Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca5-13-31313/USCOURTS-ca5-13-31313-0/pdf.json

Parties Involved:
ANCO Insulations, Incorporated
Appellant
American Guarantee & Liability Insurance Company
Appellant
National Union Fire Insurance Company of Pittsburgh, Pennsylvania
Appellee
Royal Indemnity Company
Appellant
Zurich American Insurance Company
Appellant

Document Text:

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 13-31313

ANCO INSULATIONS, INCORPORATED, a Louisiana Corporation, 

 Plaintiff - Appellant

v.

NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, 

PENNSYLVANIA,

 Defendant - Cross Defendant - Appellee

ROYAL INDEMNITY COMPANY, a Delaware Corporation; ZURICH 

AMERICAN INSURANCE COMPANY; AMERICAN GUARANTEE; 

LIABILITY INSURANCE COMPANY, 

 Cross Claimants - Appellants

Appeal from the United States District Court 

for the Middle District of Louisiana

USDC No. 3:07-CV-657

Before DAVIS, WIENER, and HAYNES, Circuit Judges.

PER CURIAM:*

* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not 

be published and is not precedent except under the limited circumstances set forth in 5TH 

CIR. R. 47.5.4.

United States Court of Appeals

Fifth Circuit

FILED

February 25, 2015

Lyle W. Cayce

Clerk

 

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In this insurance coverage dispute, the district court granted a motion 

for partial summary judgment to Defendant-Appellee National Union Fire 

Company of Pittsburgh, Pennsylvania (“National Union”). The court reasoned 

that, because Plaintiff-Appellant Anco Insulations, Incorporated (“Anco”) had 

failed to tender claims timely under the terms of its insurance policy, National 

Union was not obligated to reimburse Anco for any legal costs that it incurred 

in defending the untimely tendered lawsuits. The district court also granted 

National Union’s motion for partial summary judgment on Anco’s claim for 

statutory penalties under La.R.S. §§ 22:1973, 22:1892. We affirm.

I. FACTS & PROCEEDINGS

A. Factual background

From approximately 1972 through the early 1980s, Anco sold, installed, 

repaired, and distributed insulation materials that contained asbestos. As a 

result, Anco was named a defendant in approximately 2,700 asbestos-related 

lawsuits filed in Louisiana, Texas, and Mississippi. In 1987, National Union 

issued a primary general liability insurance policy to Anco (“the Policy”), for 

the policy period January 1, 1987 to January 1, 1988. The Policy did not 

contain an asbestos exclusion. 

The following factual background is contested; we summarize it only to 

provide the context of Anco’s claim that the district court erred in granting 

National Union’s motions for partial summary judgment. We begin with 

Anco’s allegation that, at “some point” during the late 1980s, National Union 

told Anco’s corporate representative, Mr. Bourgeois, that Anco had no asbestos 

coverage. In March of 2000, Robert Kuehn, a manager at the AIG Toxic Tort 

Claims department,1 requested permission from Anco’s counsel, Thomas 

Balhoff, to visit Zurich’s offices and review its files on Anco’s asbestos claims. 

1 National Union is a member company of AIG. 

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Mr. Balhoff granted permission on behalf of Anco. In that same year, Anco 

tendered two asbestos lawsuits to National Union for defense by the insurer,

as evidenced by the insurer’s two letters acknowledging the claims. The claims 

were tendered under other policies, however, not under the Policy.2

In August 2000, Mr. Spadacenta, a National Union representative, 

allegedly advised Mr. Nilson, a Zurich claims handler, that Anco had not 

reported the asbestos bodily injury claims under its primary policies.3 In 

January 2001, Anco’s counsel wrote to Greg Mayer of AIG Toxic Tort Claims, 

a part of National Union Insurance Company, advising National Union of the 

pending asbestos litigation and putting National Union on notice that it had 

issued excess coverage to Anco under a different policy.

B. District court proceedings

In September 2007, Anco filed a complaint seeking a declaratory 

judgment against several of its excess liability insurers. National Union was 

not named as a defendant in that initial complaint. During the course of 

discovery, Anco became aware of the existence of the Policy and of the fact that 

it did not contain an asbestos exclusion. On April 23, 2009, Anco forwarded all 

suits to National Union that had been served on Anco and tendered them to 

National Union under the Policy. In May 2009, Anco added National Union as 

a party-defendant to its pending declaratory judgment action against its excess 

insurers. In January 2010, Anco began forwarding all lawsuits that were or 

had been served on it to National Union. In February 2010, Anco filed its third 

amended complaint to add a claim against National Union for statutory 

2 Per National Union’s internal operating procedure, the insured is required to specify 

the policy under which it is seeking coverage when tendering a claim, otherwise it is “kickedback.”

3 Mr. Spadacenta denied knowledge of having had this conversation with Mr. Nilson. 

He claimed that the letter must have referred to the two policies that were noticed to National 

Union in the Mason and Valdes lawsuits, both of which contained asbestos exclusions. 

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penalties under La.R.S. §§ 22:1892, 22:1973, asserting that National Union 

had failed to participate timely in Anco’s defense of the underlying lawsuits. 

In December 2011, National Union filed a motion for partial summary 

judgment, contending that it was not liable for any of Anco’s defense costs in 

the underlying asbestos lawsuits; or, alternatively, that National Union was 

not obligated to reimburse Anco or any of its other primary insurers for legal 

fees or costs incurred prior to April 23, 2009 – the date on which Anco first

forwarded its asbestos lawsuits to National Union. Several months later, in 

April 2012, National Union filed a motion for partial summary judgment on 

Anco’s claim for statutory penalties, asserting that (1) National Union had 

assumed its share of defense costs following Anco’s tender of the lawsuits in 

2009; and (2) Anco had not suffered any loss that would entitle it to statutory 

penalties. 

In February 2013, the district court granted National Union’s first-filed 

motion for partial summary judgment, concluding that the record established 

that Anco first tendered its claims under the Policy on April 23, 2009. Relying 

on that date as the first tender of claims, the court ruled that Anco’s failure to 

tender defense of the lawsuits to National Union timely constituted a breach 

of the Policy’s requirement that Anco “immediately” forward any lawsuits to 

National Union. The district court therefore held that National Union was not 

obligated to reimburse Anco for any legal fees and costs it incurred in or after 

1987 in the defense of approximately 2,700 asbestos lawsuits filed between 

1987 and 2008.

The district court also granted National Union’s motion for partial 

summary judgment on Anco’s request for statutory penalties. The court 

reasoned that, as Anco had not shown that it suffered any loss from National 

Union’s failure to participate in the defense, it could not recover penalties

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under Section 22:1892 for the lawsuits filed after April 23, 2009.4 The court 

also ruled in favor of National Union on Anco’s request for statutory penalties 

under Section 22:1973(A), concluding that National Union’s alleged failure to 

participate in Anco’s defense is not one of the six enumerated claimssettlement practices that would constitute a violation of that statute. 

Anco, along with Cross-Claimants-Appellants Royal Indemnity 

Company, Zurich American Insurance Company, and American Guarantee & 

Liability Insurance Company, timely appealed both rulings.5 On appeal, Anco 

contends that the district court erred (1) in holding that National Union is not 

obligated to reimburse Anco for costs it incurred in defending lawsuits filed 

between 1987 and 2008, because, Anco insists, a genuine dispute of material 

fact exists as to the date that Anco first tendered the claims; and, (2) in denying

Anco’s request for Section 22:1892 penalties because, according to Anco, that 

statute does not require it to show that it sustained losses to recover such 

penalties.

II. ANALYSIS

A. Standard of review

We review a district court’s summary judgment de novo, applying the 

same standards as the district court. We apply state substantive law when we 

interpret an insurance policy, and we review the district court’s conclusions on 

state law de novo.6 Under Louisiana law, an insurance policy is a contract that 

must be construed using the general rules of contract interpretation set forth 

in the Civil Code; the court’s role is to determine the common intent of the 

4 The district court dismissed as moot Anco’s claim for statutory penalties relating to 

lawsuits filed before April 23, 2009, because Anco had breached the Policy by failing to tender

those lawsuits timely to National Union.

5 Cross-Claimant-Appellant Royal Indemnity does not join Anco’s appeal of the district 

court’s ruling on Anco’s bad faith claims.

6 Lamar Adver. Co. v. Cont’l Cas. Co., 396 F.3d 654, 659 (5th Cir. 2005).

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parties.7 An insurance policy may limit an insurer’s liability and impose and 

enforce a reasonable condition on the policy obligations that the insurer 

contractually assumes unless doing so conflicts with state law or public policy.8 

When interpreting Louisiana law, we are bound by this court’s prior 

interpretation, so long as it has not been superseded by Louisiana case law or 

statute.9

B. Partial summary judgment on duty to reimburse Anco for legal 

fees and costs

As noted, National Union filed a motion for partial summary judgment

that it was not obligated to assume any of Anco’s defense costs in the 

underlying asbestos lawsuits; or, alternatively, that it was not obligated to 

reimburse Anco or its other primary insurers for any legal fees or costs 

incurred prior to April 23, 2009 – the date on which Anco first forwarded its 

asbestos lawsuits to National Union. The district court granted National 

Union’s motion, and Anco appeals that summary judgment on the following 

grounds: (1) A genuine dispute of material fact exists as to the date that Anco 

first tendered claims under the Policy; (2) even if Anco’s tender of the claims 

was untimely, the district court erred in not excusing Anco’s tardiness; and, (3) 

the court erred in concluding that Anco’s failure to tender claims timely under 

the terms of the Policy relieved National Union of its defense obligations 

because National Union did not claim that it was prejudiced by Anco’s late 

tender.

7 Cadwallader v. Allsate Ins. Co., 848 So.2d 577, 580 (La. 2003).

8 Henry v. S. La. Sugars Coop., Inc., 957 So.2d 1275, 1277 (La. 2007) (internal 

quotation marks omitted).

9 Lamar, 396 F.3d at 663 n.8.

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1. Anco’s April 23, 2009 tender of the underlying lawsuits 

The district court found that Anco first tendered the underlying lawsuits 

to National Union on April 23, 2009 – a finding supported by Anco’s responses 

to interrogatories.10 Anco disputes this determination, claiming that the 

district court improperly weighed the evidence and made credibility 

determinations.

Anco asserts that the following evidence creates a genuine dispute of 

material fact as to the date that Anco first tendered the underlying claims to 

National Union: (1) the testimony of Anco’s corporate representative, Mr. 

Bourgeois, that Anco’s corporate practice was to forward all lawsuits to 

National Union; (2) the reference to prior asbestos “claims” in a letter dated 

August 2000, from Mr. Spadacenta, a claims adjuster for National Union, 

acknowledging a tender of an asbestos claim; (3) Mr. Spadacenta’s letter dated 

May 2000, acknowledging an asbestos-claim lawsuit that referred to “various 

policies” and his letter dated August 2000 referring to the “above policies;” (4) 

AIG Representative Robert Kuehn’s letter dated March 2000 requesting 

permission to review Zurich’s files on Anco’s asbestos claims, constituting 

evidence that National Union had received tenders of asbestos lawsuits; and, 

(5) Anco’s counsel’s letter dated September 2000, apprising the AIG Toxic Tort 

Claims Unit of the asbestos cases pending against Anco, as well as two followup letters respectively dated January 24 and 25, 2001.

We are satisfied that the district court did not err in rejecting this 

evidence. First, although Mr. Bourgeois testified that it was Anco’s “practice” 

to forward lawsuits to National Union as they were received, this testimony, 

10 Anco stated that it had provided National Union with two DVDs containing 

approximately 2700 asbestos-related petitions on April 23, 2009 (“In April of 2009, copies of 

all suits that have been served upon Anco as of that point in time were provided to counsel 

for National Union on 2 DVDs”).

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without any supporting documents or corroboration, is not sufficient to create 

a genuine dispute of material fact. Second, evidence that Mr. Spadacenta

referred to prior asbestos “claims” in his letter acknowledging Anco’s tender of 

an asbestos suit, or reference to “various policies” in another letter 

acknowledging the tender of an asbestos claim, is not relevant to the question 

whether Anco timely tendered its claims under the Policy. Third, Robert 

Kuehn’s letter of March 2000, in which he sought permission to review Zurich’s 

files on Anco’s asbestos claims, does not refer to the Policy and is irrelevant to 

the date of tender. The final items of evidence cited by Anco – its counsel’s 

letter of September 18, 2000 and follow-up letters of January 24 and 25, 2001

– would present a dispute of material fact if they were tendered under the 

Policy; however, those letters refer to Policy No. 9601699, not to the Policy. We 

conclude that the district court properly deduced that Anco first tendered the 

lawsuits on April 23, 2009.

2. Excusal of untimely tender

The district court also rejected Anco’s alternative argument that its 

untimely tender should be excused because National Union breached its duty 

to investigate the claims. The court determined that Anco failed to point the 

court to specific evidence that National Union made false representations 

about Anco’s coverage or about the asbestos exclusion in the Policy. On appeal, 

Anco asserts that if we affirm the district court’s finding that Anco first 

tendered the lawsuits on April 23, 2009, we should hold that its own untimely 

tender is nevertheless excused because: (1) Anco’s claims handling and badfaith expert testified that National Union “should have conducted a policy 

search for all of the policies it sold Anco and identified them for Anco” when it 

received the two tenders of asbestos lawsuits in 2000; (2) Mr. Bourgeois 

testified that “at some stage [in the 1980s] I knew AIG said they had no 

asbestos coverage under the policy;” and, (3) Mr. Spadacenta allegedly told Mr. 

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Nilson, a Zurich employee, that Anco did not have asbestos coverage under its 

primary policies.

Our review of the record evidence satisfies us that the district court 

correctly rejected Anco’s contention that its untimely tender should be excused. 

Although Anco makes much of Mr. Cerone’s expert testimony that National 

Union “should have” conducted a policy search when it received the tenders in 

2000,11 Anco does not cite any law for this proposition. As such, it is irrelevant 

to the question of when Anco first tendered defense of its claims under the 

Policy, and the district court properly discounted it. Neither is Anco’s 

contention that Louisiana law imposes a duty on National Union to conduct a 

policy search on receipt of the tenders of the two asbestos-related lawsuits at 

all persuasive. The case that Anco cites in support of this proposition – Vaughn 

v. Franklin – presents facts that are easily distinguishable. In Vaughn, the 

excess insurer was a named defendant in the lawsuit, and the co-insurer 

possessed a copy of the policy under which it sought coverage.12 In contrast, 

National Union was not a named defendant in the underlying lawsuits, and 

Anco was unaware that the Policy existed until it undertook discovery in its 

declaratory judgment action.

We further conclude that the district court properly determined that Mr. 

Bourgeois’s testimony that National Union denied that it provided asbestos

coverage “sometime in the 80’s” did not create a material fact issue. There are 

no contemporaneous documents, such as prior tenders under the Policy that 

support this assertion. Neither is it consistent with the record as a whole. 

“[S]peculation, improbable inferences, unsubstantiated assertions, and legalist 

argumentation do not adequately substitute for specific facts showing a 

11 There is no record of the actual tenders from Anco to National Union regarding the 

Mason and Valdes lawsuits; only Mr. Spadacenta’s letters acknowledging them.

12 Vaughn v. Franklin, 785 So.2d 79, 82 (La. Ct. App. 2001).

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genuine issue for trial.”13 Furthermore, Mr. Nilson’s letter of August 16, 2000, 

in which he relates a conversation with Mr. Spadacenta, does not tend to show 

that National Union misrepresented coverage. Mr. Spadacenta testified that 

the policies he referred to in the August 16, 2000 letter were the ’94, and ‘95 

policies – those that he had listed when he acknowledged the tenders of the 

two claims in 2000. We are satisfied that the district court correctly 

determined that Anco’s failure to tender its claims timely pursuant to the 

terms of the Policy should not be excused.

3. Breach of duty to tender claims timely

The district court found that Anco first tendered the lawsuits under the 

Policy on April 23, 2009, and ruled that Anco’s untimely tender was not 

excusable. Relying on this, the court concluded that National Union was not 

obligated to reimburse Anco for any of legal costs that it incurred before April 

23, 2009, and that related back to defending asbestos-related lawsuits filed 

between 1987 and 2008. The court proceeded to determine that National 

Union was not required to reimburse Anco for any costs incurred on or after

April 23, 2009, for lawsuits filed between 1987 and 2008, because Anco had 

breached the “timely notice” provision of the Policy. Anco challenges this 

determination on appeal, asserting that Louisiana law requires that, before 

avoiding coverage, an insurer must demonstrate that it suffered prejudice from

its insured’s late tender; and that National Union never asserted that it was

prejudiced by Anco’s untimely tender.

The general rule in Louisiana is that when “the requirement of timely 

notice is not an express condition precedent [to insurance coverage], the 

insurer must demonstrate that it was sufficiently prejudiced by the insured’s 

13 Oliver v. Scott, 276 F.3d 736, 744 (5th Cir. 2002).

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late notice” in order to deny coverage.14 This general rule, however, is subject 

to an exception: When timely notice is an express condition precedent to 

coverage, “Louisiana law enforces provisions of insurance contracts which 

require notice as a condition precedent without also requiring the insurer to 

make a particular showing of prejudice.”15 In MGIC Indemnity Corporation v. 

Central Bank of Monroe, Louisiana, we analyzed a line of Louisiana cases 

following Hallman v. Marquette Casualty Company and Payton v. St. John, 

and concluded that, when a policy requires the insured to comply “fully” with 

all the terms of the policy as a “condition precedent” to coverage, and, the policy 

obligates the insured to notify the insurer immediately after a claim is made 

or suit is brought against the insured, the insured’s failure to notify the insurer 

of the lawsuit promptly relieves the insurer of any obligation for costs expended

by the insured in defending the action.16 

Again, the district court found that Anco first tendered defense of the 

underlying lawsuits on April 23, 2009. The Policy required that Anco 

“immediately” forward any claims, suits, or process received by Anco, and 

stated that “[n]o action shall lie against the company unless, as a condition 

precedent thereto, there shall have been full compliance with all of the terms 

of this policy.”17 In line with our precedent and that of the Louisiana courts, 

we hold that Anco’s failure to comply with the notice provision of the policy 

14 Peavey Co. v. M/V ANPA, 971 F.2d 1168, 1173 (5th Cir. 1992). 

15 MGIC Indem. Corp. v. Cent. Bank of Monroe, La., 838 F.2d 1382, 1386 (5th Cir. 

1988) (emphasis supplied); see also Jackson v. Transp. Leasing Co., 893 F.2d 794, 795 (5th 

Cir. 1990).

16 MGIC, 838 F.2d at 1386, id. at 1387 (“Louisiana cases involving ‘condition 

precedent’ or similar language . . . support the proposition that no recovery can be claimed 

where timely notice has not been given.”); see Payton v. St. John, 188 So.2d 647, 652 (La. Ct. 

App. 1966).

17 Emphasis supplied.

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precludes coverage of its untimely tendered lawsuits.18 Moreover, because 

Louisiana law does not require an insurer to demonstrate prejudice as a result 

of late tender when timely notice is a condition precedent to coverage, we reject 

Anco’s contention that the district court erred in not requiring National Union

to show prejudice. Rather, the district court correctly determined that Anco 

breached the terms of the Policy by failing to tender its claims immediately. 

Neither did the district court err in concluding that Anco’s failure to comply 

with the timely notice provision relieved National Union of its obligation to 

reimburse Anco for costs incurred on or after April 23, 2009 in defending 

lawsuits filed between 1987 and 2008. 

C. Statutory penalties

National Union filed another motion for partial summary judgment in 

opposition to Anco’s claim for statutory penalties under La.R.S. §§ 22:1892 and 

22:1973, asserting that (1) National Union had assumed its share of defense 

costs following Anco’s tender of the lawsuits in 2009, and (2) Anco had not 

suffered any loss that would entitle it to statutory penalties. The district court 

granted National Union’s motion because: (1) Anco failed to plead any conduct 

that would constitute a violation of Section 22:1973(A), and (2) Anco could not 

recover penalties under Section 22:1892(B)(1) for the lawsuits filed after April 

23, 2009 because it failed to show that it suffered any “actual damages” 

resulting from National Union’s alleged failure to participate timely in Anco’s 

18 See Hallman v. Marquette Cas. Co., 149 So.2d 131, 135-137 (La. Ct. App. 1963) (“One 

of the terms of the contract herein concerned is that, as a condition precedent to an action 

against the insurer, the insured shall have fully complied with all of the terms of the policy, 

one of which is that he shall immediately forward to the company every demand, notice, 

summons, or other process received by him or his representative.”); see also Joslyn Mfg. Co. 

v. Liberty Mut. Ins. Co., 30 F.3d 630, 634 (5th Cir. 1994) (observing that the “balance of 

equities” approach endorsed by the Louisiana Supreme Court in Jackson v. State Farm 

Mutual Automobile Insurance Company, 29 So.2d 177 (La. 1946), does not apply when “both 

parties are sophisticated businesses, which are expected to be conversant with the terms of 

their contracts”); MGIC, 838 F.3d at 1387 (same).

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defense. On appeal, Anco challenges the district court’s determination that it 

must show “actual damages” to recover under Section 22:1892, contending 

that, under the Louisiana Supreme Court’s decision in Oubre v. Louisiana 

Citizens Fair Plan,19 it is not required to do so. 

1. Section 22:1892(A)(1)

The law governing this inquiry, Section 22:1892(A)(1), states that “all 

insurers . . . shall pay the amount of any claim due any insured within thirty 

days after receipt of satisfactory proofs of loss from the insured.” A party 

seeking statutory penalties under this statute is required to establish that: (1) 

The insurer received satisfactory proof of loss, (2) the insurer failed to pay the 

claim within thirty days, and (3) the insurer’s failure to pay the claim was 

arbitrary and capricious.20 The insured must prevail on all three prongs to 

recover a Section 22:1892(B)(1) penalty of the greater of fifty percent of the loss 

or one thousand dollars.21 

As an initial matter, the district court ruled that Anco’s request for 

statutory penalties relating to underlying lawsuits filed between 1987 and 

2008, which were tendered to National Union on April 23, 2009, was moot 

because the court had dismissed those claims with prejudice. The court then

turned to those of the underlying lawsuits that were filed in or after the year 

2009. Anco claimed that it had tendered approximately 65 asbestos-related 

lawsuits under the Policy between January 2009 and March 2010, and alleged 

that National Union had not timely begun to participate in Anco’s defense, 

despite having made “some response” to the tenders. 

The district court accepted Anco’s contention that National Union failed 

to point to evidence that would “demonstrate that it provided a defense to Anco 

19 79 So.3d 987 (La. 2011).

20 Dickerson v. Lexington Ins. Co., 556 F.3d 290, 297 (5th Cir. 2009).

21 LA. REV. STAT. ANN. § 22:1892(B)(1) (2012) (emphasis supplied).

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within thirty days after receipt of satisfactory proofs of loss,” and ruled that 

genuine issues of material fact existed on this element of Anco’s claim. The 

court did not make any specific finding, however, as to whether Anco provided 

a satisfactory proof of loss to National Union.22 Putting aside this dispute of 

material fact, the court noted that Anco had not cited any specific evidence that 

it had incurred out-of-pocket costs in defending the underlying lawsuits. The 

court therefore ruled in favor of National Union on the ground that Anco failed 

to show that it had suffered actual damages and thus could not recover Section 

22:1892 penalties in relation to the underlying lawsuits filed in or after 2009.

2. Satisfactory proof of loss

Before we address Anco’s contention on appeal that the district court 

erred in requiring it to demonstrate actual damages, we address National 

Union’s assertion that Anco failed to adduce proof of loss sufficient to

commence the thirty-day period in which to pay the claim. Anco pleaded that 

it “tendered [65 asbestos lawsuits] for a defense” to National Union in its 

amended complaint for statutory penalties, but did not allege that this tender 

constituted proof of loss. National Union points to testimony that its 

representative placed Anco’s bills for defense costs in line for payment 

pursuant to the proportional sharing agreement with the other insurers, and 

highlights the district court’s statement that the record is “[de]void of any 

billing records, expense reports, copies of checks, or receipts” that would 

demonstrate Anco incurred damages. Anco does not respond to this assertion, 

but repeats its contention that the district court erred in its interpretation of 

Section 22:1892(B)(1).

22 The district court’s analysis conflated the first and second prongs of the test, which 

require that the insured demonstrate: (1) The insurer received satisfactory proof of loss, and 

(2) the insurer failed to pay the claim within thirty days. The insurer need only receive 

information sufficient to trigger it to act on the claim to be found to have received proof of 

loss. See Richardson v. GEICO Indem. Co., 48 So.3d 307, 314 (La. Ct. App. 2010). 

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Section 22:1892 does not define what constitutes a “satisfactory proof of 

loss.” As the Louisiana Supreme Court recently stated, though, “[i]t is well 

settled that a ‘satisfactory proof of loss’ is only that which is ‘sufficient to fully 

apprise the insurer of the insured’s claims.’”23 Although satisfactory proof of 

loss must include the extent of damages, Louisiana has “adopted liberal rules 

concerning the lack of formality relative to proof of loss.”24 So long as the 

insurer obtains sufficient information to act on the claim, the manner in which 

it obtains the information is immaterial.25 Whether an insured satisfactorily 

bears its burden of proving “satisfactory proof of loss” is a question of fact that 

Louisiana courts review for manifest error.26 

Our inquiry is complicated by the district court’s failure to make a 

specific finding on whether Anco bore its burden on satisfactory proof of loss. 

The court ruled that a question of fact existed as to whether National Union 

provided a defense within thirty days following receipt of satisfactory proof of 

loss, but did not explicitly find that Anco had submitted satisfactory proof of 

loss. On appeal, National Union contends that, because the district court 

determined that Anco had not submitted any billing records or expense reports 

which would support a finding that it had sustained actual damages, we should

infer that Anco failed to provide proof of loss sufficient to commence the 

running of the thirty-day period. We disagree. Proof of loss is a “question of 

fact.” We may not convert the court’s finding regarding Anco’s failure to submit 

proof of actual losses to a finding that Anco failed to bear its burden of 

23 La. Bag Co., Inc. v. Audubon Indem. Co., 999 So.2d 1104, 1119 (La. 2008).

24 Richardson, 48 So.3d at 314; see Youngblood v. Allstate Fire Ins. Co., 349 So.2d 462, 

465 (La. Ct. App. 1977) (holding that a satisfactory proof of loss need not be in writing).

25 Versai Mgmt. Corp. v. Clarendon Am. Ins. Co., 597 F.3d 729, 739 (5th Cir. 2010) 

(internal quotation marks omitted).

26 See Boudreaux v. State Farm Mut. Auto. Ins. Co., 896 So.2d 230, 236 (La. Ct. App. 

2005).

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producing satisfactory proof of loss. Although Anco’s “tender for defense” of 

the underlying claims might not constitute satisfactory proof of loss, even 

under Louisiana’s “liberal rules,” whether Anco carried its burden on proof of 

loss is a question of fact which we cannot decide on this record.27 Nevertheless, 

as we hold that the district court properly concluded that, to recover statutory 

penalties, Anco was required to show it suffered actual damages – as we 

explain below – we decline to remand the case for the trial court to determine 

whether Anco bore its burden of satisfactory proof of loss.

3. Actual damages

Anco’s principal contention on appeal is that the district court erred in 

holding that it could not recover statutory penalties under Section 

22:1892(B)(1) because it failed to show that it had sustained any losses. The 

law is ambiguous on this question. The district court relied on Vaughn v. 

Franklin, in which the Louisiana First Circuit Court of Appeal held that an 

insured is not entitled to recover Section 22:1892(B)(1) penalties from a coinsurer that fails to participate timely in the defense of the underlying lawsuit: 

“While [the co-insurer] acted arbitrarily in failing to provide a defense, the 

insureds were not harmed.”28 In reversing the trial court’s award of penalties, 

the appellate court noted that “[i]f the legislature had intended to punish 

insurance companies that failed to share defense costs, it could have done so –

but it did not.”29 

On appeal here, Anco contends that Louisiana courts now hold that 

actual damages are not a predicate to recovering Section 22:1892(B)(1) 

penalties, pointing us to the Louisiana Supreme Court’s decision in Oubre v. 

Louisiana Citizens Fair Plan. National Union argues that Oubre is 

27 See Richardson, 48 So.3d at 314.

28 See 785 So.2d 79, 91 (La. Ct. App. 2001).

29 Id.

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inapplicable because it reviewed the imposition of penalties under a different 

statute, viz., Section 22:1973(C). Agreeing with National Union, we reject 

Anco’s contention that Oubre permits the imposition of penalties for a violation 

of Section 22:1892(A)(1) under the instant facts. In Oubre, the court reviewed

whether the statutory penalty for violating Section 22:1892(A)(3) – which 

relates to catastrophic property damage – is capped at five thousand dollars in 

the absence of proving actual damages. The court looked first to Sultana 

Corporation v. Jewelers Mutual Insurance Company, wherein it had held that 

an insured is not required to prove that it suffered actual damages as a 

prerequisite to recovering Section 22:1973(C) penalties.30 Because the 

statutory penalty for violating Section 22:1892(A)(3) is contained in Section 

22:1973(C), the court relied on Sultana, as well as its own statutory 

construction, to hold that the five thousand dollar cap acts as a ceiling when 

damages are not proved. 

Oubre is distinguishable from the instant case, which concerns the

imposition of discretionary penalties under a different statute, Section 

22:1892(B)(1). Oubre examined Section 22:1973(C), which provides that, “[i]n 

addition to any general or special damages to which a claimant is entitled . . . 

the claimant may be awarded penalties assessed against the insured in an 

amount not to exceed two times the damages sustained or five thousand 

dollars, whichever is greater.”31 By contrast, Section 22:1892(B)(1) – the 

applicable penalty provision for National Union’s alleged violation of Section 

22:1892(A)(1) – states that any such violation “shall subject the insurer to a 

penalty, in addition to the amount of the loss, of fifty percent damages on the 

amount found to be due from the insurer to the insured, or one thousand 

30 860 So.2d 1112, 1119 (La.2003); see also Audubon Orthopedic & Sports Med., APMC 

v. Lafayette Ins. Co., 38 So.3d 963, 974 (La. Ct. App. 2010). 31 LA. REV. STAT. ANN. § 22:1973(C) (2012) (emphasis supplied).

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dollars, whichever is greater.”32 Although we recognize that both Section 

22:1892 and Section 22:1973 cover an insurer’s duty to timely pay claims if 

required under the terms of a policy,33 their penalty provisions are 

distinguishable. The plain language of Section 22:1892(B)(1) contemplates the 

award of a penalty “in addition” to the amount of the actual loss.34 Moreover, 

the imposition of penalties under Section 22:1973(C) is discretionary, unlike 

those under Section 22:1892, which are mandatory: An insurer’s violation of 

Section 22:1892 “shall subject the insurer to a penalty, in addition to the 

amount of loss.”35 Anco fails to point us to any law – and we have found none 

on our own – which suggests that we could or should extend the rule announced 

in Oubre to cover Anco’s proposed award of penalties under Section 

22:1892(B)(1). As we hold that the district court correctly ruled that Anco’s 

failure to submit evidence that it sustained actual losses as the result of

National Union’s alleged failure to contribute to defense costs precluded Anco’s

claim for Section 22:1892 statutory penalties, we affirm the court’s grant of 

partial summary judgment.

32 LA. REV. STAT. ANN. § 22:1892(B)(1) (2012) (emphasis supplied).

33 See Reed v. State Farm Mut. Ins. Co., 857 So.2d 1012, 1020 (La. 2003).

34 Emphasis supplied. We acknowledge that Section 22:1973(C) contemplates 

awarding a statutory penalty “in addition to any general or special damages,” which is similar 

to the formulation in Section 22:1892(B)(1). Because the penalty is mandatory in Section 

22:1892(B)(1), however, as opposed to the discretionary penalty contemplated in Section 

22:1973(C), we conclude that this similar – yet not identical – formulation of a penalty does 

not control our result. Furthermore, we recognize that Louisiana courts have consistently 

held that Section 22:1892(B)(1) is “penal in nature and is strictly construed.” See Sanders v. 

Wysocki, 631 So.2d 1330, 1335 (La. Ct. App. 1994). As such, we shall not read requirements 

into the statute outside of its plain language. See State v. Bedford, 838 So.2d 758, 760 (La.

2003) (“[T]he legislature is presumed to act with full knowledge of well-settled principles of 

statutory construction.”).

35 See Sultana Corp., 860 So.2d at 1117 (distinguishing Sections 22:1892 and 22:1973 

on the grounds that the former provided for a mandatory penalty, but the latter provides for 

a discretionary award).

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III. CONCLUSION

The judgment of the district court is AFFIRMED.

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