Katie Realty, Ltd. v. Louisiana Citizens Property Ins. Corp.

The issue on appeal before the Supreme Court in this case concerned whether a written settlement agreement compromising a contested property insurance claim constituted a "proof of loss" under La. Rev. Stat. 22:1892(A)(1) sufficient to trigger the penalties set forth in La. Rev. Stat. 22:1892(B) for the insurer's arbitrary and capricious failure to timely pay the settlement funds. Plaintiff, Katie Realty, Ltd., filed suit against defendant, Louisiana Citizens Property Insurance Corporation (Citizens), for its untimely handling of plaintiff's Hurricane Gustav property damage claim. The matter was settled through mediation. When Citizens failed to timely pay the settlement funds, plaintiff filed a motion to enforce settlement and assess penalties pursuant to La. Rev. Stat. 22:1892 and 1973. In accordance with La. Rev. Stat. 22:1892(B)(1), the District Court awarded plaintiff $125,000 in penalties. The court of appeal affirmed, finding the settlement agreement constituted sufficient "proof of loss" under the provisions of La. Rev. Stat. 22:1892(A)(1) and Citizens' misconduct warranted the imposition of penalties under La. Rev. Stat. 22:1892(B)(1). Upon review, the Supreme Court concluded that the written settlement agreement did not constitute satisfactory proof of loss under the provisions of La. Rev. Stat. 22:1892(A)(1) sufficient to trigger the penalties set forth in La. Rev. Stat. 22:1892(B)(1). Accordingly, the Court reversed the judgment of the court of appeal and rendered judgment awarding plaintiff $5,000 in statutory penalties for Citizens' failure to timely pay the settlement funds in accordance with the provisions of La. Rev. Stat. 22:1973(B)(2) and (C). View "Katie Realty, Ltd. v. Louisiana Citizens Property Ins. Corp." on Justia Law