Case Name: Linda REED v. LOUISIANA CITIZENS PROPERTY INSURANCE CORPORATION d/b/a Louisiana Citizens Coastal Plan
Court: Louisiana Court of Appeal
Jurisdiction: Louisiana
Decision Date: 2008-03-05
Citations: 980 So. 2d 754
Docket Number: No. 2007-CA-1592
Parties: Linda REED v. LOUISIANA CITIZENS PROPERTY INSURANCE CORPORATION d/b/a Louisiana Citizens Coastal Plan.
Judges: (Court composed of Judge DENNIS R. BAGNERIS, SR., Judge TERRI F. LOVE, Judge MAX N. TOBIAS, JR., Judge EDWIN A. LOMBARD, Judge LEON A. CANNIZZARO, JR.).
Reporter: Southern Reporter, Second Series
Volume: 980
Pages: 754–760

Head Matter:
Linda REED v. LOUISIANA CITIZENS PROPERTY INSURANCE CORPORATION d/b/a Louisiana Citizens Coastal Plan.
No. 2007-CA-1592.
Court of Appeal of Louisiana, Fourth Circuit.
March 5, 2008.
John H. Denenea, Jr., Brian G. Shear-man, Shearman-Denenea, L.L.C., New Orleans, LA, for Linda Reed.
Gregory J. McDonald, Bienvenu, Foster, Ryan & O’Bannon, LLC, New Orleans, LA, for Louisiana Citizens Property Insurance Corporation.
(Court composed of Judge DENNIS R. BAGNERIS, SR., Judge TERRI F. LOVE, Judge MAX N. TOBIAS, JR., Judge EDWIN A. LOMBARD, Judge LEON A. CANNIZZARO, JR.).

Opinion:
TERRI F. LOVE, Judge.
|, This appeal arises from the trial court's judgment awarding Linda Reed the policy limits on her home destroyed by Hurricane Katrina, determining that the Louisiana Citizens Property Insurance Corporation acted arbitrarily and capriciously, and awarding penalties accordingly. The appeal concerns the alleged immunity from penalties of the Louisiana Citizens Property Insurance Corporation and that La. R.S. 22:658's penalty provision does not apply retroactively. We find that the Louisiana Citizens Property Insurance Corporation is not immune from penalties and that La. R.S. 22:658's penalty provision does not apply retroactively. Therefore, we amend in part and affirm as amended.
FACTUAL BACKGROUND AND PROCEDURAL HISTORY
On August 29, 2005, Linda Reed's ("Ms. Reed") house in the Lake Catherine area of New Orleans was destroyed by Hurricane Katrina. Ms. Reed filed a petition for damages against the Louisiana Citizens Property Insurance Corporation ("LCPIC") demanding payment of her policy limits as well as penalties and attorney's fees for alleged arbitrary and capricious behavior. The trial court awarded Ms. Reed the policy limits relative to her housing structure, other structures, loss of use, and later amended the judgment to add the policy | ¡¿units for contents. Further, the trial court awarded fifty percent penalties, $70,200 pursuant to La. R.S. 22:658, as well as interest and costs. LCPIC filed this timely appeal asserting that the trial court erred as to LCPIC alleged immunity from penalties and by applying La. R.S. 22:658 retroactively.
STANDARD OF REVIEW
The appellate court reviews questions of law using the de novo standard of review. Bowser v. Premier Auto. Group, 07-0324, p. 3 (La.App. 4 Cir. 11/14/07), 971 So.2d 426, 428. Therefore, we must determine whether the trial court was legally correct or incorrect. Fagot v. Parsons, 06-1528, p. 2 (La.App. 4 Cir. 5/9/07), 958 So.2d 750, 752.
IMMUNITY
LCPIC asserts that it is immune from penalties; therefore, the trial court erred in assessing it penalties. The trial court assessed penalties against LCPIC pursuant to La. R.S. 22:658, which currently reads, in pertinent part:
A. (1) All insurers issuing any type of contract, other than those specified in R.S. 22:656, 657, and Chapter 10 of Title 23 of the Louisiana Revised Statutes of 1950, shall pay the amount of any claim due any insured within thirty days after receipt of satisfactory proofs of loss from the insured or any party in interest. The insurer shall notify the insurance producer of record of all such payments for property damage claims made in accordance with this Paragraph.
(4) All insurers shall make a written offer to settle any property damage claim, including a third-party claim, within thirty days after receipt of satisfactory proofs of loss of that claim.
B. (1) Failure to make such payment within thirty days after receipt of such satisfactory written proofs and demand therefor or failure to make a written offer to settle any property damage claim, including a third-party claim, within thirty days after receipt of satisfactory | sproofs of loss of that claim, as provided in Paragraphs (A)(1) and (4), respectively, or failure to make such payment within thirty days after written agreement or settlement as provided in Paragraph (A)(2), when such failure is found to be arbitrary, capricious, or without probable cause, 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 dollars, whichever is greater, payable to the insured, or to any of said employees, or in the event a partial payment or tender has been made, fifty percent of the difference between the amount paid or tendered and the amount found to be due as well as reasonable attorney fees and costs. Such penalties, if awarded, shall not be used by the insurer in computing either past or prospective loss experience for the purpose of setting rates or making rate filings.
La. R.S. 22:658. However, we have found no wording or statute that specifically exempts LCPIC from penalties pursuant to La. R.S. 22:658. The legislature granted some immunity to the Louisiana Insurance Guaranty Association Fund, the Louisiana Insurance Rating Commission, its staff, and the LCPIC's governing board. See La. R.S. 22:1220 and La. R.S. 22:1430.5. Additionally, this Court held that LCPIC is not immune from penalties. Orellana v. La. Citizens Prop. Ins. Carp., 07-1095, p. 4 (La.App. 4 Cir. 12/5/07), 972 So.2d 1252, 1255. Therefore, we find that the trial court did not commit legal error in assessing LCPIC penalties pursuant to La. R.S. 22:658.
RETROACTIVITY
LCPIC contends that the amended version of La. R.S. 22:658, as shown above, does not apply retroactively to the case sub judice.
The amended version of La. R.S. 22:658, effective August 2006, provides for a fifty percent penalty, as well as reasonable attorney's fees and costs. However, the pre-amendment version provides for a twenty-five percent penalty and no attorney's fees or costs. La. C.C. art. 6 provides guidance as to retroactivity |4as follows:
In the absence of contrary legislative expression, substantive laws apply prospectively only. Procedural and interpretative laws apply both prospectively and retroactively, unless there is a legislative expression to the contrary.
La. C.C. art. 6. La. R.S. 22:658 contains no language regarding retroactivity. Therefore, we must determine whether the amendment constitutes substantive or procedural changes. Sher v. Lafayette Ins. Co., 07-0757, p. 17 (La.App. 4 Cir. 11/19/07), 973 So.2d 39, 55.
"A statutory amendment changing the percentage of permitted penalties is substantive and cannot be applied retroactively." Sher, 07-0757, p. 18, 973 So.2d at 56. "Therefore, the time when the right to the penalty comes into existence determines which penalty percentage applies." Francis v. Travelers, Ins. Co., 581 So.2d 1036, 1044 (La.App. 1st Cir.1991), citing Gulf Wide Towing, Inc. v. F.E. Wright (U.K.) Ltd., 554 So.2d 1347 (La.App. 1st Cir.1989). It is undisputed that LCPIC began adjusting Ms. Reed's claim and filed her petition prior to the effective amendment date of the La. R.S. 22:658 revision. This Court also held that the amended version of La. R.S. 22:658 is not retroactive. Sher, 07-0757, p. 18, 973 So.2d at 56.
Thus, we find that the trial court committed legal error by applying La. R.S. 22:658, as amended and reverse. The trial court awarded $70,200 in penalties, which was fifty percent of the total award. We now amend the penalty award to reflect twenty-five percent of the total award, $35,100.
DECREE
For the above mentioned reasons, we find that the amended penalty provision contained in La. R.S. 22:658 is not retroactive and fix the penalty at |fi$35,100. However, we find that the trial court did not err in finding that LCPIC is not immune from penalties.
AMENDED IN PART; AFFIRMED AS AMENDED.
CANNIZZARO, J., dissents and assigns reasons.
. Policy limits and the finding of arbitrariness and capriciousness are not at issue in this appeal.