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Harris v. Union National Fire Insurance Co.

Court of Appeals of Louisiana, First Circuit

January 15, 2020


          Appealed from the 21st District Court j In and for the Parish of Livingston State of Louisiana Docket No. 136690 Honorable Jeffrey S. Johnson, Judge Presiding

          Hobart O. Pardue, Jr. Springfield, Louisiana Counsel for Plaintiffs/Appellees Jerry Harris and Elnora Harris

          Christopher A. D'Amour Martin A. Stern Sara C. Valentine New Orleans, Louisiana Counsel for Defendant/Appellant Union National Fire Insurance Company


          LANIER, J.

         In this case, defendant, Union National Fire Insurance Company ("Union National"), challenges the district court's judgment awarding plaintiffs, Jerry and Elnora Harris ("Harrises"), over $63, 000.00 in general and special damages, attorney fees, and statutory penalties, together with legal interest and court costs, following a hearing on the Harrises' rule for contempt against Union National for failure to pay a settlement. For the following reasons, we affirm in part, vacate in part, find Union National in contempt of court, and remand with instructions.


         At the heart of this appeal is a dispute over insurance proceeds. In April 2011, a fire destroyed the Harrises' home. The Harrises originally filed suit against Union National, seeking payment of the policy limits, penalties, and attorney fees. (pp. 3-4) They later amended the suit to include the companies owning a mortgage interest on the home.[1] (pp. 5-6)

         Union National answered the suit, generally denying the allegations therein. (p. 17) Thereafter, Union National moved for summary judgment on the basis that Union National had timely paid out the proceeds of the insurance policy in accordance with the terms of the policy, (p. 112) Union National argued that it had fulfilled its obligations under the policy by tendering a check for the full policy limits jointly to the Harrises and the mortgagee of the property, but that the check had never been negotiated, (pp. 112-122) Following a May 12, 2014 hearing on Union National's motion, the district court rendered judgment on June 10, 2014, granting Union National's summary judgment motion and dismissing Union National, with prejudice. The judgment further provided that Union National would deposit $40, 000.00 into the registry of the court.[2] (p. 161)

         In March 2017, the Harrises filed a Rule for Contempt for Failure to Pay Settlement, alleging that Union National was liable to them for not only damages, but also penalties, attorney fees, and costs for Union National's breach of the imposed duty of good faith and fair dealing pursuant to La. R.S. 22:1973(B)(2) and (C), because Union National failed to pay the previously agreed to settlement within thirty days after the agreement was reduced to writing.[3] In said rule, the Harrises allege that Union National had agreed to settle its portion of this matter in June 2014 by depositing $40, 000.00 into the registry of the court and that "a written judgment was filed into the record memorializing the settlement agreement." (p. 421) According to the Harrises, prior to filing the rule for contempt, they sent a demand letter to Union National on March 29, 2017, to no avail, offering to accept $40, 000.00 plus interest to resolve the dispute, (pp. 425-431)

         In response, Union National filed an exception raising the objection of no cause of action, arguing that it was no longer a party to the case as it was dismissed from the case, with prejudice. Moreover, Union National argued that it had no obligation to place the funds in the court's registry, but it did so to gain dismissal from the case while in its infancy. Union National further noted that although it sent the $40, 000.00 check to the clerk of court, it was apparently never deposited because the check became stale. However, Union National maintained that upon learning this information, a new check was deposited into the registry of the court. Union National also argued that there was no settlement between the parties as argued by the Harrises, but rather simply an order by the court that Union National deposit the funds into the registry of the court. Thus, Union National asserted La. R.S. 22:1973(B) had no application to this case.[4] (pp. 469-471)

         The Harrises' rule proceeded to hearing on July 17, 2017, at which time the district court heard arguments from counsel and testimony from a representative of the Livingston Parish Clerk of Court's office. The district court took the matter under advisement. Thereafter, on November 3, 2017, the district court issued written reasons for judgment, finding in favor of the Harrises, (pp. 509-513) A judgment submitted by counsel for the Harrises was signed by the district court on November 17, 2017, but said judgment did not contain the appropriate decretal language, nor did it accurately reflect the damages awarded, (p. 516) Accordingly, Union National filed a motion for new trial, which was subsequently granted, (p. 519) The district court entered a new judgment on November 27, 2018, as follows:

IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that the Plaintiffs have judgment against Defendant Union National Fire Insurance Company in the amount of $15, 000.00 as general damages; special damages for loss of judicial interest in the amount of $4, 545.75, plus legal interest from April 6, 2017. Attorney's fees for the Rule for Contempt/Motion to Enforce Settlement in the amount of $5, 000.00, and statutory penalties in the amount of $39, 091.50, together with legal interest from the date of filing this Judgment, in addition to the funds previously deposited into the Registry of the Court, together with all costs of these proceedings.
Union National has no objection to Plaintiffs removing the funds deposited in the registry of the Court.
This judgment resolves all matters between the parties and, therefore, is the final judgment in the case under La CCP articles 1911, 1918 and 2083. (p. 559)

         It is from this judgment that Union National has appealed, assigning the following ...

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