MAX N. TOBIAS, JR., Judge.
The defendant/appellant, Pacific Insurance Company, Limited ("Pacific"),
The plaintiffs own a number of truck stops in the New Orleans area, including the Mardi Gras Truck Stop ("the Mardi Gras"), located at 2411 Elysian Fields Avenue, and the Big Easy Truck Stop ("the Big Easy"), located at 5000 Old Gentilly Highway. Both businesses include fuel pumps, convenience stores, and video poker casinos. As a result of Hurricane Katrina, the properties were damaged from and by both flood and wind. It is undisputed that the flood waters reached a minimum of four feet at each location.
The plaintiffs filed suit against Pacific, arguing that, while the amounts due were paid under the policy, these amounts were not paid timely as required by law.
The court issued an amended and restated judgment on 3 March 2011 following a hearing on motions for new trial filed by both parties.
We begin our analysis with the issue of whether Pacific made timely payments under the insurance contract and under applicable state law. If its payments were timely, then our analysis need go no further.
The record reveals the following timeline taken, in part, from the reports by Gary Steen ("Steen"), an independent adjuster with Axis International, Inc. ("Axis"), hired to adjust the claims for Pacific.
2005
• 29 August Hurricane Katrina strikes the New Orleans area.
• 16 September First notice of claim by plaintiffs to Pacific.
• 23 September First notice of claim by Pacific to Steen.
• 28 October Advance of $50,000 by Pacific for each property on wind-damage claim.
• 31 October Madsen, Kneppers & Associates ("MKA") hired by Pacific (through Axis)
as construction consultants.
• 23 November Estimate of $1,467,853.17 to repair the Big Easy by Bruce Frazier of the
Alliance Consulting Group, L.L.C. ("Alliance") public adjusters hired by
the plaintiffs; Matthew Adrian ("Adrian") of Matson, Driscoll & Damico
("MDD"), forensic accountants, hired by Pacific (through Axis) to assist in
the evaluation of the loss of business income ("BI") claim.
• 28 November Letter from MDD to plaintiffs' attorneys requesting financial information
supporting the Mack report prepared by Kenneth Mack ("Mack").8
• 14 December Estimates to repair the Mardi Gras by Alliance: an aggregate amount of
$340,235.92 (comprising separate amounts of $283,379.89 + $51,497.42 +
$5,358.61); estimate from MKA to repair the Big Easy of $715,764.87.
• 18 December Actual Cash Values ("ACV") repair cost analyses by MKA for plaintiffs' properties. • 21 December Estimate by MKA to repair the Mardi Gras of $321,002.80. 2006 • 17 January Letter from MDD to Mack requesting financial information supporting his report, similar to the 28 November 2005 letter. • 23 January Authority requested to secure an ACV Proof of Loss for $865,827.87 with a Replacement Cost Coverage ("RCC") Holdback of $288,135.01; plaintiffs provided a loss of BI claim to Adrian of MDD of $866,000; agreed at two-month period of restoration. • 31 January Flood estimates for both properties completed by the flood insurer. • 17 February Report from MDD addressing the interim BI loss without application of coinsurance provision. • 27 February Preliminary report from MDD with proposed BI claim for three months of $109,979, subject to coinsurance of 100 percent. Pacific advances an additional $75,000 per property for wind-damage. • 28 February Letter from MDD to Mack requesting financial information supporting his report, similar to the 17 January 2006 letter. • 1 March Large Loss Notice completed by Karkos and forwarded to a home office property consultant; internal email questions ACV in order to apply the 90% coinsurance. • 8 March Letter from Steen to Alliance attaching preliminary report from MDD to show coinsurance penalty of 100% for loss of BI. • 24 March Replacement Cost Values ("RCV") from MKA for plaintiffs' truck stops; coinsurance requirements not yet applied. • 28 March Karkos confirms that Big Easy conforms to the 90% coinsurance requirement, but still needs ACV valuation for the Mardi Gras. • 13 April Steen sends Alliance letter correcting values at risk for the properties; MDD report showing loss of BI for five months at $219,866. • 17 April Email from Karkos to Steen advising that (1) Steen used incorrect values for the buildings that were damaged and (2) MDD should increase indemnity period for an additional three months (now eight months total). • 18 April Karkos requests authority to settle the claims for wind damage to the properties. • 9-10 May Pacific pays wind related property damage claims. • 8 June Steen emails Alliance acknowledging receipt of signed and sworn ACV proofs of loss for building damage. Report from Steen to Karkos stating that the public adjuster was requesting payment of the undisputed portion of BI loss; Steen requests authority to pay $144,866. • 28 July Initial payments of $114,581 (the Mardi Gras) and $85,419 (the Big Easy) for loss of BI claims. • 9 November MDD final report on loss of BI for both properties allowing an eight-month period of indemnity. • 14 December Letter from Steen to Karkos transmitting the signed and notarized proof of loss for the replacement and cost holdbacks for the Big Easy.2007 • 9 January Final payment of $298,317 for loss of BI claims for both properties.2009 • 2 September Report by Mack recalculating the loss of BI and coinsurance per income statements for 31 July 2005, 31 December 2005, and 31 December 2006.
Pacific contends that it could not have paid the wind-related loss claim any earlier than 17 April 2006, the date on which it had sufficient information to do so; therefore, the payments on 9 and 10 May 2006 were timely. On the other hand, the plaintiffs argue that Pacific had satisfactory proofs of loss on 13 and 18 December 2005, when MKA gave estimates to Pacific. Thus, the plaintiffs claim those May 2006 payments were untimely and prevented them from rebuilding in a timely manner and reopening sooner. We do not agree with either the plaintiffs or Pacific.
The Pacific insurance policy issued to the plaintiffs states that one of the duties of the insured following loss or damage to the covered property is to "send a signed, notarized proof of loss" containing the information requested by Pacific to investigate the claim within 60 days after the insurer's request. We do not find such a request from Pacific in the record for this claim.
La. R.S. 22:658 provides, inter alia:
La. R.S. 22:1220,
La. R.S. 22:658 A(1)'s prohibited conduct "is virtually identical to the conduct prohibited in LSA-R.S. 22:1220 B(5): the failure to timely pay a claim after receiving satisfactory proof of loss when that failure to pay is arbitrary, capricious, or without probable cause." Reed v. State Farm Mut. Auto. Ins. Co., 03-0107, p. 12 (La.10/21/03), 857 So.2d 1012, 1020, citing Calogero v. Safeway Ins. Co. of Louisiana, 99-1625, p. 7 (La.1/19/00), 753 So.2d 170, 174. These statutes are penal in nature and must be strictly construed. Id. "One who claims entitlement to penalties and attorney fees has the burden of proving the insurer received satisfactory proof of loss as a predicate to a showing that the insurer was arbitrary, capricious, or without probable cause." Ullah, Inc. v. Lafayette Ins. Co., 09-1566, pp. 14-15 (La.App. 4 Cir. 12/17/10), 54 So.3d 1193, 1202. The plaintiff also has to show a lack of compliance within the applicable time periods. See La. R.S. 22:658 and La. R.S. 22:1220. "The phrase `arbitrary, capricious, or without probable cause' is synonymous with `vexatious,' and a `vexatious refusal to pay' means `unjustified, without reasonable or probable cause or excuse.'" Louisiana Bag Co., Inc. v. Audubon Indem. Co., 08-0453, p. 14 (La.12/2/08), 999 So.2d 1104, 1114, quoting Reed, supra at pp. 13-14, 857 So.2d at 1021.
Moreover, the statutory penalties are inappropriate when the insurer has a reasonable basis to defend the claim and was acting in good-faith reliance on that defense. Rudloff v. Louisiana Health Serv. & Indem. Co., 385 So.2d 767 (La. 1979). This is especially true where a reasonable and legitimate question exists as to the extent and causation of a claim; bad faith should not be inferred from an insurer's failure to pay within the statutory time limits when such reasonable doubts exist. Fontana v. Louisiana Sheriffs' Automobile Risk Program, 96-2752 (La.App. 1 Cir. 6/20/97), 697 So.2d 1037, 1040; Patin v. Imperial Lloyds Ins. Co.,
We recognize that the determination of whether an insurer acted in bad faith turns on the facts and circumstances of each case, because a prerequisite to any recovery under the statute is a finding that the insurer not only acted (or failed to act), but did so arbitrarily, capriciously, and without probable cause. As this determination is largely factual, great deference is accorded the trier-of-fact. Smith v. Audubon Ins. Co., 95-2057, p. 9 (La.9/5/96), 679 So.2d 372, 377.
The question then is what constitutes a "satisfactory proof of loss from the claimant." Courts have defined it as follows: "Satisfactory proof of loss ... is that which is sufficient to
Pacific contends that the earliest it was able to pay the claim was 17 April 2006. The primary delay was the late calculation of the coinsurance penalty that was contingent upon ACV determinations by Pacific. While the parties agree that the coinsurance penalty is 90%, Karkos admitted at trial that these calculations are usually done at the start of the adjusting period, rather than at the end. This delay cannot be attributed to the plaintiffs.
Coinsurance is defined by Couch on Insurance § 1.3 as:
The coinsurance percentage is found is found on the Supplemental Declarations Page of the Pacific policy. The Supplemental Declarations Page provides for a coinsurance percentage of 90% for damage to the building and business personal property and 100% for BI and extra expense.
The Pacific policy in question was drafted by Insurance Services Office, Inc., ("ISO"), and is a standard form commercial property insurance policy. The ISO policy contains a coinsurance provision that applies in accordance with the applicable coinsurance percentage shown in the declarations page. The operation of this provision effectively requires the insured to purchase a limit of insurance equal to the specified percentage of its full value. If, at the time of the loss, the limit of insurance specified in the declarations page is less than the amount required under the coinsurance provision, the loss recovery will be limited to a coinsurance percentage of the loss that is determined by using a ratio equal to the insurance amount carried to the insurance amount required. However, if the application of the coinsurance formula results in a figure that exceeds the applicable limit of insurance for the loss, the limit of insurance is the maximum amount that will be paid.
The late calculation of the coinsurance provision was hampered by a change of the building value to loss ratio. The plaintiffs' policy renewed one week before Hurricane Katrina, in which the building values were increased. Apparently, the new policy had not been written and/or transmitted to Pacific at the time the claim was filed; Karkos had only the prior year's values from which to work while adjusting the claim. We agree that this was an error on Pacific's
Further, as we stated in Daney v. Haynes, 630 So.2d 949, 954 (La.App. 4th Cir.1993),
The case law reveals that where a reasonable disagreement between the insured and the insurer as to the amount of a loss exists, the insurer's refusal to pay is not arbitrary, capricious, or without probable cause, and failure to pay within the statutory delay does not subject the insurer to penalties. Sibley v. Insured Lloyds, 442 So.2d 627, 632 (La.App. 1st Cir.1983). However, as recognized by this court in Warner v. Liberty Mut. Fire Ins. Co., 543 So.2d 511 (La.App. 4th Cir.1989):
On the other hand, we cannot agree with the plaintiffs on the date that a satisfactory proof of loss was received by Pacific. Although MKA submitted its reports to Pacific in December 2005, it is unreasonable to think that Pacific could be fully apprised of the plaintiffs' claims in light of the enormity and scope of the damage. Of course, Pacific would want to be sure that it wasn't paying for any flood damage, which was substantial. The flood insurer's estimates are dated 31 January 2006; we find Pacific well within its rights to review and compare its preliminary estimates against those of the flood insurer based upon the facts of this case.
We find that the 30-day period began to run no later than 1 March 2006, the date that Pacific received the Large Loss Notice. Pacific had, or should have had, all the information it needed to determine the plaintiffs' loss at that time. In any event, as determined by the trial court, the final payments of $190,348 for the Mardi Gras and $415,974 for the Big Easy made by Pacific on 9-10 May 2006 were untimely.
We find, however, that the trial court erred by applying the penalties found in La. R.S. 22:1220 (up to two times the damages sustained) to damages falling under La. R.S. 22:658(25%). As such, we reverse that part of the judgment and will recalculate the appropriate penalty.
Pursuant to La. R.S. 22:658, we apply a 25% penalty to these late payments ($606,322); the total amount of the penalty is
We now turn to the late payment of the BI loss.
Id., p. 5, 988 So.2d at 192-93 (quoting Huggins v. Gerry Lane Enterprises, Inc., 06-2816 (La.5/22/07), 957 So.2d 127, 128-29).
The Pacific policy, in Endorsement CP 00 30 10 00, entitled "
This endorsement further provides:
The policy provides for 100% coinsurance for both BI and extra expenses and
The general purpose of BI insurance is to protect the earnings which the insured would have enjoyed had no interruption or suspension occurred. Yount v. Lafayette Ins. Co., 08-0380, p. 14 (La.App. 4 Cir. 1/28/09), 4 So.3d 162, 171. Moreover, as a general rule, damages for loss of profits may not be based on speculation and conjecture; however, such damages need be proven only within reasonable certainty. Cox Communications v. Tommy Bowman Roofing, LLC, 04-1666, p. 8 (La.App. 4 Cir. 3/15/06), 929 So.2d 161, 166-67, citing Lavigne v. J. Hofert Co., 431 So.2d 74, 77 (La.App. 1st Cir.1983). Broad latitude is given in proving lost profits because this element of damages is often difficult to prove and mathematical certainty or precision is not required. Id., citing Louisiana Farms v. Louisiana Dept. of Wildlife and Fisheries, 95-845, p. 36 (La.App. 3 Cir. 10/9/96), 685 So.2d 1086, 1105.
When substantial, reasonable, and legitimate questions exist as to the extent of an insurer's liability or an insured's loss, the insurer's failure to pay within the statutory time period is not arbitrary, capricious, or without probable cause. Louisiana Bag Co., Inc., supra, 08-0453, pp. 14-15, 999 So.2d at 1114. Because of the extensive flood damage to the buildings in question, Pacific had to confirm that it was paying for lost BI caused solely by wind.
The plaintiffs used Mack as their expert and Pacific used Adrian of MDD as its expert in order to calculate the plaintiffs' BI claim. Both experts testified at the trial.
Mack testified that, in his opinion, after applying the coinsurance percentage, the BI loss for the Mardi Gras was $497,873, and the BI loss for the Big Easy was $525,592. The calculation was for a total of eight months, as instructed by Pacific.
Mack testified that for the seven months before the storm, the average monthly net profit for the Big Easy was $48,243 and $74,125 for the Mardi Gras. He then looked at the reports of another casino owned by the plaintiffs, Stan's Truck Stop ("Stan's") in New Orleans East, before and
In calculating the coinsurance penalty, Mack used the net income from the 31 July 2005 statements plus all expected continuing expenses. From that calculation, he arrived at a total insurance needed for seven months of $847,000 for the Mardi Gras and $715,000 for the Big Easy. In his opinion, the Mardi Gras should have been insured for $1.5 million per year and the Big Easy should have been insured for $1.2 million per year. The total insurance needed was divided by the total insured value, resulting in a coinsurance percentage for the Mardi Gras of 52.75%. Because the Mardi Gras was underinsured by 47.25%, he reduced the amount of the total loss by that percentage; conversely, the plaintiffs could only recover 52.75% of the actual loss sustained. For the Big Easy, the total coinsurance percentage was 70.48%; thus he reduced the total loss by 29.5%.
The primary issue under cross-examination was Mack's determination of "operating expenses" for the purpose of applying the coinsurance provision.
Pacific relied on the testimony of Adrian, who, as admitted by Mack, followed the policy when making his calculations. Adrian testified that his purpose in making an analysis of coinsurance compliance was to determine if the BI loss was insured to value. That means that the policyholder needed to have enough insurance to satisfy the value, which would be the net income plus operating expenses, including payroll, which would have been earned during the 12 months following the policy inception. He further testified:
As calculated by Adrian, the insured-to-value number for the Mardi Gras was $3,182,380; in other words, the Mardi Gras should have carried that amount of insurance to properly insure itself for the BI
Adrian testified that he did not agree with Mack's application of the coinsurance provision. By excluding all or most of the operating expenses, primarily payroll, the insured-to-value number would be much lower, resulting in higher collectible loss ratio.
After reviewing the policy and the testimony of Mack and Adrian, we find the trial court erred and was manifestly erroneous by relying on Mack's testimony. He conceded that the more money the plaintiffs collect in BI, the more money he stands to earn as his fee. Such an arrangement is clearly improper and against public policy for public adjusters. See La. R.S. 22:1705, supra, at n. 13; Op. Atty. Gen., No. 06-0282 (March 23, 2007), 2007 WL 1100708. Clearly, this bias must be taken into account when determining the weight given to Mack's testimony. More importantly, however, Mack admitted under oath that he did not follow the instructions of the policy while Adrian did; in other words, he testified that he ignored the clear and unambiguous language of the insurance policy, while he admitted that Adrian followed the policy's mandates. As such, his testimony should not have been considered.
It is undisputed that the plaintiffs were paid a total of $498,317 for the loss of BI for both locations under the policy for a total of eight months. Returning to the timeline, we agree that the initial payment of $200,000 was untimely. On 13 April 2006, Adrian submitted a report showing the loss of BI for five months at $219,866; four days later, Steen instructed Adrian to increase the indemnity period an additional three months. Therefore, $200,000 of the BI claim was undisputed and should have been paid within 30 days; instead, it was paid on 28 July 2006 and was untimely. It is uncontested by the plaintiffs that the payment by Pacific of $298,317 on 9 January 2007 was timely. Thus, penalties must be calculated under La. R.S. 22:658 on the sum of $200,000, as it was due under the policy; this amount is not consequential damage as envisioned by La. R.S. 22:1220. We find that the penalties due total to $50,000.
We now turn to the consequential damages, if any, incurred by the plaintiffs if the May 2006 payments for their wind-damage claims had been timely. In other words, the plaintiffs contend that the businesses could have been fully renovated and running by the end of April 2006, the end of the agreed eight-month period of restoration. The trial court found that because of Pacific's delays, the Mardi Gras did not become fully operational until September 2006 (four months later) and the Big Easy
As Karkos testified, on 4 July 2006, he received an email from Steen, which stated in pertinent part:
No evidence exists in the record on appeal that the Mardi Gras could have reopened at the end of April 2006, since electricity was not available at this location until early June 2006, that being the earliest date for reopening. As for the Big Easy, one of Steen's reports to Karkos, dated 31 October 2006, states that the plaintiffs have "repeatedly requested
Another delay was caused by the fact that the plaintiffs were severely underinsured for the loss of BI. John Callegari, Chief Financial Officer for the plaintiffs, testified:
Further delays were caused by the plaintiffs' banks. Callegari testified that many of the checks named both the plaintiffs and their bank that held the mortgage as payees. The bank, as lender, required the plaintiffs to demonstrate that they had completed and paid for repairs prior to releasing the funds from their accounts to cover those repairs. In other words, the plaintiffs had to find the money to pay for the repairs before they were reimbursed with the money paid by Pacific. Callegari conceded that these delays were not attributable to Pacific.
Pacific argues that an additional delay was caused by the plaintiffs using their flood proceeds for purposes other than repairing the substantial flood damage caused to the buildings. The plaintiffs contend that the issue is the amount of money coming in late 2005 and January 2006, not in late April 2006.
It is undisputed that the video poker machines at the properties in question were owned by a related company, Lets Go, and were not insured at the time of Hurricane Katrina. Callegari testified that some of the insurance proceeds, flood or wind, were used to replace the video poker machines, although most of that money was obtained from various investment accounts of plaintiffs.
Considering the flood insurance payments, the record reflects that the Big Easy collected $200,000 on 24 November 2005 and $300,000 on 1 March 2006, for building damage caused by the flooding. It also received an advance of $50,000 from Pacific on 28 October 2005 for wind damage to the building, with an additional advance of $75,000 in late February 2006. However, only $22,000 was spent on repairs in 2005. By the end of 2006, a total of $669,425.27 had been spent on repairs for both flood and wind damage.
As for the Mardi Gras, on 20 January 2006, it received two checks for flood damage: the first one in the amount of $250,000 for contents; and the second in the amount of $359,179.17 for building damage. Like the Big Easy, the Mardi Gras also received the $50,000 and the $75,000 advances from Pacific. However, $21,408.96 was spent on repairs in 2005, with a 2006 total of $644,290 spent on both wind and flood damage.
Plaintiffs have a duty to mitigate their damages. See La. C.C. art. 2002.
If the flood money was being used to repair the buildings as it was being collected, whether for flood and/or wind damages (Callegari admitted that the money received from both insurers was not segregated), it is more likely than not that the loss of BI could have been minimized. However, the record reflects that because of the location of these two businesses, the Mardi Gras could not have reopened any earlier than the end of June 2006, and the Big Easy any earlier than the end of September 2006, due to the massive infrastructure damage sustained in that part of the city. Although we find that the May 2006 payments for wind damage were untimely, the record does not support a finding that timely payment would have changed the reopening dates of the Mardi Gras and the Big Easy, in light of the additional delays that were beyond Pacific's control. However, while we agree with an award for consequential damages of three months for both the Mardi Gras and the Big Easy, we apply the coinsurance provision in the policy (see discussion below) and assess La. R.S. 22:1220 penalties on those totals.
Plaintiffs successfully argued to the trial court in the hearing on their motion for new trial, that the coinsurance provision should not be applied on the loss of BI when determining the amount of their sustained loss for purposes of the penalty provision in La. R.S. 22:1220. We disagree. The BI loss sustained by the plaintiffs is the loss
In calculating consequential damages pursuant to La. R.S 22:1220, we use the figures most favorable to the plaintiffs. For the Big Easy, Mack determined that the business was losing $100,000 per month while Adrian calculated the amount as $87,174.88 per month. Conversely, Mack testified that the Mardi Gras was losing $150,000 per month, while Adrian arrived at a loss of $160,747.25 per month. We will use the higher numbers, multiply each by three, apply the coinsurance percentage, and then assess La. R.S 22:1220 penalties at 1.5 times the award, the multiplier used by the trial court. We find that the court was within its discretion in using this multiplier.
Pursuant to this process, we find that the Mardi Gras, after the application of coinsurance, sustained a BI loss of $119,354.83. It is also entitled to penalties in the amount of $179,032.25. With regard to the Big Easy, we find that it sustained a BI loss $81,750, after the application of coinsurance. We also award penalties in the amount of $122,625.
Pacific contends that the amount of extra expenses awarded by the trial court were already paid as an additional two months of BI loss and that the award should be set aside. We disagree. We find that the trial court was correct when it rejected this argument. However, conflicting testimony exists regarding the amount of those expenses.
The plaintiffs claim that Steen authored a letter wherein he agreed to pay $290,903 in extra expenses. What we find in the record is that Steen agreed on that amount of extra expenses actually incurred, but advised the plaintiffs that Adrian would determine the extent to which the extra expenses reduced the plaintiffs' BI loss by helping the businesses to open sooner. Adrian determined that by spending $290,903 in extra expenses, the plaintiffs were only able to reduce their BI loss by $186,712. However, we do not find that the trial court abused its discretion by awarding $290,903; this assignment of error has no merit.
We now address Pacific's remaining assignments of error. The first addresses the two awards (penalties and extra expenses) on which the trial court awarded "judicial interest from date of judicial demand."
Therefore, we amend the judgment to provide for interest at the legal rate from the date of judgment on those awards.
The remaining issue arose after the parties submitted their briefs. This addresses the fact that the trial court awarded La. R.S. 22:1220 penalties on the award for extra expenses, which are covered by the
Therefore, we reverse and set aside that portion of the judgment that awarded penalties under La. R.S. 22:1220; we award La. R.S. 22:658 penalties 25% to the award of $290,903 in the amount of $72,725.75.
Based upon the foregoing, we recast and restate the entire judgment rendered by the trial court to read as follows:
Accordingly, we affirm the trial court judgment in part, reverse the trial court judgment in part, amend the trial court judgment in part, and render.
MAX N. TOBIAS, JR., Judge.
The plaintiffs, Maloney Cinque, L.L.C. and Maloney Sept, L.L.C., filed an application for rehearing seeking a reversal on that portion of the judgment that applied a coinsurance penalty to the plaintiffs' award pursuant to La. R.S. 22:1220 (now La. R.S. 22:1973). For the reasons that follow, we grant the rehearing and amend the judgment accordingly.
We have carefully examined both the application for rehearing and the opposition filed by Pacific and find that the issue of the application of the coinsurance penalty is very close. Clearly, the plaintiffs did not adequately insure their properties in the event of a total loss as was experienced here. However, Pacific failed to pay the claim in a timely manner; it failed to timely pay even the undisputed amount of the claim. This failure exposes Pacific to statutory penalties under La. R.S. 22:1220 in an amount that far exceeds the penalties awarded under La. R.S. 22:658. Had Pacific timely paid the loss, the coinsurance provision in the policy would have applied, thereby reducing the amount of consequential damages. However, it did not. Thus, under La. R.S. 22:1220, the coinsurance provision is inapplicable.
In sum, we cannot say that the trial court abused its discretion when it granted the plaintiffs' motion for new trial and deleted the application of the coinsurance provision which it had previously applied.
Consequently, the court acknowledges that it erroneously treated the statutory penalties for consequential damages under La. R.S. 22:1220 in the same fashion as those penalties award under La. R.S. 22:658 (now La. R.S. 22:1892) by applying the contractual coinsurance provisions for breach of the insurance contract. See Durio v. Horace Mann Ins. Co., 11-0084, p. 18 (La. 10/25/11), 74 So.3d 1159, 1170; Neal Auction Co., Inc. v. Lafayette Ins. Co., 08-0574 (La.App. 4 Cir. 4/29/09), 13 So.3d 1135. Accordingly, the entire judgment is amended and recast as follows:
Because the plaintiffs did not separately appeal or answer the appeal challenging that part of the judgment in favor of Pacific, we are unable to award any additional money for a BI loss.
