Opinion ID: 1772539
Heading Depth: 1
Heading Rank: 3

Heading: Extent of Damages

Text: The one true issue presented in this case is whether plaintiff had fully apprised Utica as to the extent of his general damages. Plaintiff had $8,095.72 worth of medical damages and, as stated above, recovered the $10,000 liability limits under the Latino policy. Defendant knew early on in these proceedings, at least by the time of McDill's deposition on August 4, 1982, that there was only $10,000 of available underlying bodily injury coverage. After the deposition, Utica knew the claim, the basis for the claim and the doctors involved. It then became necessary for Utica to determine whether there would be a legitimate basis for defending not paying at least what it considered to be undisputed in order to avoid being arbitrary and capricious. The evidence showed that the defendant knew that the underinsured motorist was negligent and absolutely no evidence whatsoever was developed to suggest that plaintiff was in any way contributorily negligent. Defendant further knew, and indeed even admitted, that it had no evidence to support any contention that the disc surgery which plaintiff had to undergo was not causally related to the injuries sustained in the accident. In fact, Utica only deposed the plaintiff and only called one witness at trial. The fact that Utica's defenses were fruitless became evident to them at least by the time they received plaintiff's letter transmitting the operating surgeon's report on October 29, 1982. This was more than 60 days before trial. Additionally, since plaintiff's special damages exhausted almost all of the $10,000 primary coverage, his general damages for disc surgery had to have grossly exceeded that amount and this should have been obvious to Utica. If the insured has shown that he was not at fault, the other driver was uninsured/underinsured and that he was in fact damaged, the insurer cannot stonewall the insured because the insured is unable to prove the exact extent of his general damages. General damages by their very nature are subjective and incapable of exact computation. To accept the defendant's position that no amount must be tendered unless the exact extent of general damages is proven renders the 4th element of the Hart test meaningless as it places an impossible burden on the plaintiff prior to going to trial. If the first three elements of the Hart test are satisfied and the insured has made a showing that the insurer will be liable for some general damages, the insurer must tender the reasonable amount which is due. This amount would be unconditionally tendered to the plaintiff not in settlement of the case, but to show their good faith in the matter and to comply with the duties imposed upon them under their contract of insurance with the insured. The amount that is due would be a figure over which reasonable minds could not differ. In the present case as pointed out by the court of appeal, there was definitely a dispute over the exact extent of the plaintiff's injuries. [3] However, there is little question that Utica had some liability to the insured as a review of the record convinces this court that plaintiff's claim was clearly worth more than the $10,000.00 which was the primary coverage on Latino's policy. [4] It is true that if Utica had been provided with every medical bill plaintiff had concerning the accident and surgery, they would have been in the best position to evaluate McDill's injuries. However, in this particular case where plaintiff's medical bills all but deleted the $10,000 primary coverage, Utica had to have been fully apprised that they had some liability to McDill as their insured. [5] In this case, had Utica tendered some reasonable amount of the general damages, they would not have been arbitrary and capricious and the penalty provision would not apply. We recognize that La.R.S. 22:658 is penal in nature and is to be strictly construed. The stipulated sanctions should be imposed only in those instances in which the facts negate probable cause for non-payment. Crawford v. Al Smith Plumbing & Heating Services, Inc., 352 So.2d 669 (La.1977). However, we conclude that under the particular facts of this case, the statute would be rendered meaningless if McDill were not allowed to recover for penalties and attorney's fees for Utica's failure to tender a reasonable amount of his general damage award. [6] The facts simply refute any probable cause for non-payment. Accordingly, our opinion is the trial court was not manifestly erroneous in concluding that Utica was arbitrary and capricious in its refusal to pay a reasonable amount over the $10,000 claim.