Opinion ID: 213920
Heading Depth: 4
Heading Rank: 2

Heading: Sher, Louisiana Bag, and Grilletta

Text: Turning to Allstate's central argument, we next consider how courts have assessed penalties under § 22:658. We do not interpret the penalty provision of § 22:658(B)(1) against a blank slate. The Louisiana Supreme Court has recently issued two decisions of relevance here, Sher and Louisiana Bag Company, and we recently addressed this issue in Grilletta. As an initial matter, we reject outright Allstate's suggestion that we may ignore or otherwise disregard our holding in Grilletta. It is a well-settled Fifth Circuit rule of orderliness that one panel of our court may not overturn another panel's decision, absent an intervening change in the law, such as by statutory amendment, or the Supreme Court, or our en banc court. Jacobs v. Nat'l Drug Intelligence Ctr., 548 F.3d 375, 378 (5th Cir.2008). Allstate has pointed to no intervening law since Grilletta that would give us occasion to reconsider that decision, nor have we found any in our own research. Indeed, Allstate has not identified any relevant Louisiana case that interprets the phrase amount found to be due in the way it urges us to. We also cannot agree with Allstate that Grilletta is inconsistent with Sher or Louisiana Bag. In fact, we conclude that all three cases are in accord with one another. We summarize the cases briefly. In Sher, the Louisiana Fourth Circuit Court of Appeal concluded that the insurer, Lafayette Insurance Company, was liable for § 22:658 penalties because it had failed to pay an undisputed portion of Sher's claim. With respect to penalties, Lafayette argued that it should not be subject to penalties on the parts of the claim it had disputed in good faith. Lafayette thus noted that it had withheld payment in good faith on the plaintiff's business personal property (BPP) claim, and therefore should not be subject to penalties on that claim. The court rejected Lafayette's argument, agreeing with Sher that whether [Sher's] claim for BPP was disputed in good faith is irrelevant due to the fact that the failure to pay lost rents and property damage was in bad faith, which dictates that the trial court assess penalties on Mr. Sher's entire claim pursuant to Warner. Sher v. Lafayette Ins. Co., 973 So.2d 39, 62 (La.Ct.App.2007) (emphasis added) (citing Warner v. Liberty Mut. Fire Ins. Co., 543 So.2d 511 (La.Ct.App.1989)). The Louisiana Supreme Court granted certiorari, adjusted the award for payment due, and similarly concluded that because Lafayette failed to tender the undisputed portion of plaintiff's lost rents, it was liable for penalties on the entire amount the court determined was due under the contract. Sher, 988 So.2d at 207. In Louisiana Bag, the insurer sent the insured a $1,000,000 advance on an insurance claim before it had received satisfactory proof of loss. 999 So.2d at 1110. Once it received the satisfactory proof of loss, however, the insurer failed to timely pay the balance due. The Louisiana Supreme Court concluded that the insurer was thus liable for § 22:658 penalties. The court calculated penalties on the difference between the amount ultimately found to be due, $3,266,309, and the $1,000,000 partial payment that was timely made. In doing so, the court noted that the insurer's failure to timely pay any one of [the undisputed portions of the insured's claim] would have been sufficient to render [it] liable under La. R.S. § 22:658 for the difference between the amount paid, $1,000,000, and the amount found to be due, $3,266,309. Id. at 1122 (emphasis added). Finally, in Grilletta, we held that § 22:658 penalties were due on the entire amount of the insured's claim, including amounts withheld and disputed in good faith. We rejected the insurer's argumentidentical to the one Allstate makes herethat the phrase amount found to be due in the penalty provision means that amount over which reasonable minds could not differ. 558 F.3d at 370. We also noted that while the insurer in Louisiana Bag had timely made partial payment, the insurer in Grilletta did not pay or tender anything to the Plaintiffs within the statutory deadline. Id. at 371. We therefore concluded the insurer was liable for penalties on the entire amount found to be due, without any subtraction for amounts paid. Id. [16] In light of our prior decision in Grilletta, we conclude that the district court was correct to interpret amount found to be due in § 22:658 as the entire amount ultimately found to be due to the Plaintiffs.