Opinion ID: 701273
Heading Depth: 2
Heading Rank: 1

Heading: Condition of the Building Prior to the Hurricane

Text: 11 The district court found the building had an actual cash value of approximately $160,000.00 before the hurricane. The finding was based on the testimony of David Hebert, the insurance agent, and Michael St. Germaine, the insurance broker, who agreed that the actual cash value assigned to the building by the insurer was $160,000.00. This figure was assigned even though Tommy Hebert had requested the limits be set only at the actual purchase price, $75,000.00, which the insurers refused because of the coinsurance provision. Subsequent to the loss, the insurance company's adjuster, Wayne Ward, stated in his preliminary report that the value of the building was $160,636.00. 3 The district court also considered the testimony of Patrick Caffery, a disinterested witness who had inspected the building for the First Acadiana National Bank in February 1992, and again just days before the sale to Real Asset. He testified that at the time of his second inspection there was no substantial change in the building's condition. Caffery's replacement value estimate 4 was consistent with the testimony of Glenn Wilson, a certified M.A.I. appraiser. Wilson testified that the actual cash value of the building before the storm was $181,440.00. 5 The district court concluded that the testimony established that the building's value was consistent with what the building had been insured for, and although the building had suffered some deterioration before the storm, it was not in the dilapidated condition defendants claimed. 12 Part of the difficulty is that neither the insured, insured's agent nor the insurer inspected the building before Hurricane Andrew. In our review of the record we find that the district court was correct in finding that the actual cash value of the building prior to the storm was commensurate with the insurance company's own valuation. The policy at issue 6 is an actual cash value 7 policy. Under this type of policy, the premium paid is based on the value assigned by the insurer. The defendants argue that allowing the plaintiffs to recover the policy limits gives them a windfall when they paid less than half that as the purchase price a month before the storm. However, as the defendants testified, they would not accept it as the value of the property for insurance purposes. Under Louisiana Valued Policy Law, if the insurer bases the premium on its valuation of the property, then in the event of a total loss, the insurer shall pay the actual cash value, or in other words, the policy amount. 8 La.R.S. Sec. 22:695(A). The value that is determinative is the value placed on the property by the insurance company. Moreover, it was the insurance company's own formulation that ultimately set the policy amount. 13 The testimony of several experts established that the value of the building prior to the storm was consistent with the insurance company's assessment of the property. The defendants contend that the court relied on the testimony of Glenn Wilson, but ignored the testimony of other experts who had inspected the building prior to the storm, namely Patrick Caffery and Gordon James. On appeal, however, an appellate court gives much deference to the district court's assessment of the credibility of witnesses. United States v. Bass, 10 F.3d 256, 258 (5th Cir.1993). A finding of fact in that regard will not be overturned unless manifest error appears in the record. Id. The district court found Mr. Caffery to be extremely credible, and only discredited his depreciation figures. 9 Gordon James had also previously appraised the property for the Bank of Iberia 10 every year from 1987 to 1991, but the district court did not find his testimony reliable. James stated he had a recollection of the problems, but did not detail those problems in his reports to the bank. We accept the determination by the district court that the testimony of M.A.I. appraiser Glenn Wilson and Patrick Caffery was credible and that the testimony of Gordon James was not as reliable. Although Wilson did not inspect the building prior to the storm, his calculation was still very close to the insurance company's own valuation. Further, Wayne Ward, an adjuster for the insurance company, stated in his preliminary report subsequent to the loss, that the building had an actual cash value of $160,636.00. The record supports the finding of the district court. 14