Court Opinion

ID: 2796421
Source: CourtListenerOpinion
Date Created: 2015-04-24 18:00:49.751151+00
Date Added: 2024-06-11T12:37:07.081242
License: Public Domain

IN THE UNITED STATES COURT OF APPEALS
                 FOR THE FIFTH CIRCUIT     United States Court of Appeals
                                                    Fifth Circuit

                                                                         FILED
                                                                    February 25, 2015
                                 No. 13-31313
                                                                      Lyle W. Cayce
                                                                           Clerk
ANCO INSULATIONS, INCORPORATED, a Louisiana Corporation,

            Plaintiff - Appellant

v.

NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH,
PENNSYLVANIA,

            Defendant - Cross Defendant - Appellee

ROYAL INDEMNITY COMPANY, a Delaware Corporation; ZURICH
AMERICAN INSURANCE COMPANY; AMERICAN GUARANTEE;
LIABILITY INSURANCE COMPANY,

            Cross Claimants - Appellants

                Appeals from the United States District Court
                    for the Middle District of Louisiana

Before DAVIS, WIENER, and HAYNES, Circuit Judges.
PER CURIAM:
      In this insurance coverage dispute, the district court granted a motion
for partial summary judgment to Defendant-Appellee National Union Fire
Company of Pittsburgh, Pennsylvania (“National Union”). The court reasoned
that, because Plaintiff-Appellant Anco Insulations, Incorporated (“Anco”) had
failed to tender claims timely under the terms of its insurance policy, National
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Union was not obligated to reimburse Anco for any legal costs that it incurred
in defending the untimely tendered lawsuits. The district court also granted
National Union’s motion for partial summary judgment on Anco’s claim for
statutory penalties under La.R.S. §§ 22:1973, 22:1892. We affirm.
                         I.     FACTS & PROCEEDINGS
A.    Factual background
      From approximately 1972 through the early 1980s, Anco sold, installed,
repaired, and distributed insulation materials that contained asbestos. As a
result, Anco was named a defendant in approximately 2,700 asbestos-related
lawsuits filed in Louisiana, Texas, and Mississippi. In 1987, National Union
issued a primary general liability insurance policy to Anco (“the Policy”), for
the policy period January 1, 1987 to January 1, 1988. The Policy did not
contain an asbestos exclusion.
      The following factual background is contested; we summarize it only to
provide the context of Anco’s claim that the district court erred in granting
National Union’s motions for partial summary judgment.           We begin with
Anco’s allegation that, at “some point” during the late 1980s, National Union
told Anco’s corporate representative, Mr. Bourgeois, that Anco had no asbestos
coverage. In March of 2000, Robert Kuehn, a manager at the AIG Toxic Tort
Claims department, 1 requested permission from Anco’s counsel, Thomas
Balhoff, to visit Zurich’s offices and review its files on Anco’s asbestos claims.
Mr. Balhoff granted permission on behalf of Anco. In that same year, Anco
tendered two asbestos lawsuits to National Union for defense by the insurer,

      1   National Union is a member company of AIG.
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as evidenced by the insurer’s two letters acknowledging the claims. The claims
were tendered under other policies, however, not under the Policy. 2
       In August 2000, Mr. Spadacenta, a National Union representative,
allegedly advised Mr. Nilson, a Zurich claims handler, that Anco had not
reported the asbestos bodily injury claims under its primary policies. 3 In
January 2001, Anco’s counsel wrote to Greg Mayer of AIG Toxic Tort Claims,
a part of National Union Insurance Company, advising National Union of the
pending asbestos litigation and putting National Union on notice that it had
issued excess coverage to Anco under a different policy.
B.     District court proceedings
       In September 2007, Anco filed a complaint seeking a declaratory
judgment against several of its excess liability insurers. National Union was
not named as a defendant in that initial complaint. During the course of
discovery, Anco became aware of the existence of the Policy and of the fact that
it did not contain an asbestos exclusion. On April 23, 2009, Anco forwarded all
suits to National Union that had been served on Anco and tendered them to
National Union under the Policy. In May 2009, Anco added National Union as
a party-defendant to its pending declaratory judgment action against its excess
insurers. In January 2010, Anco began forwarding all lawsuits that were or
had been served on it to National Union. In February 2010, Anco filed its third
amended complaint to add a claim against National Union for statutory
penalties under La.R.S. §§ 22:1892, 22:1973, asserting that National Union
had failed to participate timely in Anco’s defense of the underlying lawsuits.

       2 Per National Union’s internal operating procedure, the insured is required to specify
the policy under which it is seeking coverage when tendering a claim, otherwise it is “kicked-
back.”
       3 Mr. Spadacenta denied knowledge of having had this conversation with Mr. Nilson.

He claimed that the letter must have referred to the two policies that were noticed to National
Union in the Mason and Valdes lawsuits, both of which contained asbestos exclusions.
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      In December 2011, National Union filed a motion for partial summary
judgment, contending that it was not liable for any of Anco’s defense costs in
the underlying asbestos lawsuits; or, alternatively, that National Union was
not obligated to reimburse Anco or any of its other primary insurers for legal
fees or costs incurred prior to April 23, 2009 – the date on which Anco first
forwarded its asbestos lawsuits to National Union. Several months later, in
April 2012, National Union filed a motion for partial summary judgment on
Anco’s claim for statutory penalties, asserting that (1) National Union had
assumed its share of defense costs following Anco’s tender of the lawsuits in
2009; and (2) Anco had not suffered any loss that would entitle it to statutory
penalties.
      In February 2013, the district court granted National Union’s first-filed
motion for partial summary judgment, concluding that the record established
that Anco first tendered its claims under the Policy on April 23, 2009. Relying
on that date as the first tender of claims, the court ruled that Anco’s failure to
tender defense of the lawsuits to National Union timely constituted a breach
of the Policy’s requirement that Anco “immediately” forward any lawsuits to
National Union. The district court therefore held that National Union was not
obligated to reimburse Anco for any legal fees and costs it incurred in or after
1987 in the defense of approximately 2,700 asbestos lawsuits filed between
1987 and 2008.
      The district court also granted National Union’s motion for partial
summary judgment on Anco’s request for statutory penalties.            The court
reasoned that, as Anco had not shown that it suffered any loss from National
Union’s failure to participate in the defense, it could not recover penalties

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under Section 22:1892 for the lawsuits filed after April 23, 2009. 4 The court
also ruled in favor of National Union on Anco’s request for statutory penalties
under Section 22:1973(A), concluding that National Union’s alleged failure to
participate in Anco’s defense is not one of the six enumerated claims-
settlement practices that would constitute a violation of that statute.
       Anco,    along     with    Cross-Claimants-Appellants            Royal     Indemnity
Company, Zurich American Insurance Company, and American Guarantee &
Liability Insurance Company, timely appealed both rulings. 5 On appeal, Anco
contends that the district court erred (1) in holding that National Union is not
obligated to reimburse Anco for costs it incurred in defending lawsuits filed
between 1987 and 2008, because, Anco insists, a genuine dispute of material
fact exists as to the date that Anco first tendered the claims; and, (2) in denying
Anco’s request for Section 22:1892 penalties because, according to Anco, that
statute does not require it to show that it sustained losses to recover such
penalties.
                                    II.    ANALYSIS
A.     Standard of review
       We review a district court’s summary judgment de novo, applying the
same standards as the district court. We apply state substantive law when we
interpret an insurance policy, and we review the district court’s conclusions on
state law de novo. 6 Under Louisiana law, an insurance policy is a contract that
must be construed using the general rules of contract interpretation set forth
in the Civil Code; the court’s role is to determine the common intent of the

       4  The district court dismissed as moot Anco’s claim for statutory penalties relating to
lawsuits filed before April 23, 2009, because Anco had breached the Policy by failing to tender
those lawsuits timely to National Union.
        5 Cross-Claimant-Appellant Royal Indemnity does not join Anco’s appeal of the district

court’s ruling on Anco’s bad faith claims.
        6 Lamar Adver. Co. v. Cont’l Cas. Co., 396 F.3d 654, 659 (5th Cir. 2005).

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                                   No. 13-31313
parties. 7 An insurance policy may limit an insurer’s liability and impose and
enforce a reasonable condition on the policy obligations that the insurer
contractually assumes unless doing so conflicts with state law or public policy. 8
When interpreting Louisiana law, we are bound by this court’s prior
interpretation, so long as it has not been superseded by Louisiana case law or
statute. 9
B.    Partial summary judgment on duty to reimburse Anco for legal
      fees and costs
      As noted, National Union filed a motion for partial summary judgment
that it was not obligated to assume any of Anco’s defense costs in the
underlying asbestos lawsuits; or, alternatively, that it was not obligated to
reimburse Anco or its other primary insurers for any legal fees or costs
incurred prior to April 23, 2009 – the date on which Anco first forwarded its
asbestos lawsuits to National Union.          The district court granted National
Union’s motion, and Anco appeals that summary judgment on the following
grounds: (1) A genuine dispute of material fact exists as to the date that Anco
first tendered claims under the Policy; (2) even if Anco’s tender of the claims
was untimely, the district court erred in not excusing Anco’s tardiness; and, (3)
the court erred in concluding that Anco’s failure to tender claims timely under
the terms of the Policy relieved National Union of its defense obligations
because National Union did not claim that it was prejudiced by Anco’s late
tender.

      7  Cadwallader v. Allsate Ins. Co., 848 So. 2d 577, 580 (La. 2003).
      8  Henry v. S. La. Sugars Coop., Inc., 957 So. 2d 1275, 1277 (La. 2007) (internal
quotation marks omitted).
       9 Lamar, 396 F.3d at 663 n.8.

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                                      No. 13-31313
       1.     Anco’s April 23, 2009 tender of the underlying lawsuits
       The district court found that Anco first tendered the underlying lawsuits
to National Union on April 23, 2009 – a finding supported by Anco’s responses
to interrogatories. 10     Anco disputes this determination, claiming that the
district court improperly weighed the evidence and made credibility
determinations.
       Anco asserts that the following evidence creates a genuine dispute of
material fact as to the date that Anco first tendered the underlying claims to
National Union: (1) the testimony of Anco’s corporate representative, Mr.
Bourgeois, that Anco’s corporate practice was to forward all lawsuits to
National Union; (2) the reference to prior asbestos “claims” in a letter dated
August 2000, from Mr. Spadacenta, a claims adjuster for National Union,
acknowledging a tender of an asbestos claim; (3) Mr. Spadacenta’s letter dated
May 2000, acknowledging an asbestos-claim lawsuit that referred to “various
policies” and his letter dated August 2000 referring to the “above policies;” (4)
AIG Representative Robert Kuehn’s letter dated March 2000 requesting
permission to review Zurich’s files on Anco’s asbestos claims, constituting
evidence that National Union had received tenders of asbestos lawsuits; and,
(5) Anco’s counsel’s letter dated September 2000, apprising the AIG Toxic Tort
Claims Unit of the asbestos cases pending against Anco, as well as two follow-
up letters respectively dated January 24 and 25, 2001.
       We are satisfied that the district court did not err in rejecting this
evidence. First, although Mr. Bourgeois testified that it was Anco’s “practice”
to forward lawsuits to National Union as they were received, this testimony,

       10  Anco stated that it had provided National Union with two DVDs containing
approximately 2700 asbestos-related petitions on April 23, 2009 (“In April of 2009, copies of
all suits that have been served upon Anco as of that point in time were provided to counsel
for National Union on 2 DVDs”).
                                             7
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without any supporting documents or corroboration, is not sufficient to create
a genuine dispute of material fact. Second, evidence that Mr. Spadacenta
referred to prior asbestos “claims” in his letter acknowledging Anco’s tender of
an asbestos suit, or reference to “various policies” in another letter
acknowledging the tender of an asbestos claim, is not relevant to the question
whether Anco timely tendered its claims under the Policy.          Third, Robert
Kuehn’s letter of March 2000, in which he sought permission to review Zurich’s
files on Anco’s asbestos claims, does not refer to the Policy and is irrelevant to
the date of tender. The final items of evidence cited by Anco – its counsel’s
letter of September 18, 2000 and follow-up letters of January 24 and 25, 2001
– would present a dispute of material fact if they were tendered under the
Policy; however, those letters refer to Policy No. 9601699, not to the Policy. We
conclude that the district court properly deduced that Anco first tendered the
lawsuits on April 23, 2009.
      2.    Excusal of untimely tender
      The district court also rejected Anco’s alternative argument that its
untimely tender should be excused because National Union breached its duty
to investigate the claims. The court determined that Anco failed to point the
court to specific evidence that National Union made false representations
about Anco’s coverage or about the asbestos exclusion in the Policy. On appeal,
Anco asserts that if we affirm the district court’s finding that Anco first
tendered the lawsuits on April 23, 2009, we should hold that its own untimely
tender is nevertheless excused because: (1) Anco’s claims handling and bad-
faith expert testified that National Union “should have conducted a policy
search for all of the policies it sold Anco and identified them for Anco” when it
received the two tenders of asbestos lawsuits in 2000; (2) Mr. Bourgeois
testified that “at some stage [in the 1980s] I knew AIG said they had no
asbestos coverage under the policy;” and, (3) Mr. Spadacenta allegedly told Mr.
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Nilson, a Zurich employee, that Anco did not have asbestos coverage under its
primary policies.
      Our review of the record evidence satisfies us that the district court
correctly rejected Anco’s contention that its untimely tender should be excused.
Although Anco makes much of Mr. Cerone’s expert testimony that National
Union “should have” conducted a policy search when it received the tenders in
2000, 11 Anco does not cite any law for this proposition. As such, it is irrelevant
to the question of when Anco first tendered defense of its claims under the
Policy, and the district court properly discounted it.               Neither is Anco’s
contention that Louisiana law imposes a duty on National Union to conduct a
policy search on receipt of the tenders of the two asbestos-related lawsuits at
all persuasive. The case that Anco cites in support of this proposition – Vaughn
v. Franklin – presents facts that are easily distinguishable. In Vaughn, the
excess insurer was a named defendant in the lawsuit, and the co-insurer
possessed a copy of the policy under which it sought coverage. 12 In contrast,
National Union was not a named defendant in the underlying lawsuits, and
Anco was unaware that the Policy existed until it undertook discovery in its
declaratory judgment action.
      We further conclude that the district court properly determined that Mr.
Bourgeois’s testimony that National Union denied that it provided asbestos
coverage “sometime in the 80’s” did not create a material fact issue. There are
no contemporaneous documents, such as prior tenders under the Policy that
support this assertion. Neither is it consistent with the record as a whole.
“[S]peculation, improbable inferences, unsubstantiated assertions, and legalist
argumentation do not adequately substitute for specific facts showing a

      11 There is no record of the actual tenders from Anco to National Union regarding the
Mason and Valdes lawsuits; only Mr. Spadacenta’s letters acknowledging them.
      12 Vaughn v. Franklin, 785 So. 2d 79, 82 (La. Ct. App. 2001).

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                                         No. 13-31313
genuine issue for trial.” 13 Furthermore, Mr. Nilson’s letter of August 16, 2000,
in which he relates a conversation with Mr. Spadacenta, does not tend to show
that National Union misrepresented coverage. Mr. Spadacenta testified that
the policies he referred to in the August 16, 2000 letter were the ’94, and ‘95
policies – those that he had listed when he acknowledged the tenders of the
two claims in 2000.            We are satisfied that the district court correctly
determined that Anco’s failure to tender its claims timely pursuant to the
terms of the Policy should not be excused.
      3.        Breach of duty to tender claims timely
      The district court found that Anco first tendered the lawsuits under the
Policy on April 23, 2009, and ruled that Anco’s untimely tender was not
excusable. Relying on this, the court concluded that National Union was not
obligated to reimburse Anco for any of legal costs that it incurred before April
23, 2009, and that related back to defending asbestos-related lawsuits filed
between 1987 and 2008. The court proceeded to determine that National
Union was not required to reimburse Anco for any costs incurred on or after
April 23, 2009, for lawsuits filed between 1987 and 2008, because Anco had
breached the “timely notice” provision of the Policy. Anco challenges this
determination on appeal, asserting that Louisiana law requires that, before
avoiding coverage, an insurer must demonstrate that it suffered prejudice from
its insured’s late tender; and that National Union never asserted that it was
prejudiced by Anco’s untimely tender.
      The general rule in Louisiana is that when “the requirement of timely
notice is not an express condition precedent [to insurance coverage], the
insurer must demonstrate that it was sufficiently prejudiced by the insured’s

      13   Oliver v. Scott, 276 F.3d 736, 744 (5th Cir. 2002).
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                                       No. 13-31313
late notice” in order to deny coverage. 14 This general rule, however, is subject
to an exception: When timely notice is an express condition precedent to
coverage, “Louisiana law enforces provisions of insurance contracts which
require notice as a condition precedent without also requiring the insurer to
make a particular showing of prejudice.” 15 In MGIC Indemnity Corporation v.
Central Bank of Monroe, Louisiana, we analyzed a line of Louisiana cases
following Hallman v. Marquette Casualty Company and Payton v. St. John,
and concluded that, when a policy requires the insured to comply “fully” with
all the terms of the policy as a “condition precedent” to coverage, and, the policy
obligates the insured to notify the insurer immediately after a claim is made
or suit is brought against the insured, the insured’s failure to notify the insurer
of the lawsuit promptly relieves the insurer of any obligation for costs expended
by the insured in defending the action. 16
       Again, the district court found that Anco first tendered defense of the
underlying lawsuits on April 23, 2009.                The Policy required that Anco
“immediately” forward any claims, suits, or process received by Anco, and
stated that “[n]o action shall lie against the company unless, as a condition
precedent thereto, there shall have been full compliance with all of the terms
of this policy.” 17 In line with our precedent and that of the Louisiana courts,
we hold that Anco’s failure to comply with the notice provision of the policy

       14 Peavey Co. v. M/V ANPA, 971 F.2d 1168, 1173 (5th Cir. 1992).
       15 MGIC Indem. Corp. v. Cent. Bank of Monroe, La., 838 F.2d 1382, 1386 (5th Cir.
1988) (emphasis supplied); see also Jackson v. Transp. Leasing Co., 893 F.2d 794, 795 (5th
Cir. 1990).
       16 MGIC, 838 F.2d at 1386, id. at 1387 (“Louisiana cases involving ‘condition

precedent’ or similar language . . . support the proposition that no recovery can be claimed
where timely notice has not been given.”); see Payton v. St. John, 188 So. 2d 647, 652 (La. Ct.
App. 1966).
       17 Emphasis supplied.

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                                       No. 13-31313
precludes coverage of its untimely tendered lawsuits. 18 Moreover, because
Louisiana law does not require an insurer to demonstrate prejudice as a result
of late tender when timely notice is a condition precedent to coverage, we reject
Anco’s contention that the district court erred in not requiring National Union
to show prejudice. Rather, the district court correctly determined that Anco
breached the terms of the Policy by failing to tender its claims immediately.
Neither did the district court err in concluding that Anco’s failure to comply
with the timely notice provision relieved National Union of its obligation to
reimburse Anco for costs incurred on or after April 23, 2009 in defending
lawsuits filed between 1987 and 2008.
C.     Statutory penalties
       National Union filed another motion for partial summary judgment in
opposition to Anco’s claim for statutory penalties under La.R.S. §§ 22:1892 and
22:1973, asserting that (1) National Union had assumed its share of defense
costs following Anco’s tender of the lawsuits in 2009, and (2) Anco had not
suffered any loss that would entitle it to statutory penalties. The district court
granted National Union’s motion because: (1) Anco failed to plead any conduct
that would constitute a violation of Section 22:1973(A), and (2) Anco could not
recover penalties under Section 22:1892(B)(1) for the lawsuits filed after April
23, 2009 because it failed to show that it suffered any “actual damages”
resulting from National Union’s alleged failure to participate timely in Anco’s

       18 See Hallman v. Marquette Cas. Co., 149 So. 2d 131, 135-137 (La. Ct. App. 1963) (“One
of the terms of the contract herein concerned is that, as a condition precedent to an action
against the insurer, the insured shall have fully complied with all of the terms of the policy,
one of which is that he shall immediately forward to the company every demand, notice,
summons, or other process received by him or his representative.”); see also Joslyn Mfg. Co.
v. Liberty Mut. Ins. Co., 30 F.3d 630, 634 (5th Cir. 1994) (observing that the “balance of
equities” approach endorsed by the Louisiana Supreme Court in Jackson v. State Farm
Mutual Automobile Insurance Company, 29 So. 2d 177 (La. 1946), does not apply when “both
parties are sophisticated businesses, which are expected to be conversant with the terms of
their contracts”); MGIC, 838 F.3d at 1387 (same).
                                              12
                                      No. 13-31313
defense. On appeal, Anco challenges the district court’s determination that it
must show “actual damages” to recover under Section 22:1892, contending
that, under the Louisiana Supreme Court’s decision in Oubre v. Louisiana
Citizens Fair Plan, 19 it is not required to do so.
      1.     Section 22:1892(A)(1)
      The law governing this inquiry, Section 22:1892(A)(1), states that “all
insurers . . . shall pay the amount of any claim due any insured within thirty
days after receipt of satisfactory proofs of loss from the insured.” A party
seeking statutory penalties under this statute is required to establish that: (1)
The insurer received satisfactory proof of loss, (2) the insurer failed to pay the
claim within thirty days, and (3) the insurer’s failure to pay the claim was
arbitrary and capricious. 20 The insured must prevail on all three prongs to
recover a Section 22:1892(B)(1) penalty of the greater of fifty percent of the loss
or one thousand dollars. 21
      As an initial matter, the district court ruled that Anco’s request for
statutory penalties relating to underlying lawsuits filed between 1987 and
2008, which were tendered to National Union on April 23, 2009, was moot
because the court had dismissed those claims with prejudice. The court then
turned to those of the underlying lawsuits that were filed in or after the year
2009. Anco claimed that it had tendered approximately 65 asbestos-related
lawsuits under the Policy between January 2009 and March 2010, and alleged
that National Union had not timely begun to participate in Anco’s defense,
despite having made “some response” to the tenders.
      The district court accepted Anco’s contention that National Union failed
to point to evidence that would “demonstrate that it provided a defense to Anco

      19 79 So. 3d 987 (La. 2011).
      20 Dickerson v. Lexington Ins. Co., 556 F.3d 290, 297 (5th Cir. 2009).
      21 LA. REV. STAT. ANN. § 22:1892(B)(1) (2012) (emphasis supplied).

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                                       No. 13-31313
within thirty days after receipt of satisfactory proofs of loss,” and ruled that
genuine issues of material fact existed on this element of Anco’s claim. The
court did not make any specific finding, however, as to whether Anco provided
a satisfactory proof of loss to National Union. 22 Putting aside this dispute of
material fact, the court noted that Anco had not cited any specific evidence that
it had incurred out-of-pocket costs in defending the underlying lawsuits. The
court therefore ruled in favor of National Union on the ground that Anco failed
to show that it had suffered actual damages and thus could not recover Section
22:1892 penalties in relation to the underlying lawsuits filed in or after 2009.
       2.     Satisfactory proof of loss
       Before we address Anco’s contention on appeal that the district court
erred in requiring it to demonstrate actual damages, we address National
Union’s assertion that Anco failed to adduce proof of loss sufficient to
commence the thirty-day period in which to pay the claim. Anco pleaded that
it “tendered [65 asbestos lawsuits] for a defense” to National Union in its
amended complaint for statutory penalties, but did not allege that this tender
constituted proof of loss.          National Union points to testimony that its
representative placed Anco’s bills for defense costs in line for payment
pursuant to the proportional sharing agreement with the other insurers, and
highlights the district court’s statement that the record is “[de]void of any
billing records, expense reports, copies of checks, or receipts” that would
demonstrate Anco incurred damages. Anco does not respond to this assertion,
but repeats its contention that the district court erred in its interpretation of
Section 22:1892(B)(1).

       22 The district court’s analysis conflated the first and second prongs of the test, which
require that the insured demonstrate: (1) The insurer received satisfactory proof of loss, and
(2) the insurer failed to pay the claim within thirty days. The insurer need only receive
information sufficient to trigger it to act on the claim to be found to have received proof of
loss. See Richardson v. GEICO Indem. Co., 48 So. 3d 307, 314 (La. Ct. App. 2010).
                                              14
                                       No. 13-31313
       Section 22:1892 does not define what constitutes a “satisfactory proof of
loss.” As the Louisiana Supreme Court recently stated, though, “[i]t is well
settled that a ‘satisfactory proof of loss’ is only that which is ‘sufficient to fully
apprise the insurer of the insured’s claims.’” 23 Although satisfactory proof of
loss must include the extent of damages, Louisiana has “adopted liberal rules
concerning the lack of formality relative to proof of loss.” 24 So long as the
insurer obtains sufficient information to act on the claim, the manner in which
it obtains the information is immaterial. 25 Whether an insured satisfactorily
bears its burden of proving “satisfactory proof of loss” is a question of fact that
Louisiana courts review for manifest error. 26
       Our inquiry is complicated by the district court’s failure to make a
specific finding on whether Anco bore its burden on satisfactory proof of loss.
The court ruled that a question of fact existed as to whether National Union
provided a defense within thirty days following receipt of satisfactory proof of
loss, but did not explicitly find that Anco had submitted satisfactory proof of
loss. On appeal, National Union contends that, because the district court
determined that Anco had not submitted any billing records or expense reports
which would support a finding that it had sustained actual damages, we should
infer that Anco failed to provide proof of loss sufficient to commence the
running of the thirty-day period. We disagree. Proof of loss is a “question of
fact.” We may not convert the court’s finding regarding Anco’s failure to submit
proof of actual losses to a finding that Anco failed to bear its burden of

       23 La. Bag Co., Inc. v. Audubon Indem. Co., 999 So. 2d 1104, 1119 (La. 2008).
       24 Richardson, 48 So. 3d at 314; see Youngblood v. Allstate Fire Ins. Co., 349 So. 2d 462,
465 (La. Ct. App. 1977) (holding that a satisfactory proof of loss need not be in writing).
       25 Versai Mgmt. Corp. v. Clarendon Am. Ins. Co., 597 F.3d 729, 739 (5th Cir. 2010)

(internal quotation marks omitted).
       26 See Boudreaux v. State Farm Mut. Auto. Ins. Co., 896 So. 2d 230, 236 (La. Ct. App.

2005).
                                              15
                                       No. 13-31313
producing satisfactory proof of loss. Although Anco’s “tender for defense” of
the underlying claims might not constitute satisfactory proof of loss, even
under Louisiana’s “liberal rules,” whether Anco carried its burden on proof of
loss is a question of fact which we cannot decide on this record. 27 Nevertheless,
as we hold that the district court properly concluded that, to recover statutory
penalties, Anco was required to show it suffered actual damages – as we
explain below – we decline to remand the case for the trial court to determine
whether Anco bore its burden of satisfactory proof of loss.
       3.     Actual damages
       Anco’s principal contention on appeal is that the district court erred in
holding that it could not recover statutory penalties under Section
22:1892(B)(1) because it failed to show that it had sustained any losses. The
law is ambiguous on this question. The district court relied on Vaughn v.
Franklin, in which the Louisiana First Circuit Court of Appeal held that an
insured is not entitled to recover Section 22:1892(B)(1) penalties from a co-
insurer that fails to participate timely in the defense of the underlying lawsuit:
“While [the co-insurer] acted arbitrarily in failing to provide a defense, the
insureds were not harmed.” 28 In reversing the trial court’s award of penalties,
the appellate court noted that “[i]f the legislature had intended to punish
insurance companies that failed to share defense costs, it could have done so –
but it did not.” 29
       On appeal here, Anco contends that Louisiana courts now hold that
actual damages are not a predicate to recovering Section 22:1892(B)(1)
penalties, pointing us to the Louisiana Supreme Court’s decision in Oubre v.
Louisiana Citizens Fair Plan.              National Union argues that Oubre is

       27 See Richardson, 48 So. 3d at 314.
       28 See 785 So. 2d 79, 91 (La. Ct. App. 2001).
       29 Id.

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inapplicable because it reviewed the imposition of penalties under a different
statute, viz., Section 22:1973(C). Agreeing with National Union, we reject
Anco’s contention that Oubre permits the imposition of penalties for a violation
of Section 22:1892(A)(1) under the instant facts. In Oubre, the court reviewed
whether the statutory penalty for violating Section 22:1892(A)(3) – which
relates to catastrophic property damage – is capped at five thousand dollars in
the absence of proving actual damages. The court looked first to Sultana
Corporation v. Jewelers Mutual Insurance Company, wherein it had held that
an insured is not required to prove that it suffered actual damages as a
prerequisite to recovering Section 22:1973(C) penalties. 30               Because the
statutory penalty for violating Section 22:1892(A)(3) is contained in Section
22:1973(C), the court relied on Sultana, as well as its own statutory
construction, to hold that the five thousand dollar cap acts as a ceiling when
damages are not proved.
      Oubre is distinguishable from the instant case, which concerns the
imposition of discretionary penalties under a different statute, Section
22:1892(B)(1). Oubre examined Section 22:1973(C), which provides that, “[i]n
addition to any general or special damages to which a claimant is entitled . . .
the claimant may be awarded penalties assessed against the insured in an
amount not to exceed two times the damages sustained or five thousand
dollars, whichever is greater.” 31      By contrast, Section 22:1892(B)(1) – the
applicable penalty provision for National Union’s alleged violation of Section
22:1892(A)(1) – states that any such violation “shall subject the insurer to a
penalty, in addition to the amount of the loss, of fifty percent damages on the
amount found to be due from the insurer to the insured, or one thousand

      30  860 So. 2d 1112, 1119 (La.2003); see also Audubon Orthopedic & Sports Med., APMC
v. Lafayette Ins. Co., 38 So. 3d 963, 974 (La. Ct. App. 2010).
       31 LA. REV. STAT. ANN. § 22:1973(C) (2012) (emphasis supplied).

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dollars, whichever is greater.” 32 Although we recognize that both Section
22:1892 and Section 22:1973 cover an insurer’s duty to timely pay claims if
required under the terms of a policy, 33 their penalty provisions are
distinguishable. The plain language of Section 22:1892(B)(1) contemplates the
award of a penalty “in addition” to the amount of the actual loss. 34 Moreover,
the imposition of penalties under Section 22:1973(C) is discretionary, unlike
those under Section 22:1892, which are mandatory: An insurer’s violation of
Section 22:1892 “shall subject the insurer to a penalty, in addition to the
amount of loss.” 35 Anco fails to point us to any law – and we have found none
on our own – which suggests that we could or should extend the rule announced
in Oubre to cover Anco’s proposed award of penalties under Section
22:1892(B)(1). As we hold that the district court correctly ruled that Anco’s
failure to submit evidence that it sustained actual losses as the result of
National Union’s alleged failure to contribute to defense costs precluded Anco’s
claim for Section 22:1892 statutory penalties, we affirm the court’s grant of
partial summary judgment.

       32 LA. REV. STAT. ANN. § 22:1892(B)(1) (2012) (emphasis supplied).
       33 See Reed v. State Farm Mut. Ins. Co., 857 So. 2d 1012, 1020 (La. 2003).
       34 Emphasis supplied. We acknowledge that Section 22:1973(C) contemplates

awarding a statutory penalty “in addition to any general or special damages,” which is similar
to the formulation in Section 22:1892(B)(1). Because the penalty is mandatory in Section
22:1892(B)(1), however, as opposed to the discretionary penalty contemplated in Section
22:1973(C), we conclude that this similar – yet not identical – formulation of a penalty does
not control our result. Furthermore, we recognize that Louisiana courts have consistently
held that Section 22:1892(B)(1) is “penal in nature and is strictly construed.” See Sanders v.
Wysocki, 631 So. 2d 1330, 1335 (La. Ct. App. 1994). As such, we shall not read requirements
into the statute outside of its plain language. See State v. Bedford, 838 So. 2d 758, 760 (La.
2003) (“[T]he legislature is presumed to act with full knowledge of well-settled principles of
statutory construction.”).
       35 See Sultana Corp., 860 So. 2d at 1117 (distinguishing Sections 22:1892 and 22:1973

on the grounds that the former provided for a mandatory penalty, but the latter provides for
a discretionary award).
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                    III.    CONCLUSION
The judgment of the district court is AFFIRMED.

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