Opinion ID: 213920
Heading Depth: 4
Heading Rank: 1

Heading: Partial payment or tender

Text: Section 22:658(B)(1) provides in relevant part: Failure to make such payment within thirty days after receipt of such satisfactory written 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 [1] twenty-five percent damages on the amount found to be due from the insurer to the insured . . . or [2] in the event a partial payment or tender has been made, twenty-five percent of the difference between the amount paid or tendered and the amount found to be due. (emphasis added). The statutory text makes clear that an insurer is entitled to a reduced penalty where it has paid some portion of the insured's claim: in such a case, the amount paid is subtracted from the amount found to be due before applying the requisite percentage. See La. Bag Co., 999 So.2d at 1122 (finding insurer liable under § 22:658(B)(1) for the difference between the amount paid, $1,000,000, and the amount found to be due, $3,266,309). Equally clear, though not explicit in the statute, is that the reduced penalty provision applies if (and only if) the insured's partial payment complies with the statutory requirementsnamely, it is tendered within thirty days after receipt of satisfactory proofs of loss from the insured. § 22:658(A)(1). See Grilletta, 558 F.3d at 370-71 (concluding insurer had not made partial payment under the statute because it did not pay or tender anything to the Plaintiffs within the statutory deadline  (emphasis added)). Indeed, to conclude otherwise would effectively read out the statute's time-limit requirementsuch an interpretation would, for instance, permit insurers who had untimely paid 100 percent of a insured's claim to avoid statutory penalties. In this case, the district court concluded that Allstate's payment to the Plaintiffs on November 4, 2005, was timely, as it occurred within 30 days of Favel's estimate on the Plaintiffs' wind-damage claim. In calculating the statutory penalties due, the district court was therefore obligated to subtract from the amount found to be due the $10,000 Allstate had timely paid the Plaintiffs. Under the correct calculation, the penalty is 25 percent of $338,000, or $84,500. We accordingly modify the district court's penalty award from $87,000 to $84,500.