Opinion ID: 2487054
Heading Depth: 1
Heading Rank: 4

Heading: Application of the Amended Version of La. R.S. 22:658

Text: We next consider whether Ms. Durio is entitled to attorney fees pursuant to La. R.S. 22:658, as amended in 2006. At the time Ms. Durio's property was damaged by Hurricane Rita, as well as when Horace Mann began adjustment of her claim, La. R.S. 22:658(B) provided for the imposition of a twenty-five percent penalty against insurers who, in bad faith, failed to make payment within thirty days of receiving satisfactory written proof of loss. There was no provision permitting the award of attorney fees. [13] However, effective August 15, 2006, the Legislature amended La. R.S. 22:658(B) to provide for a fifty percent, rather than a twenty-five percent penalty, and to allow for the imposition of reasonable attorney fees and costs. Acts 2006, No. 813, § 1. [14] Horace Mann argues this Court previously determined in Sher v. Lafayette Ins. Co., 2007-2441 (La.4/8/08), 988 So.2d 186, that the amended version of La. R.S. 22:658 could not be applied retroactively, and that the cause of action arises once satisfactory proof of loss is made to the insurer. Here, the trial court found Ms. Durio submitted adequate proof of loss in April of 2006long before the amended statute took effect on August 15, 2006. Further, there was no evidence of new damage discovered subsequent to the effective date of the statute which would allow for application of the post-amendment version of the statute. By contrast, Ms. Durio argues the trial court's decision to apply the amended version of La. R.S. 22:658 was proper under this Court's decision in Sher. Ms. Durio asserts there was conduct by Horace Mann that occurred after the August 15, 2006, effective date of the amendment which violates the statute. Specifically, because Horace Mann independently elected to conduct a reinspection of the home after August 15, 2006, it was required to adjust the property and act in accordance with the version of La. R.S. 22:658 in effect at that time. Our decision in Sher made clear that the 2006 amendments to La. R.S. 22:658 are not retroactive. 988 So.2d at 199. This Court found an insurer's failure to pay is not a continuing obligation that exposes it to liability pursuant to the amended version of La. R.S. 22:658; rather, we held that, as a general rule, the cause of action and, therefore, an insured's right to recover, comes into existence when and if the insurer fails to pay thirty days after receiving satisfactory proof of loss. Id. However, while this Court held the amendments were not retroactive, we also recognized two situations which might allow for the application of the post-amendment version of La. R.S. 22:658: if the plaintiff had not made satisfactory proof of loss prior to the amendment of La. R.S. 22:658, a petition for damages served after the amendment became effective could serve as satisfactory proof, and therefore trigger the amended version of the statute; or, if the plaintiff discovered new damage and made satisfactory proof of loss which the insurer failed to pay after the amendment became effective, the amended version of the statute could apply. Id. Based on the record in this case, we find no basis to apply the post-amendment version of La. R.S. 22:658. The evidence in the record reflects that Ms. Durio's cause of action for penalties against her insurer arose prior to the effective date of the amendment, when Horace Mann failed to pay the claim thirty days after satisfactory proof of loss was received on May 5, 2006. Nor do the facts of this case present one of the situations set forth in Sher which may allow application of the amendments. First, Ms. Durio both submitted sufficient proof of loss and filed her petition for damages prior to August 15, 2006. Secondly, there were no new damages discovered subsequent to August 15, 2006. The record clearly shows that Ms. Durio asserted her house suffered extensive damages resulting in a total loss shortly after she initiated a claim with Horace Mann. Further, Mr. Norman's January and March, 2006, reports detail extensive structural damage to the house, and Ms. Durio's Sworn Proof of Loss submitted in April of 2006 states that the home was totally destroyed. Moreover, Ms. Durio's Petition for Damages filed on June 13, 2006, asserts that the house was completely destroyed by Hurricane Rita, but Horace Mann refused to classify the home as a total loss. Additional information provided to Horace Mann relative to costs to repair and/or replace the house does not equate to new damage, nor does it change the fact that the house was a total loss from the beginning of the claim. Further, we do not find the reinspection of the property initiated by Horace Mann in November of 2006 created a new cause of action. Based on our decision in Sher, the amended version of La. R.S. 22:658 cannot be applied in this case. Thus, we reverse the lower courts' rulings applying the amended version of the statute, and vacate the award of attorney fees.