Stephanie Lewis v. State National Insurance Company, Inc., D/B/A Qeo Insurance Group, David Degruy, Richard's Disposal, Inc. and State Farm Mutual Automobile Insurance Company (In Its Capacity as un-insured/under-insured Motorist Carrier)

STEPHANIE LEWIS * NO. 2025-CA-0041

VERSUS *
COURT OF APPEAL
STATE NATIONAL *
INSURANCE COMPANY, INC., FOURTH CIRCUIT
D/B/A QEO INSURANCE *
GROUP, DAVID DEGRUY, STATE OF LOUISIANA
RICHARD'S DISPOSAL, INC. *******
AND STATE FARM MUTUAL
AUTOMOBILE INSURANCE
COMPANY (IN ITS CAPACITY
AS UN-INSURED/UNDER-
INSURED MOTORIST
CARRIER)

CONSOLIDATED WITH: CONSOLIDATED WITH:

STEPHANIE LEWIS NO. 2025-CA-0311

VERSUS

STATE NATIONAL INSURANCE GROUP,
INC. D/B/A QEO INSURANCE GROUP,
DAVID DEGRUY, RICHARD'S DISPOSAL,
INC., AND STATE FARM MUTUAL
AUTOMOBILE INSURANCE COMPANY
(IN ITS CAPACITY AS UN-
INSURED/UNDER/INSURED MOTORIST
CARRIER)

APPEAL FROM
CIVIL DISTRICT COURT, ORLEANS PARISH
NO. 2017-11114, DIVISION “E”
Honorable Omar Mason, Judge
******
Judge Tiffany Gautier Chase
******
(Court composed of Judge Tiffany Gautier Chase, Judge Dale N. Atkins, Judge
Monique G. Morial)

Frederic C. Fondren
Joshua L. Davis
FONDREN BLAIZE
1499 St. Charles Street
Houma, LA 70360

COUNSEL FOR APPELLANT

John W. Waters, Jr.

David E. Walle, Esq
BIENVENU FOSTER RYAN & O'BANNON, LLC
1100 Poydras Street
Suite 2870
New Orleans, LA 70163

Ronald L. Wilson
Attorney at Law
701 Poydras Street
Suite 4100
New Orleans, LA 70139

COUNSEL FOR APPELLEES

EXCEPTIONS OF NO RIGHT AND NO
CAUSE OF ACTION DENIED; OCTOBER 16,
2024 AND OCTOBER 24, 2024 JUDGMENTS
AFFIRMED; ANSWER TO APPEAL DENIED

NOVEMBER 12, 2025

TGC
DNA
MGM

In this consolidated appeal, State National Insurance Company, Inc.

(hereinafter “State National”) seeks review of two trial court judgments: the

October 16, 2024 judgment granting the motion for directed verdict filed by

Richard’s Disposal, Inc. and David DeGruy (hereinafter collectively “Richard’s

Disposal”) and the October 24, 2024 judgment awarding Richard’s Disposal

$206,312.14 in special damages. In response to the appeal of the special damages

award, Richard’s Disposal filed an “Answer to Appeal” seeking penalties and bad

faith damages. Richard’s Disposal also filed exceptions of no right and no cause of

action.

After consideration of the record before this Court and the applicable law,

the October 16, 2024 judgment granting the motion for directed verdict and the

October 24, 2024 judgment awarding Richard’s Disposal $206,312.14 in special

damages are affirmed; Richard’s Disposal’s Answer to Appeal is denied; and the

exceptions of no right and no cause of action are denied.

1

Facts and Procedural History

This case involves an automobile accident that occurred on October 1, 2017

between Stephanie Lewis and David DeGruy (hereinafter individually “Mr.

DeGruy”), an employee of Richard’s Disposal. The underlying facts of the

accident and the procedural history of this case have been previously articulated, in

considerable detail, by this Court. Lewis v. State Nat’l Ins. Co., Inc., 2022-0693,

pp. 1-12 (La.App. 4 Cir. 5/19/23), 368 So.3d 653, 656-62; see also Lewis v. State

Nat’l Ins. Co., Inc., 2022-0409 (La.App. 4 Cir. 12/28/22), 367 So.3d 720, as

supplemented on reh’g (Jan. 26, 2023). The parties relevant to this consolidated

appeal are Richard’s Disposal, Mr. DeGruy and State National.

Richard’s Disposal obtained a commercial automobile insurance policy with

State National, which included an effective date of March 29, 2017 through March

29, 2018. The insurance policy contained a named driver exclusion which provided

that Mr. DeGruy was an excluded driver.1 It is undisputed that Mr. DeGruy was in

the course and scope of his employment and operating a pick-up truck owned by

Richard’s Disposal when the accident occurred. As a result of the October 1, 2017

accident, Stephanie Lewis filed a petition for damages naming Richard’s Disposal,

Mr. DeGruy and State National as defendants. State National ultimately settled

Stephanie Lewis’ case and it was dismissed with prejudice.

Richard’s Disposal and State National remained, with each asserting various

claims against the other. Multiple challenges to State National’s duty to defend

Richard’s Disposal were litigated. Prior to trial and settlement of Stephanie Lewis’

claims, we determined that State National had a duty to defend Richard’s Disposal.

1 The named driver exclusion was executed by Simone Richard, the Chief Administrative Officer

of Richard’s Disposal.

2

Lewis, 2022-0693, p. 27, 368 So.3d at 669. On April 12, 2021, Richard’s Disposal

filed a cross-claim/third-party demand against State National seeking

reimbursement of attorney’s fees, costs and penalties. In response, State National

answered Richard’s Disposal’s third-party demand and filed its own cross-

claim/third-party demand against Richard’s Disposal asserting that it negligently

violated the terms of the insurance policy by allowing Mr. DeGruy to drive a

company vehicle. State National also alleged that Richard’s Disposal failed to

procure separate insurance coverage for Mr. DeGruy, who was an excluded driver

under the State National insurance policy, pursuant to La. R.S. 32:900(B)(2)(d).

Prior to trial on the third-party demands, Richard’s Disposal filed

peremptory exceptions of no right and no cause of action, or in the alternative a

motion for directed verdict.2 Richard’s Disposal argued that State National did not

have a right or cause of action because it could not sue its own insured and was not

entitled to reimbursement or restitution of funds expended in litigating and settling

Stephanie Lewis’ claims. In opposition, State National contended that its third-

party demand validly asserts a claim for breach of contract and detrimental

reliance, and it therefore has a right of action as its petition states a cause of action

against Richard’s Disposal. The trial court deferred ruling on the exceptions until

the commencement of trial. On October 14, 2024, the case proceeded to a jury trial

on the merits of Richard’s Disposal’s and State National’s third-party demands.

Richard’s Disposal was the only party to call witnesses and State National rested

its case, without calling any witnesses nor presenting any evidence. Immediately

after State National rested, Richard’s Disposal moved for a directed verdict

2 In granting the motion for directed verdict, the trial court deemed the exceptions of no right and

no cause of action moot.

3

arguing that State National failed to provide sufficient evidence that it

detrimentally relied on a promise by Richard’s Disposal and failed to submit

evidentiary support for the claims asserted in its third-party demand. State National

maintained that the execution of the named driver exclusion represented a promise

by Richard’s Disposal that Mr. DeGruy would not drive a company vehicle.

Therefore, according to State National, it produced sufficient evidence to

overcome a directed verdict and its claims should be presented to the jury. The trial

court granted Richard’s Disposal’s motion for directed verdict, finding State

National failed to demonstrate detrimental reliance by not producing sufficient

evidence.3

After deliberating, the jury reached a verdict in favor of Richard’s Disposal

in the amount of $206,312.14. However, the jury determined that State National’s

failure to timely pay the cost of defense was not arbitrary and capricious and

refused to award additional damages. This appeal, by State National, of the

granting of the motion for directed verdict and the jury award followed.

Exceptions of No Right and No Cause of Action

On appeal, Richard’s Disposal seeks dismissal of State National’s appeal of

the judgment granting Richard’s Disposal’s motion for a directed verdict by re-

urging its peremptory exceptions of no right and no cause of action. See La. C.C.P.

art. 2163 (peremptory exceptions filed for the first time in an appellate court may

be considered if proof of the ground of the exception appears in the record). Both

the exception of no right of action and the exception of no cause of action involve

3 The trial court granted the motion for directed verdict regarding State National’s claims for

detrimental reliance, breach of contract, payment of the debts of another, fraud, negligence and
payment of a thing not owed. State National only appeals the portion of the trial court’s
judgment granting the motion for directed verdict on the claim for detrimental reliance.

4

questions of law, and are therefore reviewed de novo. Hornot v. Cardenas, 2006-

1341, p. 12 (La.App. 4 Cir. 10/3/07), 968 So.2d 789, 798 (citation omitted). “[O]ne

of the primary differences between the exception of no right of action and no cause

of action lies in the fact that the focus in an exception of no right of action is on

whether the particular plaintiff has a right to bring the suit, while the focus in an

exception of no cause of action is on whether the law provides a remedy against

the particular defendant.” Badeaux v. Sw. Computer Bureau, Inc., 2005-0612, p. 6

(La. 3/17/06), 929 So.2d 1211, 1216-17 (citation omitted).

Richard’s Disposal premises its argument on the theory that an insurer

cannot sue its insured. Specifically, State National has no right and no cause of

action against it because State National is not entitled to seek reimbursement, or

restitution, of the settlement funds issued to Stephanie Lewis. Richard’s Disposal is

essentially asserting an anti-subrogation argument. Subrogation is defined as “the

substitution of one person to the rights of another.” La. C.C. art. 1825. “The

principle of subrogation allows an insurer to stand in the shoes of the insured.”

Hosp. Mgmt. Servs., LLC v. Axis Surplus Ins. Co., 2024-0137, p. 5 (La.App. 4 Cir.

9/16/24), 400 So.3d 236, 240, writ denied, 2024-01274 (La. 1/14/25), 398 So.3d

651 (citation omitted). The anti-subrogation rule “holds that no right of

subrogation can arise in favor of an insurer against its own insured.” Starr Surplus

Lines Ins. Co. v. Bernhard MCC, L.L.C., 20-78, p. 12 (La.App. 5 Cir. 12/2/20), 308

So.3d 372, 381 (citation omitted).

“The function of the exception of no right of action is to determine whether

the plaintiff belongs to the class of persons to whom the law grants the cause of

action asserted in the suit.” Hood v. Cotter, 2008-0215, 2008-0237, p. 17 (La.

12/2/08), 5 So.3d 819, 829 (citations omitted). In determining an exception of no

5

right of action, we begin “with an examination of the pleadings.” Gisclair v.

Louisiana Tax Comm’n, 2010-0563, p. 2 (La. 9/24/10), 44 So.3d 272, 274

(citations omitted). An examination of State National’s third-party demand reveals

that State National is challenging Richard’s Disposal’s failure to procure separate

insurance coverage for Mr. DeGruy in violation of La. R.S. 32:900(B)(2)(d). State

National does not assert a subrogation claim and is not attempting to “stand in the

shoes” of Richard’s Disposal. As evident by the third-party demand, the

substantive right at issue is the right to challenge the applicability of coverage

based on the insured’s failure to procure separate insurance for an excluded driver.

Thus, the anti-subrogation rule does not apply and we find State National has a

right to assert its claims.

For the reasons articulated above, Richard’s Disposal contends that State

National’s third-party demand fails to state a valid cause of action. State National’s

third-party demand asserts that it negligently relied on Richard’s Disposal’s

assurance that it would procure a separate insurance policy for the excluded driver,

Mr. DeGruy. On an exception of no cause of action, this Court’s review “is limited

to reviewing the four corners of the petition to determine whether on its face the

petition states a cause of action.” Petkovich v. Franklin Homes, Inc., 2021-0448, p.

28 (La.App. 4 Cir. 9/22/22), 349 So.3d 1042, 1062 (citation omitted). State

National’s third-party demand asserts the following allegations:

34.
State National Insurance Company reasonably relied on Richard’s
Disposal, Inc. to comply with the law and procure additional
coverage for David DeGruy, to its detriment;

35.

As a result of Richard’s Disposal, Inc.’s failure to procure another
policy of insurance providing coverage for Mr. DeGruy, State

6

National Insurance Company has been forced to defend and protect
itself throughout this current litigation;

36.

State National Insurance Company suffered damages due to the
negligence and fault of Richard’s Disposal, Inc. to wit:

Fraudulently procuring insurance specifically
excluding a driver, David DeGruy, who was then
allegedly allowed to drive a company vehicle;

Failing to procure another policy of insurance for
David DeGruy equal to the coverage provided in the
State National Insurance Company policy under La.
R.S. 32:900(B)(2)(d);

Allegedly allowing David DeGruy, a Named
Excluded Driver, to drive a company vehicle; and

All other acts of negligence to be proven at trial.

“It is a settled matter of law that Louisiana is a fact-pleading state.” Bergeron v.

Bergeron, 2023-0161, p. 3 (La.App. 4 Cir. 11/16/23), 377 So.3d 817, 819. A

review of the four corners of State National’s third-party demand, against

Richard’s Disposal, demonstrates the petition sufficiently states a cause of action,

i.e., that it “reasonably relied on Richard’s Disposal Inc. to comply with the law

and procure additional coverage for David DeGruy.” Based on the foregoing, the

exceptions of no right and no cause of action are denied.

Motion for Directed Verdict

State National asserts one assignment of error challenging the trial court’s

ruling on Richard’s Disposal’s motion for directed verdict. State National contends

the trial court erred in dismissing its claim for detrimental reliance because the

execution of the named driver exclusion is sufficient evidence that Richard’s

Disposal promised State National that Mr. DeGruy would not drive a company

vehicle; and State National relied on this promise to its detriment. A motion for

7

directed verdict challenges the legal sufficiency of the evidence and is therefore,

subject to a de novo standard of review which applies to all legal issues. Pierre v.

Myriad Genetics, Inc., 2024-0236, p. 9 (La.App. 4 Cir. 9/16/24), 400 So.3d 223,

230, writ denied, 2024-01277 (La. 1/14/25), 398 So.3d 1168 (citation omitted).

Pursuant to La. C.C.P. art. 1810,

A party who moves for a directed verdict at the close of the evidence
offered by an opponent may offer evidence in the event that the
motion is not granted, without having reserved the right so to do and
to the same extent as if the motion had not been made. A motion for a
directed verdict that is not granted is not a waiver of trial by jury even
though all parties to the action have moved for directed verdicts. A
motion for a directed verdict shall state the specific grounds therefor.
The order of the court granting a motion for a directed verdict is
effective without any assent of the jury.

“A motion for directed verdict may be granted when, after considering all of the

evidence and making all reasonable inferences therefrom in the light most

favorable to the mover’s opponent, it is clear that the facts and inferences are so in

favor of the movant that a reasonable person could not arrive at a contrary verdict.”

Pierre, 2024-0236, p. 9, 400 So.3d at 230 (citation omitted).

At the close of State National’s case-in-chief, Richard’s Disposal moved for

a directed verdict arguing that State National failed to establish that it detrimentally

relied on a promise from Richard’s Disposal that Mr. DeGruy would not drive a

company vehicle. While asserting a different basis for its detrimental reliance

claim in its third-party demand, at trial State National maintained that execution of

the named driver exclusion was the “promise” by Richard’s Disposal that Mr.

DeGruy would not drive a company vehicle. The trial court granted the motion for

directed verdict, finding that a claim for detrimental reliance requires a promise by

one party on which the other party relies. It determined that State National did not

8

produce sufficient evidence regarding its detrimental reliance claim, and therefore

failed to meet its burden of proof.

The doctrine of detrimental reliance is codified in La. C.C. art. 1967, which

provides,

Cause is the reason why a party obligates himself.

A party may be obligated by a promise when he knew or should have
known that the promise would induce the other party to rely on it to
his detriment and the other party was reasonable in so relying.
Recovery may be limited to the expenses incurred or the damages
suffered as a result of the promisee’s reliance on the promise.
Reliance on a gratuitous promise made without required formalities is
not reasonable.

Detrimental reliance is “designed to prevent injustice by barring a party from

taking a position contrary to his prior acts, admissions, representations, or silence.”

Claverie v. Tucker, 2023-0331, p. 5 (La.App. 4 Cir. 11/27/23), 378 So.3d 131, 135

(citations omitted). A claim for detrimental reliance requires a party to prove three

elements by a preponderance of the evidence: “(1) a representation by conduct or

word; (2) justifiable reliance; and (3) a change in position to one’s detriment

because of reliance.” Suire v. Lafayette City-Par. Consol. Gov’t, 2004-1459, 2004-

1460, 2004-1466, p. 31 (La. 4/12/05), 907 So.2d 37, 59 (citations omitted). “[T]he

focus of analysis of a detrimental reliance claim is not whether the parties intended

to perform, but, instead, whether a representation was made in such a manner that

the promisor should have expected the promisee to rely upon it, and whether the

promisee so relies to his detriment.” Id., 2004-1459, pp. 31-32, 907 So.2d at 59

(citation omitted). Thus, this Court must first determine whether Richard’s

Disposal made a representation, or “promise,” by conduct or word.

9

The trial court determined that there was no representation, or “promise,” by

Richard’s Disposal that Mr. DeGruy would not drive a company vehicle. We

disagree. The named driver exclusion regarding Mr. DeGruy provides:

INSURED- Richard’s Disposal Inc.

POLICY NUMBER: QDX-LA000079-00

POLICY EFFECTIVE DATE: 03/29/2017

ENDORSEMENT EXCLUDING SPECIFIED OPERATORS

IN CONSIDERATION OF THE PREMIUM CHARGED FOR THE
POLICY TO WHICH THIS ENDORSEMENT APPLIES, IT IS
AGREED THAT THE INSURANCE AFFORDED BY THIS
POLICY SHALL NOT APPLY WITH RESPECT TO ANY CLAIM
ARISING FROM ACCIDENTS WHICH OCCUR WHILE ANY
AUTOMOBILE DESCRIBED IN THIS POLICY OR ANY OTHER
AUTOMOBILE TO WHICH THE TERMS OF THIS POLICY ARE
EXTENDED IS BEING DRIVEN OR OPERATED, EITHER WITH
OR WITHOUT PERMISSION OF THE NAMED INSURED, BY:

1. NAME: David De[G]ruy AGE: 49

THE NAMED INSURED FURTHER AGREES THAT THE
COMPANY SHALL NOT BE LIABLE AND NO LIABILITY OR
OBLIGATION OF ANY KIND SHALL ATTACH TO THE
COMPANY FOR ANY NEGLIGENCE WHICH MAY BE
IMPUTED BY LAW TO THE NAMED INSURED ARISING OUT
OF THE MAINTENANCE, OPERATION OR USE OF A MOTOR
VEHICLE BY THE PERSON NAMED ABOVE. NOTHING
CONTAINED IN THIS ENDORSEMENT SHALL VARY, WAIVE,
ALTER OR EXTEND ANY OTHER TERM OR CONDITION OF
THE POLICY. THIS ENDORSEMENT SHALL SUPERSEDE ANY
POLICY PROVISIONS TO THE CONTRARY AND SHALL
TAKE EFFECT SIMULTANEOUSLY WITH SUCH POLICY.

THE NAMED INSURED ACCEPTS THIS ENDORSEMENT AND
CONFIRMS THE ACCEPTANCE AS WITNESS HIS SIGNATURE

The named driver exclusion was signed on July 11, 2017 by Simone Richard, the

Chief Administrative Officer for Richard’s Disposal, and an agent for State

National. The execution of the named driver exclusion regarding Mr. DeGruy

indicates that he is not covered under the insurance policy and therefore serves as a

10

promise by Richard’s Disposal that Mr. DeGruy would not drive a company

vehicle. “When the words of a contract are clear and explicit and lead to no absurd

consequences, no further interpretation may be made in search of the parties’

intent.” La. C.C. art. 2046. Thus, we find, based on the language of the named

driver exclusion, that Richard’s Disposal made a promise by word or conduct and

the first element of detrimental reliance is satisfied. We next consider whether

State National established that it justifiably relied on Richard’s Disposal’s promise

that Mr. DeGruy would not drive a company vehicle.

As the plaintiff in its case-in-chief, State National was required to produce

prima facie evidence that it justifiably relied on a promise by Richard’s Disposal

that Mr. DeGruy would not drive a company vehicle. “Prima facie evidence is

defined as evidence sufficient to establish a given fact which, if not rebutted or

contradicted, will remain sufficient.” Harris v. Reg’l Transit Auth., 1995-0282, p. 4

(La.App. 4 Cir. 9/28/95), 662 So.2d 134, 137 (citations omitted) (alteration in the

original). State National introduced the affidavit of Simone Richard and the

settlement agreement with Stephanie Lewis during Richard’s Disposal’s case-in-

chief.4 After Richard’s Disposal rested, State National elected not to call any

witnesses nor introduce any additional evidence. The following colloquy took

place after Richard’s Disposal rested:

4 The following documents are listed on State National’s trial exhibit list: (1) correspondence

from State National’s underwriter attaching the petition for damages filed in the main demand;
(2) affidavits of Alvin Richard, Jr. and Simone Richard; (3) the named driver exclusion regarding
David DeGruy; and (4) the settlement agreement with Stephanie Lewis. However, State National
only offered, filed and introduced the affidavit of Simone Richard and the settlement agreement
with Stephanie Lewis at trial. See Kimball v. Kamenitz, 2021-0101, p. 22 (La.App. 4 Cir.
10/26/21), 331 So.3d 474, 489 (quoting Felix v. Safeway Ins. Co., 2015-0701, p. 7 (La.App. 4
Cir. 12/16/15), 183 So.3d 627, 632) (“Evidence not properly and officially offered and
introduced cannot be considered, even if it is physically placed in the record… .”). We note that
State National introduced these documents in Richard’s Disposal’s case-in-chief.

11

Counsel for Richard’s Disposal:
Your Honor, at this time Richard’s Disposal and David De[G]ruy rest
their case.

Trial Court:
All right. The time now is 1:56 PM. Anything further—you’re ready
to proceed counsel for [State National]?

Counsel for State National:
Yes, sir. May I have one moment?

The Court:
Sure.

Counsel for State National:
State National will rest as well.

The trial court dismissed the jurors and proceeded to consider the motions. At this

point, Richard’s Disposal moved for a directed verdict.

We agree with the trial court and find the documents submitted by State

National do not establish that it justifiably relied on Richard’s Disposal’s promise.

The record is devoid of any evidence sufficient to establish justifiable reliance.

Absent any testimony or evidence to corroborate its allegation that it relied on

Richard’s Disposal’s promise that Mr. DeGruy would not drive a company vehicle,

we find State National failed to make a prima facie claim for detrimental reliance.

As State National fails to satisfy the second element of a claim for detrimental

reliance, we pretermit discussion of the third and final element. Accordingly, we

find the trial court did not err in granting Richard’s Disposal’s motion for directed

verdict on State National’s detrimental reliance claim.

Special Damages Award

State National challenges the jury’s special damages award of $206,312.14,

the amount of Richard’s Disposal’s attorney’s fees. State National lists the

following three assignments of error: (1) the trial court’s award of $206,312.14 in

12

attorney’s fees is not supported by the evidence and testimony submitted at trial;

(2) the trial court erred by finding that State National received a valid proof of loss;

and (3) the trial court erred in not requiring Richard’s Disposal to mitigate its

damages. We find the dispositive issue to be whether the jury’s special damages

award is supported by the evidence.

A special damages award is subject to a manifest error standard of review.

McCloskey v. Higman Barge Lines, Inc., 2018-1008, p. 4 (La.App. 4 Cir. 4/10/19),

269 So.3d 1173, 1178. “Special damages are those which...may be determined with

relative certainty… .” Kaiser v. Hardin, 2006-2092, p. 11 (La. 4/11/07), 953 So.2d

802, 810 (citation omitted). “In reviewing a jury’s factual conclusions with regard

to special damages, an appellate court must satisfy a two-step process based on the

record as a whole: There must be no reasonable factual basis for the trial court’s

conclusions, and the finding must be clearly wrong.” Id., 2006-2092, pp. 11-12,

953 So.2d at 810 (citation omitted).

State National argues that Richard’s Disposal is not entitled to the damages

award because Richard’s Disposal failed to provide satisfactory proof of loss or

mitigate its damages. According to State National, the billing documents submitted

by Richard’s Disposal contained duplicative and unrelated entries. Thus, State

National’s contention is that it is impossible to distinguish between the attorney’s

fees associated with Richard’s Disposal’s defense of the main demand, asserted by

Stephanie Lewis, and the fees regarding Richard’s Disposal’s third-party demand

against State National. Richard’s Disposal maintains that because it has already

been determined that State National had a duty to defend Richard’s Disposal in the

main demand, there is no need to decipher between the work performed and

Richard’s Disposal is entitled to costs and fees associated with this matter.

13

In its third-party demand, Richard’s Disposal sought reimbursement of

attorney’s fees, costs and penalties. To support its claim for reimbursement, on

July 13, 2023, Richard’s Disposal sent a proof of loss letter to State National.

Richard’s Disposal attached the itemized billing statements of Ronald L. Wilson,

attorney at law, and Bienvenu, Foster, Ryan and O’Bannon, LLC representing

work completed in the case. The itemized billing statements are dated from

October 2017 through June 2023. According to Richard’s Disposal, and as

supported by the itemized billing statements, the total amount expended in

attorney’s fees and costs was $206,312.14. The proof of loss letter and the itemized

billing statements were entered into evidence at trial. Additionally, at trial

Richard’s Disposal corroborated its entitlement to the $206,312.14 with testimony

on the issue of defending itself in the main demand while simultaneously litigating

the issue of whether State National owed a duty to defend. The jury ultimately

awarded Richard’s Disposal $206,312.14 in damages. Based on the record before

this Court, we find a reasonable factual basis exists for the jury’s award. The jury

found the testimony and evidence submitted by Richard’s Disposal credible and

relied on it in awarding special damages. Applying a manifest error standard of

review, we find the jury did not err and the amount awarded will not be disturbed

on review.

Answer to Appeal

Through its answer to State National’s appeal of the special damages award,

Richard’s Disposal seeks review of the jury’s failure to award penalties and bad

faith damages. Richard’s Disposal maintains the jury erred in failing to find State

National was arbitrary, capricious or without probable cause under La. R.S.

22:1892 for failing to timely remit payment after receiving satisfactory proof of

14

loss.5 “The party claiming entitlement to penalties and attorney fees for bad faith

claims handling has the burden of proving: (1) the insurer received satisfactory

proof of loss; (2) the insurer failed to pay the claim within the applicable statutory

period; and, (3) the insurer’s failure to pay was arbitrary, capricious and without

probable cause.” Aghighi v. Louisiana Citizens Prop. Ins. Corp., 2012-1096, p. 4

(La.App. 4 Cir. 6/19/13), 119 So.3d 930, 933 (citation omitted). However,

“whether an insurer’s action was arbitrary, capricious or without probable cause is

essentially a fact issue to be determined by the trial court and not to be disturbed

on appeal absent manifest error.” Louisiana Bag Co., Inc. v. Audubon Indem. Co.,

2008-0453, p. 25 (La. 12/2/08), 999 So.2d 1104, 1120 (citation omitted).

We find no error in the jury’s failure to award penalties and bad faith

damages. While the jury found that Richard’s Disposal submitted satisfactory

proof of loss to State National, the jury determined that State National’s failure to

timely remit payment was not arbitrary, capricious or without probable cause. La.

R.S. 22:1892(B)(1)(a) provides, in pertinent part, that “failure to make a payment

within thirty days after receipt of satisfactory written proofs and demand…when

the failure is found to be arbitrary, capricious, or without probable cause, shall

subject the insurer to a penalty… .” Therefore, the application of La. R.S. 22:1892

is contingent upon a finding that the insurer was arbitrary, capricious or without

probable cause. Jury interrogatory number nine provides as follows: “Was State

National Insurance Company’s failure to [pay Richard’s Disposal’s legal expenses

within thirty days] arbitrary, capricious, or without probable cause?” The jury

5 La. R.S. 22:1892 is entitled “Payment and adjustment of claims; policies other than life and

health and accident; good faith duty; breach of good faith duty; vehicle damage claims; extension
of time to respond to claims during emergency or disaster; penalties; arson-related claims
suspension; definitions.”

15

answered “no.” The record reflects sufficient evidence for the jury to determine

that State National’s actions were not arbitrary, capricious or without probable

cause. A finding that Richard’s Disposal presented satisfactory proof of loss is not

the sole determinative factor as to whether State National was arbitrary, capricious

or without probable cause. Accordingly, we find the jury did not err and find no

inconsistency between the jury’s damages award and its refusal to award penalties

and bad faith damages.

Finally, Richard’s Disposal seeks attorney’s fees for defending this appeal. It

is well settled that,

[A]ttorney fees [are] usually awarded where a party who was awarded
attorney fees by the trial court is forced to and successfully defends an
appeal. The award of additional attorney fees is to keep the appellate
judgment consistent with the underlying judgment. To determine the amount
of attorney fees, factors that are considered include “the skill exercised by
the attorney and the time and work required on appeal.”

Maldonado v. Cannizzaro, 2018-0177, p. 14 (La.App. 4 Cir. 10/10/18), 257 So.3d

733, 743 (quoting State, Dep’t of Transp. & Dev. v. Monteleone, 2011-1013, p. 34

(La.App. 5 Cir. 11/13/12), 106 So.3d 153, 174); see also Gloria’s Ranch, L.L.C. v.

Tauren Expl., Inc., 2017-1518, 2017-1519, 2017-1522, p. 23 (La. 6/27/18), 252

So.3d 431, 446. Richard’s Disposal was not awarded attorney’s fees at the trial

court; thus, we may not consider whether it is entitled to attorney’s fees for its

successful defense in this Court. Accordingly, we decline to award attorney’s fees

for this appeal.

Decree

For the foregoing reasons, the October 16, 2024 judgment granting the

motion for directed verdict and the October 24, 2024 judgment awarding Richard’s

Disposal $206,312.14 in special damages are affirmed; Richard’s Disposal’s

16

Answer to Appeal is denied; and the exceptions of no right and no cause of action

are denied.

EXCEPTIONS OF NO RIGHT AND NO
CAUSE OF ACTION DENIED; OCTOBER 16,
2024 AND OCTOBER 24, 2024 JUDGMENTS
AFFIRMED; ANSWER TO APPEAL DENIED

17