documents. A substantially similar provision for determining the "amount of loss" is set forth at Section E on page 14 of the "HOMEOWNERS 3 - SPECIAL FORM., which is also included in the Policy documents.
Pursuant to the appraisal clause, the Ortises and Citizens appointed Earl Carter (Carter) and Frank Taormina (Taormina), respectively, as appraisers. The record does not establish when those appointments were made. Carter and Taormina then selected an umpire on September 16, 2009 who, on June 18, 2010, was replaced by a second umpire, Retired Judge Brady Fitzsimmons. Eventually, the appraisers and umpire all agreed to values for the covered personal property. An "Appraisal Award" reflecting those values was signed by the appraisers and umpire on August 12, 2010.
With some claims still unresolved, the Ortises filed suit against Citizens on August 26, 2010. They alleged that their residence was a total loss and that Citizens had "only agreed to a partial payment of the damages resulting from the covered incident." The Ortises sought the "[b]alance of total loss damages to residence" plus "[attorney fees and penalties for arbitrary and capricious failure to pay claim in a timely manner."
In the ensuing three months, the appraisers and umpire determined values for the remaining covered property, including the actual cash value of damaged property covered under the "Dwelling" portion of the Policy, and for both tree removal and additional debris removal. The Ortises accepted the payments tendered pursuant to those determinations.
On February 23, 2012, Citizens filed a Motion and Order for Summary Judgment (Motion) seeking dismissal of the case "in its entirety due to there being a binding Umpire Appraisal Award" and arguing that there were no genuine issues of material fact that no "statutory grounds for vacating, modifying, or correcting an arbitration award have been established." In support of the Motion, Citizens submitted an uncertified copy of the Policy, letters reflecting the selection of the umpires by the appraisers, and the value determinations by the appraisers/umpire for the personal property, tree removal, dwelling coverage and debris removal, the Petition for Damages, and an affidavit signed by Taormina. The Motion and supporting memorandum did not mention the claim for penalties and attorney fees. The Ortises filed no memorandum or exhibits in opposition to the Motion.
In their brief filed with this court, the Ortises reference the "Affidavit of Drew Ortis and Affidavit of Diane Ortis"; however, no such affidavits appear in the record.
The Motion was set for hearing on April 2, 2012, then continued on motion of the Ortises until June 4, 2012. The hearing was held on June 4, 2012. The Motion was granted and a judgment was signed "dismissing the above-captioned case in its entirety , with prejudice" and at plaintiffs' cost. (Emphasis added.) The Ortises timely appealed, challenging the dismissal of their claim for penalties and attorney fees.
LAW AND ANALYSIS
A motion for summary judgment is a procedural device used to avoid a full-scale trial when there is no genuine issue of material fact. All Crane Rental of Georgia, Inc. v. Vincent, 10-0116 (La. App. 1 Cir. 9/10/10), 47 So. 3d 1024, 1027, writ denied, 10-2227 (La. 11/19/10), 49 So. 3d 387. Summary judgment is properly granted if the pleadings, depositions, answers to interrogatories, and admissions, together with affidavits, if any, show that there is no genuine issue of material fact and that the mover is entitled to judgment as a matter of law. La. Code Civ. Pro. art. 966B(2). Summary judgment is favored and designed to secure the just, speedy, and inexpensive determination of every action. La. Code Civ. Pro. art. 966A(2). Appellate courts review evidence de novo under the same criteria that govern the trial court's determination of whether a summary judgment is appropriate. All Crane, 47 So. 3d at 1027.
On a motion for summary judgment, the burden of proof is on the mover. La. Code Civ. Pro. art. 966C(2). If, however, the mover will not bear the burden of proof at trial on the matter that is before the court on the motion, the mover's burden does not require that all essential elements of the adverse party's claim, action, or defense be negated. Instead, the mover must point out to the court that there is an absence of factual support for one or more elements essential to the adverse party's claim, action, or defense. Thereafter, the adverse party must produce factual evidence sufficient to establish that he will be able to satisfy his evidentiary burden of proof at trial. If the adverse party fails to meet this burden, there is no genuine issue of material fact, and the mover is entitled to summary judgment as a matter of law. La. Code Civ. Pro. art. 966C(2); All Crane, 47 So. 3d at 1027.
The Ortises' petition asserted claims for penalties and attorney fees. Paragraphs VI and VII of the Petition provide:
VI.
The Defendant breeched (sic)the terms of its contract with Petitioners, entitling Petitioners to damages representing recovery of the balance of their loss together with attorney fees and costs for the Defendant's arbitrary and capricious refusal to honor payment of the claim.
VII.
Petitioners are entitled to recover the following damages from the Defendant:
1. Balance of total loss damages to residence based on replacement costs;
2. Attorney fees and penalties for arbitrary and capricious failure to pay claim in a timely manner;
3. Such other damages to which Petitioners are legally entitled to recover.
The evidence submitted with the Motion and argued in Citizens' memorandum related solely to the appraisal process and the value determinations derived through that process. Citizens argues that the Ortises should not be allowed to "contest the binding arbitration award" in accordance with Louisiana Revised Statutes 9:4210 - 4213. However, the Ortises do not contest, nor do they otherwise seek to modify, the valuations determined by the appraisal process. Rather, they seek "[a]ttorney fees and penalties for arbitrary and capricious failure to pay claims in a timely manner."
It is unnecessary for the resolution of this case that we address the distinction between arbitration and appraisal. We do note, however, that at least one appellate court has recognized a distinction. See, Girard v. Atlantic Mutual Insurance Company, 198 So. 2d 444 (La. App. 4 Cir. 1967).
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Louisiana Revised Statutes 22:1892 and 22:1973 impose statutory duties upon insurers and set forth penalties for the breach of those duties. These obligations include an obligation to "pay the amount of any claim due any insured within thirty days after receipt of satisfactory proofs of loss" under Section 1892, and a similar duty under Section 1973 to pay any claim due an insured "within 60 days after receipt of satisfactory proof of loss." Section 1892A(3) also imposes an obligation on the insurer to commence loss adjustment of property damage claims within 14 days of the notification of the loss, except in the event of a catastrophic loss, in which event the loss adjustment must commence within 30 days, subject to various extensions if the event is declared to be an emergency or disaster. These statutes provide for penalties against an insurer, including where the failure to pay a claim after receiving satisfactory proof of loss is arbitrary, capricious or without probable cause. Section 1892 also authorizes an award of attorney fees. La. R.S. 22:1973A and C; La. R.S. 22:1892B(1); Sher v. Lafayette Ins. Co., 07-2441 (La. 4/8/08), 988 So. 2d 186, 206.
The appraisal clause in the Policy makes no mention of the appraisers being authorized to establish the value of a claim for attorney fees and penalties. It creates a process for determining the "actual cash value or the amount of loss" under the Policy. After appointment and selection of an umpire, the "appraisers shall then appraise the loss, stating separately actual cash value and loss to each item." In the event of a disagreement, the matter is submitted to the umpire, who along with at least one of the appraisers can determine the "actual cash value and loss." The provision's language cannot reasonably be interpreted to place responsibility upon the appraisers and umpire to determine whether Citizens breached a statutory duty to its insured required by Louisiana Revised Statutes 22:1892 and 22:1973, or in the event of such a breach, to determine the amount of the penalties or attorney fees.
Under Article 966C(2), Citizens had the burden of presenting a prima facie case showing "an absence of factual support for one or more elements essential to" the Ortises' claim for penalties and attorney fees. That burden, at a minimum, required some evidence of the timing of the initial proof of loss and Citizen's adjustment of that loss, as Sections 1892 and 1973 impose obligations upon an insurer to undertake certain actions in a timely manner upon receipt of satisfactory proof of a loss. The affidavit of Citizen's appointed appraiser, Taormina, only addresses what happened "as a result of [the Ortises] invoking the appraisal process." In the absence of any evidence concerning the initial notice of loss and proof of loss and the action taken by Citizens in response thereto, there is no basis for determining whether there is an absence of factual support for the Ortises' claim for penalties and attorney fees.
In Richardson v. GEICO Indemnity Co., 10-0208, (La. App. 1 Cir. 9/10/10), 48 So. 3d 307, writ denied, 10-2473 (La. 12/17/10), 51 So. 3d 7, GEICO Indemnity Company (GEICO) filed a motion for summary judgment seeking dismissal of the plaintiff's claims for penalties and attorney fees. The motion was supported by an affidavit of the claims examiner and various exhibits concerning an unconditional tender of uninsured motorist benefits made by GEICO. The plaintiff filed no affidavits or memorandum in opposition to the motion. The trial court granted the motion. On appeal this court determined that the evidence submitted by GEICO failed to point out an absence of factual support that GEICO arbitrarily, capriciously and without probable cause failed to make an unconditional tender in a timely manner. This court observed:
[T]he law is well settled that the record as a whole must show that all critical elements of the opposing party's case have been put to rest, regardless of whether the opposing party filed counter affidavits. This is because the burden of proof is on the mover to present a prima facie case; the opponent has nothing to prove in response to the motion if a prima facie case is not made.Richardson , 48 So. 3d at 312. See also, Hat's Equipment, Inc. v. WHM, L.L.C., 11-1982 (La. App. 1 Cir. 5/4/12), 92 So. 3d 1072, 1076; Estain v. U.S. Dept. of Transp. and Development, 01-0554 (La. App. 1 Cir. 5/10/02), 819 So. 2d 375, 378.
Although the record contains no counter-affidavits or other evidence filed by the Ortises in opposition to the Motion, the Ortises have "nothing to prove in response to the motion if a prima facie case is not made." Richardson, 48 So. 3d at 312; Estain, 819 So. 2d at 378. The record must establish that "all critical elements of the opposing party's case have been put to rest, regardless of whether the opposing party filed counter affidavits." Richardson, 48 So. 3d at 312; Estain, 819 So. 2d at 378.
The Motion, memoranda and the arguments of counsel reflect that the focus of the Motion was on the value of the covered property and the finality of the appraisals. The timely reporting and adjustment of the loss was not addressed. Citizens failed to satisfy its burden of pointing out an absence of factual support for the Ortises' claim for penalties and attorney fees. Consequently, the burden of proof for the penalty and attorney fee claims never shifted to the Ortises, and the trial court erred in dismissing those claims. See, Richardson v. Geico Indemnity Co., 10-0208, (La. App. 1 Cir. 9/10/10), 48 So. 3d 307, writ denied, 10-2473 (La. 12/17/10), 51 So. 3d 7; Yokum v. 615 Bourbon Street, L.L.C., 07-1785 (La. 2/26/08), 977 So.2d 859, 878-79; Hat's Equipment, Inc., 92 So. 3d at 1076.
CONCLUSION
For the foregoing reasons, we reverse that portion of the summary judgment that dismissed plaintiffs' claims for penalties and attorney's fees and remand the case to the trial court for further proceedings. Costs of this appeal are assessed to Louisiana Citizens Property Insurance Company.
REVERSED IN PART, AND REMANDED.