Case Name: Raymond HEBARD v. Michael DILLON, Regional Transit Authority, Joseph Pitman and ABC Insurance Company
Court: Louisiana Court of Appeal
Jurisdiction: Louisiana
Decision Date: 1997-09-03
Citations: 699 So. 2d 497
Docket Number: No. 97-CA-0221
Parties: Raymond HEBARD v. Michael DILLON, Regional Transit Authority, Joseph Pitman and ABC Insurance Company.
Judges: PLOTKIN, J., dissents with written reasons.
Reporter: Southern Reporter, Second Series
Volume: 699
Pages: 497–504

Head Matter:
Raymond HEBARD v. Michael DILLON, Regional Transit Authority, Joseph Pitman and ABC Insurance Company.
No. 97-CA-0221.
Court of Appeal of Louisiana, Fourth Circuit.
Sept. 3, 1997.
Craig J. Hattier, Covington, for appellant.
Nat G. Kiefer, Jr., Kiefer & Kiefer, Me-tairie, for appellees.

Opinion:
liLOBRANO, Judge.
The sole issue in this appeal is whether the provisions of La.R.S. 22:1220 apply to a party who qualifies as a self-insurer pursuant to La.R.S. 32:1042. The trial judge held that it did not and we agree.
Plaintiff sued the Regional Transit Authority (RTA) for personal injuries he allegedly received in an accident involving an RTA bus in which he was a passenger. Plaintiff alleges that on August 8, 1996 he entered into a written settlement agreement with RTA, but did not receive the settlement check until on or about September 16, 1996. Prior to receiving the check, plaintiff, on September 11th, filed a motion to enforce the settlement and for penalties and damages pursuant to La.R.S. 22:1220. The pertinent portions of that statute provide:
A. An insurer, including but not limited to a foreign line and surplus line insurer, owes to his insured a duty of good faith and fair dealing. The insurer has an affirmative duty to adjust claims fairly and promptly and to make a reasonable effort to settle claims with the insured or the claimant, or both. Any insurer who breaches these duties shall be liable for any damages sustained as a result of the breach.
B. Any one of the following acts, if knowingly committed or performed by an insurer, constitutes a breach of the insurer's duties imposed in Subsection A:
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(2) Failing to pay a settlement within thirty days after an agreement is reduced to writing.
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C. In addition to any general or special damages to which a claimant is entitled for breach of the imposed duty, the claimant may be awarded penalties assessed against the insurer in an amount not to exceed two times the damages sustained or five thousand dollars, whichever is greater. Such penalties, if awarded, shall not be sued by the insurer in computing either past or prospective loss experience for the purpose of setting rates or making rate filings.
After hearing the motion, the trial judge concluded that since plaintiff had received the settlement funds, his motion to enforce the settlement was moot. The court also held that because RTA is self-insured, it is not an insurer under La.R.S. 22:1220. Plaintiff perfects this appeal.
Plaintiff directs our attention to the wording of the statute, particularly the first line of section (A) which begins: "An insurer, including but not limited to a foreign line and surplus line insurer.... " He emphasizes the number of times the word "insurer" is utilized in the statute, as well as the "but not limited to" terminology of the first sentence. Plaintiff also references the provisions of the Motor Vehicle Safety Responsibility Law (MVSRL) which permit self insurance as satisfactory proof of financial responsibility. Specifically he argues that because a self insurer must agree that he will pay the same judgments and in the same amounts that an insurer would have been obligated to pay, the self-insurer is also an "insurer" for, purposes of the penalty provisions of R.S. 22:1220. We disagree.
Resolving the issue in this case involves statutory construction and interpretation. In Theriot v. Midland Risk Insurance Company, 95-2895 (La. 5/20/97), 694 So.2d 184, the court was called upon to decide whether only the Isinsured could utilize the provisions of La.R.S. 22:1220, or whether it also benefitted third party claimants. In resolving the issue the court set forth the following general rules of statutory interpretation:
The function of statutory interpretation and the construction to be given to legislative acts rests with the judicial branch of the government. Touchard v. Williams, 617 So.2d 885 (La.1993). The starting point in the interpretation of any statute is the language of the statute itself. Touch-ard, 617 So.2d at 888. Ambiguous text is to be interpreted according to the generally prevailing meaning of the words employed. La.Civ.Code art. 11. Their meaning may be sought by consulting other laws on the same subject matter. Succession of Baker, 129 La. 74, 55 So. 714 (1911). Where a part of an act is to be interpreted, it should be read in connection with the rest of the act and all other related laws on the same subject. Thibaut v. Board of Com'rs of Lafourche Basin Levee Dist., 153 La. 501, 96 So. 47 (1923). We have long held that the paramount consideration in interpreting a statute is ascertaining the legislature's intent and the reasons that prompted the legislature to enact the law. Garrett v. Seventh Ward General Hosp., 95-0017 (La. 9/22/95), 660 So.2d 841; Touchard, 617 So.2d at 888. Legislative intent is the fundamental question in all eases of statutory interpretation; rules of statutory construction are designed to ascertain and enforce the intent of the statute. State v. Piazza, 596 So.2d 817 (La.1992).
With respect to penal statutes the court observed:
We have generally held that statutes subjecting insurers to penalties are to be considered penal in nature and should be strictly construed. Hart v. Allstate Ins. Co., 437 So.2d 823 (La.1983). We have also recognized that laws in derogation of established rights and principles are to be strictly construed. Where there is any doubt about the intent or meaning of a law in derogation of long accepted rules, the statute is given the effect that makes the least rather than the most change in the existing body of the law. Touchard, 617 So.2d at 892. Moreover, the time honored maxim, expressio nunius et exclusio |4alterius, is yet another helpful guide. It teaches us that when the legislature specifically enumerates a series'-of things, the legislature's omission of other -items, which could have been easily included in the statute, is deemed intentional. State v. Louisiana Riverboat Gaming Com'n., 94-1872, 1914 (La. 5/22/95), 655 So.2d 292.
With these principles in mind, we now turn to the specific issue before us.
It is undisputed that RTA is a self-insurer. That is, it has satisfied the obligations of the MVSRL by obtaining a certificate of self-insurance in accordance with La.R.S. 32:1042. "It is important to understand that self-insurance is, in actuality, not insurance at all. It is merely one of the four methods by which an owner of a motor vehicle is allowed to meet the requirements of the [MVSRL]." Hearty v. Harris, 574 So.2d 1234, 1237 (La.1991). In Aisole v. Dean, 574 So.2d 1248, 1251 (La.1991), the court held that "those who- choose to satisfy the [MVSRL] by obtaining a self-insurance certificate do not have to provide omnibus coverage." And, in Jordan v. Honea, 407 So.2d 503 (La.App. 1st Cir.1981), writ den. 409 So.2d 654, the court concluded that a self-insurer does not automatically afford uninsured motorist coverage simply because it is a qualified self-insured.
The statute before us (La. R.S. 22:1220) is penal in nature and appears in the Insurance Code. As interpreted by the Supreme Court in Theriot v. Midland Risk Insurance Company, supra, it provides for penalties and damages in favor of third party claimants (as well as insureds) for commission, by an Rinsurer, of any one of the four acts enumerated in Section B. The statute was enacted during the 1990 legislative session, the same session in which two other comparable penal statutes in the Insurance Code were amended. A comparison with those statutes provides guidance.
La. R.S. 22:657 provides for penalties and attorney fees against health and accident insurers who fail to comply with its provisions. Section C specifically provides that the statute is applicable to "La]ny person, partnership, corporation or other organization, or the State of Louisiana which provides or contracts to provide health and accident benefit coverage as a self-insurer-" (emphasis added). R.S. 22:658 is applicable to "all insurers issuing any type of contract [other than life insurers and health insurers]", who fail to comply with its provisions. However, unlike R.S. 22:657 but similar to the statute at issue in this ease, R.S. 22:658 does not mention or specifically include self-insurers within its provisions. We also note that the Insurance Code regulates only those self-insurers who provide health care or payment for health care services. La. R.S. 22:3001, et seq.
Considering these factors, we are satisfied that R.S. 22:1220 does not apply to the RTA. RTA's status as a self-insured is determined by the applicable provisions of the MVSRL, not the Insurance Code. The courts have consistently concluded that a self-insurer does not provide insurance, and is not subject to the compulsory omnibus and UM statutes that are otherwise applicable to true insurers. Only R.S. 22:657 specifically includes a self-insurer within its provisions. That is understandable because the only self-insurers regulated by the Insurance Code are those providing health.and health care services. Certainly, when R.S. 22:1220 was enacted in 1990, the legislature was aware that R.S. |622:657 specifically included health self-insurers, and R.S. 22:658 did not. If legislative intent was to include self-insurers within the scope of R.S. 22:1220, it certainly could have been accomplished by specific inclusion at that time.
Simply put, we hold that regulation by way of the Insurance Code of those who qualify as self-insurers under the MVSRL was never intended by the legislature. Despite plaintiffs reference to a self-insurer's obligation to pay the same judgments an insurer would have to pay under its liability policy, that obligation appears in the MVSRL and not in the Insurance Code. Furthermore, the MVSRL equates the self-insurer's obligation with the insurer's obligation under a liability policy, not with the insurer's obligation under the penal statutes of the Insurance Code.
For the above and foregoing reasons, the trial court judgment is affirmed.
AFFIRMED.
PLOTKIN, J., dissents with written reasons.
. The court concluded that the statute created a cause of action for third party claimants, as well as insureds, for the four specific acts set out in section B.
. La.R.S. 32:897 provides four alternative methods, besides obtaining liability insurance, for satisfying the financial responsibility laws of this state. Section 4, applicable in this case, provides that proof may be given by filing:
(4) A certificate of self-insurance, as provided in R.S. 32:1042, supplemented by an agreement by the self-insurer that, with respect to accidents occurring while the certificate is in force, he will pay the same judgments and in the same amounts that an insurer would have been obligated to pay under an owner's motor vehicle liability policy if it had been issued such a policy to said self-insurer.