Case Name: The SULTANA CORPORATION d/b/a Hannon Jewelers v. JEWELERS MUTUAL INSURANCE COMPANY
Court: Louisiana Court of Appeal
Jurisdiction: Louisiana
Decision Date: 2002-12-31
Citations: 837 So. 2d 134
Docket Number: No. 2001 CA 2059
Parties: The SULTANA CORPORATION d/b/a Hannon Jewelers v. JEWELERS MUTUAL INSURANCE COMPANY.
Judges: Before: FOIL, FOGG and KLINE , JJ.
Reporter: Southern Reporter, Second Series
Volume: 837
Pages: 134–137

Head Matter:
The SULTANA CORPORATION d/b/a Hannon Jewelers v. JEWELERS MUTUAL INSURANCE COMPANY.
No. 2001 CA 2059.
Court of Appeal of Louisiana, First Circuit.
Dec. 31, 2002.
Writ Granted April 25, 2003.
Leonard Cardenas, III, Baton Rouge, for Appellant Plaintiff The Sultana Corporation d/b/a Hannon Jewelers.
Amos Davis, Baton Rouge, for Appellee Defendant Jewelers Mutual Ins. Co.
Before: FOIL, FOGG and KLINE , JJ.
Judge WILLIAM F. KLINE, Jr., Retired, serving Pro Tempore by special appointment of the Louisiana Supreme Court.

Opinion:
_[¿FOIL, J.
In this appeal, an insured challenges the trial court's dismissal of a claim for statutory penalties against its insurer under La. R.S. 22:1220. We affirm.
FACTUAL AND PROCEDURAL BACKGROUND
The Sultana Corporation sued its insurer, Jewelers Mutual Insurance Company, for denial of coverage under the applicable insurance policy. The trial court conducted a trial and rendered judgment in open court in favor of Sultana for $14,426.00, plus legal interest and court costs. Thereafter, on February 1, 2001 (before the trial court signed a written judgment), Jewelers' counsel faxed a letter to Sultana's counsel, indicating Jewelers' decision to pay the award and requesting that Sultana's counsel date, sign, and return the letter. Sultana's counsel wrote "Agreed & Accepted" at the bottom of the letter, and signed and returned it to Jewelers' counsel by return fax on the same day. Later, Sultana filed a "Motion to Enforce Settlement and For Statutory Penalties, Attorney's Fees and Costs .contending Jewelers failed to timely pay the amount owed within 30 days of the date of the February 1, 2001 "settlement." Although Jewelers subsequently paid the amount owed, Sultana pursued its motion seeking statutory penalties.
The trial court conducted a hearing on the motion, and thereafter signed a judgment denying it. In reasons for judgment, the trial court indicated Sultana failed to prove it sustained actual damages because of Jewelers' untimely payment of the settlement, and, therefore, was not entitled to a penalty award. Sultana appeals.
DISCUSSION
Regarding penalties against an insurer for failure to timely fund a settlement, La. R.S. 22:1220 provides:
A. An 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 |ssettle claims with the insured . 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:
(2) Failing to pay a settlement within thirty days after an agreement is reduced to writing.
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.
In its first assignment of error, Sultana contends the trial court erred in requiring proof of actual damages in sup port of Sultana's penalty claim against Jewelers. Although other appellate courts of this state have decided differently, this court has consistently held that for an insurer to be liable for damages under La. R.S. 22:1220, the insured must prove he sustained actual general or special damages as a result of the insurer's breach. Reed v. Recard, 97-2250 (La.App. 1 Cir. 11/18/98), 744 So.2d 13, 19, writ denied, 98-3070 (La.2/12/99), 738 So.2d 572; Batson v. South Louisiana Medical Center, 97-1382 (La.App. 1 Cir. 9/25/98), 724 So.2d 782, 789, writ granted in part, jmt. amended on other grounds, 98-2709 (La.1/8/99), 734 So.2d 649; Carter v. Davis, 95-2198 (La.App. 1 Cir. 5/10/96), 673 So.2d 362, 364, writ denied, 96-1449 (La.6/27/97), 696 So.2d 991. Therefore, the trial court did not err in requiring Sultana to prove actual damages. Sultana's argument to the contrary is without merit.
Alternatively, Sultana argues it did make an adequate showing of damages in the form of the affidavit of Mr. Bayardo Hannon, owner of |4Sultana. In the affidavit, Mr. Hannon stated that Jewelers' failure to timely pay the settlement required Sultana to use out-of-pocket cash (rather than the settlement proceeds) to pay for lighting, display cases, and other items needed for the construction of its new store. Having to use out-of-pocket cash delayed the move-in date into the new store, which in turn caused the accrual of additional interest on the construction loan, and that this interest would have to be paid by Sultana.
A plaintiff has the burden to prove the damage he claims with legal certainty. Tudor Chateau Creole Apartments Partnership v. D.A. Exterminating Company, Inc., 96-0951 (La.App. 1 Cir. 2/14/97), 691 So.2d 1259, 1264. Mr. Hannon's complaints regarding Sultana's use of out-of-pocket cash, the delay in moving into a new store, and the accrual of additional interest on a construction loan are not certain enough to establish what damage, if any, Sultana suffered. The only loss that can be discerned from Mr. Hannon's affidavit is the payment of additional interest on a loan which allegedly would not have been owed had Jewelers timely paid the settlement. However, Mr. Hannon does not indicate the amount of additional interest, and in fact, does not even indicate that Sultana had to pay the additional amount; rather, according to Mr. Hannon, the additional amount would have to be paid by Sultana in the future. Thus, the trial court's factual determination that Mr. Hannon's affidavit was insufficient to establish actual damages was not manifestly erroneous. See Batson, 724 So.2d at 789.
For the foregoing reasons, the trial court's judgment, dismissing Sultana's claim for statutory penalties against Jewelers, is affirmed. Costs of this appeal are assessed to Sultana.
AFFIRMED.
WILLIAM F. KINE, Judge Pro Tem., concurs with reasons.
FOGG, J., dissents and assigns reasons.
. See Rogers v. Commercial Union Insurance Company, 01-443 (La.App. 3 Cir. 10/3/01), 796 So.2d 862, 868-869; Gilpin v. State Farm Mutual Automobile Insurance Company, 99-36 (La.App. 5 Cir. 5/19/99), 735 So.2d 921, 929; and Brinston v. Automotive Casualty Insurance Company, 96-1982 (La.App. 4 Cir. 12/3/97), 703 So.2d 813, 817.
. Because we decide this appeal based on an inadequate showing of damages, we need not address the issue of whether Jewelers' untimely payment was knowing and intentional.