Opinion ID: 1668827
Heading Depth: 1
Heading Rank: 2

Heading: penalties and attorney fees for failure to timely pay medical expenses

Text: Plaintiff's claim for penalties and attorney fees is predicated on La.R.S. 22:658, which provides in pertinent part: All insurers issuing any type of contract other than those specified in R.S. 22:656 [life insurance] and 22:657 [health and accident insurance] shall pay the amount of any claim due any insured ... within sixty days after receipt of satisfactory proofs of loss from the insured, .... Failure to make such payment within sixty days after receipt of such proofs and demand therefor, 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 12% damages on the total amount of the loss, payable to the insured, ... together with all reasonable attorney's fees for the prosecution and collection of such loss, or in the event a partial payment or tender has been made, 12% of the difference between the amount paid or tendered and the amount found to be due and all reasonable attorney's fees for the prosecution and collection of such amount.... In the instant case, we find that Allstate failed to pay plaintiff's medical expenses under the medical payments provision of the policy within sixty days after receipt of satisfactory proof of loss and demand therefor. Allstate was in possession of several of plaintiff's bills on August 25, 1980, was informed that these bills were in connection with the accident, and demand was made for payment. On August 29 and September 4, 1980, plaintiff submitted additional bills and furnished Allstate with a medical authorization form. At this time, if Allstate doubted that the medical bills did not arise from the accident, it was encumbent upon Allstate, not plaintiff, to investigate the claim within the sixty-day statutory period beginning September 4, 1980. [3] The bills were not paid nor was an investigation of the claim, of which there had never been any real dispute, conducted by Allstate within the time allowed by law. Accordingly, we find that Allstate's failure to pay this claim within the prescribed period was arbitrary, capricious and without probable cause. Hence, the court of appeal erred in reversing that part of the judgment of the trial court awarding penalties and attorney fees for the failure of Allstate to timely pay plaintiff's medical expenses. [4]