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Percoraro v. Louisiana Citizens Insurance Corp.

Court of Appeals of Louisiana, Fifth Circuit

October 17, 2018

CATHERINE PERCORARO AND EMMA PECORARO
v.
LOUISIANA CITIZENS INSURANCE CORPORATION

          ON APPEAL FROM THE TWENTY-FOURTH JUDICIAL DISTRICT COURT PARISH OF JEFFERSON, STATE OF LOUISIANA NO. 741-789, DIVISION "H" HONORABLE GLENN B. ANSARDI, JUDGE PRESIDING

          COUNSEL FOR PLAINTIFF/APPELLEE, CATHERINE PECORARO AND EMMA PECORARO John H. Denenea, Jr.

          COUNSEL FOR DEFENDANT/APPELLANT, LOUISIANA CITIZENS PROPERTY INSURANCE COMPANY Nicholas P. Arnold David B. Belk

          Panel composed of Judges Marc E. Johnson, Stephen J. Windhorst, and Hans J. Liljeberg

          MARC E. JOHNSON JUDGE

         Defendant, Louisiana Citizens Property Insurance Corporation ("Citizens"), appeals a judgment awarding Plaintiff depreciation value associated with her property loss claim from Hurricane Isaac. For the reasons that follow, we reverse.

         In August 2012, Plaintiffs, Catherine and Emma Pecoraro, sustained property damage to their home on Jeanette Drive in Metairie as a result of Hurricane Isaac. At the time of their loss, Plaintiffs were insured by Citizens under a wind and hail policy. They submitted a claim to Citizens for the property damage, but the parties could not agree on the amount of loss. As a result, Plaintiffs invoked the appraisal clause of the insurance policy, which resulted in the parties selecting two appraisers - one on behalf of each party - to determine the amount of loss. The appraisers could not agree on the amount of loss; so, an umpire was selected, as per the policy, to resolve the dispute between the appraisers.

         Both appraisers met with the umpire on July 15, 2014 to discuss their disagreements. The umpire rendered his report on August 20, 2014, valuing the property loss at $35, 686.19 in replacement cost value ("RCV") for Coverage A -Dwelling, and $1, 585.02 in RCV for Coverage B - Other structures.[1] The umpire specifically noted that prior payments and a deductible should be applied to the value of the loss, assuming the policy provides for such. Additionally, the umpire expressly stated that his report "does not take a position on whether RCV or ACV [actual cost value] is owed under the policy." Plaintiffs' appraiser signed the umpire's report indicating his agreement, thus setting the amount of loss under the terms of the policy.[2] Citizens then adjusted the amount of loss by taking into consideration depreciation, the policy deductible, and prior payments, and tendered payment to Plaintiffs below the amount of loss determined by the umpire.

         Plaintiffs[3] subsequently filed suit on August 28, 2014 against Citizens, alleging that it refused to pay the full amount owed under the policy for their claim resulting from Hurricane Isaac. Plaintiffs further asserted that Citizens was arbitrary and capricious in refusing to fully pay their claim and, thus, acted in bad faith thereby entitling Plaintiffs to penalties and attorney's fees.

         The parties proceeded to a bench trial on September 12, 2017. At the beginning of trial, the parties stipulated that the total amount in contractual dispute was $10, 088.12. In post-trial briefs, the parties indicated that this amount was the difference between the replacement value of the damaged property, as determined by the umpire, and the actual cash value ("ACV") of the damaged property, as calculated and paid by Citizens. After taking the matter under advisement, the trial court rendered judgment on October 26, 2017, finding Citizens liable to Plaintiff for the $10, 088.12, or the difference between the ACV it had already paid and the RCV as determined by the umpire. The trial court did not find Citizens acted arbitrarily and capriciously in handling Plaintiff's claim.

         In its reasons for judgment, the trial court concluded that although Citizens believed the policy at issue was an ACV policy, the policy language, when liberally construed, allowed for the payment of property damage in an amount required to repair or replace the property. It determined that the policy was ambiguous given the fact the appraisal provision did not specifically refer to ACV. The trial court reasoned that because ambiguity in an insurance policy must be resolved in favor of the insured, Plaintiff was clearly entitled to the difference between the ACV, which was paid to Plaintiff, and the RCV, which was determined by the umpire.

         Citizens filed this appeal raising as its sole assignment of error the trial court's failure to apply the ACV limitation of coverage as clearly set forth in the declarations page of the policy.

         There are no factual disputes in this case. The sole issue before us - whether Citizens owes ACV or RCV under the terms of the policy - involves the interpretation of the insurance policy language. An insurance policy is a contract between the parties and should be construed employing the general rules of interpretation of contracts set forth in the Louisiana Civil Code. Sher v. Lafayette Ins. Co., 07-2441 c/w 07-2443 (La. 4/8/08); 988 So.2d 186, 192, rehearing granted on other grounds, 07-2441 (La. 7/7/08); 988 So.2d 186. Interpretation of an insurance contract is a question of law, which is subject to a de novo review on appeal without deference to the legal conclusions of the trial court. See Power v. State Farm Fire & Casualty Co., 15-796 (La.App. 5 Cir. 5/26/16); 193 So.3d 471, 473; PAF, Inc. v. Regions Bank, 14-195 (La.App. 5 Cir. 9/24/14); 150 So.3d 477, 479.

         The extent of coverage under an insurance contract is dependent on the common intent of the insured and insurer. Thus when interpreting an insurance contract, courts must discern the common intent of the parties. See La. C.C. art. 2045; Doucet v. Huffine Roofing & Construction, 02-1049 (La.App. 5 Cir. 2/25/03); 841 So.2d 916, 919. In ascertaining the common intent of the parties, courts must begin their analysis with a review of the words of the insurance contract. Words in an insurance contract must be ascribed their generally prevailing meaning, unless the words have acquired a technical meaning, in which case the words must be ascribed their technical meaning. La. C.C. art. 2048; Doucet, supra. Moreover, an insurance contract must be construed as a whole and each provision in the ...


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