Case Name: Natalie C. CHATONEY v. SAFEWAY INSURANCE COMPANY
Court: Louisiana Court of Appeal
Jurisdiction: Louisiana
Decision Date: 2001-06-13
Citations: 801 So. 2d 448
Docket Number: No. 00-1189
Parties: Natalie C. CHATONEY v. SAFEWAY INSURANCE COMPANY.
Judges: Court composed of ULYSSES GENE THIBODEAUX, JIMMIE C. PETERS and ELIZABETH A. PICKETT, Judges.
Reporter: Southern Reporter, Second Series
Volume: 801
Pages: 448–457

Head Matter:
Natalie C. CHATONEY v. SAFEWAY INSURANCE COMPANY.
No. 00-1189.
Court of Appeal of Louisiana, Third Circuit.
June 13, 2001.
Writ Denied Nov. 2, 2001.
Barry A. Roach, Attorney at Law, Lake Charles, LA, Counsel for Plaintiff/Appel-lee, Natalie C. Chatoney.
Robert Voitier, Jr., Boone, Wilkes & Brady, LLP, Attorney at Law, Lafayette, LA, Counsel for Defendant/Appellant, Safeway Ins.
Edward K. Bauman, Attorney at Law, Lake Charles, LA, Curator for Jeff Brown.
Court composed of ULYSSES GENE THIBODEAUX, JIMMIE C. PETERS and ELIZABETH A. PICKETT, Judges.

Opinion:
JjPICKETT, Judge.
FACTS
The accident giving rise to this litigation occurred at the intersection of Sale Road and Hodges Street in Lake Charles, Louisiana, on August 7, 1998. A vehicle driven by Jeff Brown struck the rear of Natalie C. Chatoney's 1986 Cadillac Sedan DeVille as she waited to make a left turn from Sale Road onto Hodges Street. The impact of the collision propelled Ms. Chatoney's vehicle into the opposite lane of Sale Road, where a 1993 Volvo driven by Jonathan Walker collided with Ms. Chatoney's Cadillac. Both Ms. Chatoney's and Mr. Walker's vehicles sustained damage as a result of this collision.
Mr. Brown did not own the vehicle he was driving, but Safeway Insurance Company of Louisiana (Safeway) provided liability insurance coverage for the vehicle. Thus, Mr. Brown was an omnibus insured under the Safeway policy.
Ms. Chatoney filed suit against Jeff Brown and Safeway to recover damages she sustained in the automobile accident. Additionally, she sought recovery against Safeway for its alleged failure to properly adjust her claim as required by La.R.S. 22:658 and La.R.S. 22:1220. Safeway timely answered Ms. Chatoney's October 19,1998, suit.
Attempts to serve Jeff Brown proved unsuccessful. On March 8, 1999, Ms. Cha- toney sought and received from the trial court an appointment of an attorney to represent Mr. Brown. The appointed attorney filed a general denial answer.
Immediately before the trial on the merits began, counsel for Safeway and the appointed attorney filed separate handwritten pleadings entitled "EXCEPTION OF LACK OF PERSONAL JURISDICTION AND/OR INSUFFICIENCY OF SERVICE EOF PROCESS," wherein each attorney asserted that the trial court did not have jurisdiction over Mr. Brown and that service of process on Mr. Brown was insufficient. The trial court took the exceptions under advisement and began the trial. Ultimately, the trial court denied both motions.
Following a trial on the merits, the trial court found Mr. Brown at fault in causing the accident and found that Ms. Chatoney suffered the following damages: $20,000.00 in general damages, $5,186.25 in medical expenses, $1,008.00 in lost wages, $600.00 for the loss of the use of her vehicle, and $4,000.00 in property damages to her vehicle. The trial court rendered judgment against Mr. Brown to the full extent of Ms. Chatoney's damages and against Safeway to the extent of its policy limits: $10,000.00 in general damages and $1,518.01 as Ms. Chatoney's prorated share of the property damages coverage. The trial court rejected Ms. Chatoney's demand against Safeway for statutory penalties and attorney fees.
From this judgment, Mr. Brown filed this appeal. Ms. Chatoney answered the appeal, addressing only the trial court's denial of her claim for statutory penalties and attorney fees against Safeway.
DISCUSSION
EXCEPTION OF NO RIGHT OF ACTION
Mr. Brown's appeal was not filed by his appointed attorney, but was filed by counsel for Safeway. Ms. Chatoney initially responded to the appeal by filing an exception of no right of action in which she asserted that Safeway had "no right of action or interest to institute this [appeal] due to lack of procedural capacity to act on behalf of [Mr. Brown]." Ms. Chatoney asserts that Safeway had no attorney-client relationship with Mr. Brown because it had not represented him at the trial level andjjhad judicially admitted it did not know of his whereabouts.
Safeway responded to the exception by asserting that it had both a right and a duty under its policy of liability insurance to defend Mr. Brown. The policy provides that Safeway "shall defend any suit alleging . bodily injury or property damage and seeking damages which are payable under the terms of this policy" with respect to an insured under the policy. It further provides that the definition of "insured" includes the named insured as well as "any other person using [the insured automobile] to whom the named insured has given permission, provided the use is within the scope of such permission."
Safeway was placed in an unusual and difficult position. Its duty to defend under its policy "is not qualified, limited or restricted in any manner whatsoever." Reichert v. Continental Ins. Co., 290 So.2d 730, 733 (La.App. 1 Cir.), writ denied, 294 So.2d 545 (La.1974). Had Safeway answered on behalf of Mr. Brown at the trial level it would have waived the personal jurisdiction issue for him. Its duty to defend at the trial level amounted to little more than protection of his personal jurisdiction issue for him. When this defense failed, Safeway was then required to consider its obligation toward Mr. Brown in this appeal. "[An] insurer's obligation to defend includes the duty to appeal judgment adverse to the insured where there appears reasonable grounds for taking an appeal." Id.
While Safeway must exhaust its policy limits in payment to Ms. Chatoney, Mr. Brown has reasonable grounds to take an appeal. Safeway's obligation under its insurance policy requires it to protect those reasonable grounds. We find no merit in Ms. Chatoney's exception of no right of action and will consider the merits of Mr. Brown's appeal.
¡¿PERSONAL JURISDICTION ISSUE
Appellant argues two assignments of error. First he argues the trial court erred by finding it had personal jurisdiction over Jeff Brown and, second, the trial court erred by finding that Jeff Brown had notice of the litigation pending against him as required by La. Const, art. I, § 2, and by the Fourteenth Amendment to the United States Constitution.
Officer Mike Weaver of the Lake Charles Police Department investigated the accident and testified that he recorded Mr. Brown's address on his accident report as 1613 Clover Street in Lake Charles. He testified he normally obtained such information from an individual's driver's license.
After suit was filed, the Calcasieu Parish Sheriffs Office attempted service on Mr. Brown on October 23, 1998, and again on October 26, 1998, and filed its return with the notation "unable to locate." The Sheriffs return contains a typed address of "1613 Clover Street," the address provided by appellee's counsel in its original petition. That address is marked through with a pen and, written next to it, is "2126 6th St." The sheriffs return does not indicate whether the officer attempted to serve Mr. Brown at one or both addresses. The trial court made a finding of fact that Mr. Brown in fact was carrying a Louisiana driver's license and was residing at the Clover St. address at the time of the accident. The record supports that finding.
On March 8, 1999, an attorney was appointed to represent Mr. Brown pursuant to the provisions of La.Code Civ.P. art. 5091(A)(1)(a). The appointed attorney was personally served by the sheriffs office on March 26,1999.
On April 9, 1999, the appointed attorney filed an answer wherein he asserted that despite diligent efforts he had been unable to locate Mr. Brown. He asked to be | ¡^relieved of his responsibilities in connection with this lawsuit, however, no action was taken on that request. The appointed attorney had filed an advertisement in the local newspaper seeking information as to the whereabouts of Mr. Brown. He had received no information.
On April 27, 1999, the appointed attorney filed an amended answer wherein he again stated he was unable to locate Mr. Brown. He withdrew his request to be relieved of his appointment and entered a general denial as to the allegations of the petition.
Not until immediately prior to trial on the merits did the appointed attorney and counsel for Safeway file an "EXCEPTION OF LACK OF PERSONAL JURISDICTION AND/OR SUFFICIENCY OF SERVICE OF PROCESS." The trial court ultimately rejected this exception.
TIMELINESS OF EXCEPTIONS
Exceptions of lack of personal jurisdiction and insufficiency of service of process are declinatory exceptions. La.Code Civ.P. arts. 6(A)(3), 925, and 928 provide that declinatory exceptions must be filed prior to or in the answer to a suit or they are waived.
La.Code Civ.P. art. 6 provides in pertinent part:
A. Jurisdiction over the person is the legal power and authority of a court to render a personal judgment against a party to an action or proceeding. The exercise of this jurisdiction requires:
(3) The submission of the party to the jurisdiction of the court by commencing an action or by the waiver of objection to jurisdiction by failure to timely file the declinatory exception.
hLa.Code Civ.P. art. 925 provides in pertinent part:
A. The objections which may be raised through the declinatory exception include but are not limited to the following:
(2) Insufficiency of service of process
(5) The court's lack of jurisdiction over the person of the defendant.
La. Code Civ.P. art. 928 provides as follows:
A. The declinatory exception and the dilatory exception shall be pleaded prior to or in the answer....
The declinatory exceptions filed in the instant matter were filed subsequent to filing both an answer and an amended answer. Indeed, they were filed immediately prior to commencement of trial. Because they were untimely filed, these exceptions are waived. We find no exception under our law which would apply to litigation wherein counsel is appointed by the court rather than retained. Because we find the exception of lack of personal jurisdiction and the exception of sufficiency of service of process were waived because they were not filed timely and in accordance with the provision of La.Code Civ.P. arts. 6, 925, and 928, we will not consider the merits of those exceptions.
ANSWER TO APPEAL FILED BY MS. CHATONEY.
In her answer to Mr. Brown's appeal, Ms. Chatoney asserts that the trial court erred in not awarding her penalties and attorney fees for the arbitrary and capricious failure of Safeway to abide by the mandates of La.R.S. 22:658 and La.R.S. 22:1220.
La.R.S. 22:658(A)(3) provides in part:
(3) Except in the case of catastrophic loss, the insurer shall initiate loss adjustment of a property damage claim and of a claim for reasonable medical expenses within fourteen days after notification of |7loss by the claimant . Failure to comply with the provisions of this Paragraph shall subject the insurer to the penalties provided in R.S. 22:1220.
La.R.S. 22:658(A)(3) requires "that the insurer take some substantive and affirmative step to accumulate the facts that are necessary to evaluate the claim." McClendon v. Economy Fire & Cas. Ins. Co., 98-1537, p. 7 (La.App. 3 Cir. 4/7/99); 732 So.2d 727, 731. "[S]imply opening a file does not satisfy the requirement of La.R.S. 22:658(A)(3)that the insurer initiate loss adjustment." Id.
In this case, the accident occurred on August 7, 1998, and Claude LeBas, a Lafayette, Louisiana, insurance adjuster for Safeway, initially received the accident file on August 12, 1998, giving him notice of Ms. Chatoney's property damage claim. Mr. LeBas initiated his investigation on the same day and very quickly concluded that Mr. Brown caused the accident. By August 17, 1998, Mr. LeBas had received a property damage estimate on Ms. Chato- ney's vehicle, establishing that it was a total loss. Three days later, on August 20, 1998, he received a property damage estimate on Mr. Walker's vehicle, indicating that it too was a total loss. According to Mr. LeBas, he did not offer Ms. Chatoney any amount for her damages because Mr. Walker had indicated his intent to obtain payment for his property damage from State Farm, his insurance carrier. Because Mr. Walker chose to do so, Mr. LeBas felt he had to wait to hear from State Farm in order to know how to prorate the policy limits since the combined property damage exceeded Safeway's policy limits. Mr. LeBas finally received the appropriate documentation from State Farm on December 17, 1998, wherein State Farm asserted that its subrogation claim was $13,243.64. Despite having State Farm's claimed subrogation amount in mid-December of 1998, Mr. LeBas did not offer to settle Ms. Chatoney's property damage claim until June 1R16, 1999, at which time he offered her $1,700.00. On June 24, 1999, he issued a check to State Farm in the amount of $8,232.99, representing what he believed to be State Farm's prorated share of the policy limits. Mr. LeBas did not remember the reason for the delay between receipt of the State Farm subrogation and the attempt to settle the claims. He testified that he believed the delay was due to the necessity of presenting the documentation to defense counsel since suit had already been filed.
Although Safeway did delay in paying Ms. Chatoney, the record supports that Mr. LeBas took substantive and affirmative steps, within fourteen days of receipt of notice, to accumulate facts necessary to evaluate the claim. However, Ms. Chatoney contends that the phrase "initiate loss adjustment" means to "begin settlement of a claim or debt in a case in which the amount involved is uncertain." We disagree. La.R.S. 22:658(A)(3) requires the insurer to "initiate loss adjustment" within fourteen days, "not that the claim be completely resolved or paid within that time period," Moore v. Rowland, 32-644, p. 4 (La.App.2 cir. 3/1/00); 753 So.2d 411, 414, and not that settlement offer be initiated. It is La.R.S. 22:658(A)(4) that requires the insurer to "make a written offer to settle" within thirty days of receiving satisfactory proof of loss. However, La.R.S. 22:658(A)(4) is not a basis for a penalty action by a third party. See La.R.S. 22:658(B); Theriot v. Midland Risk Ins. Co., 694 So.2d 184; Moxley v. Cole, 97-1582 (La.App. 3 Cir.2/3/99); 736 So.2d 249, writ denied, 99-0632 (La.5/7/99); 740 So.2d 1284. We find no manifest error in the trial court's rejection of penalties and attorney fees under La.R.S. 22:658.
Ms. Chatoney also contends that Safeway violated La.R.S. 22:1220(B)(1), which states:
B. Any one of the following acts, if knowingly committed or performed by an insurer, constitutes a breach of the insurer's duties 1 composed in Subsection A:
(1) Misrepresenting pertinent facts or insurance policy provisions relating to any coverages at issue.
Specifically, Ms. Chatoney alleges that Safeway misrepresented that her property damage claim could not be adjusted until it received State Farm's subro-gation claim and Safeway determined what State Farm had paid to the Walkers pursuant to their collision policy. The trial court found that Safeway did not misrepresent anything factually about coverage. We agree. Safeway merely represented its position for the delay in adjusting the claim — this is not tantamount to a misrepresentation of a fact or policy provision related to coverage. Thus, we affirm the trial court's denial of penalties and attorney fees under La.R.S. 22:1220.
CONCLUSION
The exceptions of lack of personal jurisdiction and insufficiency of service of process were untimely and therefore waived. We find no error in the trial court's refusal to award penalties and attorney's fees.
AFFIRMED.
PETERS, J., dissents and assigns written reasons.