Kourtney Phillips v. Cecilia Osmun

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

07-50

KOURTNEY PHILLIPS, ET AL.

VERSUS

CECILIA OSMUN, ET AL.

**********
APPEAL FROM THE
ALEXANDRIA CITY COURT
PARISH OF RAPIDES, NO. 102,528
HONORABLE RICHARD ERIC STARLING, JR., CITY COURT JUDGE

**********
ULYSSES GENE THIBODEAUX
CHIEF JUDGE
**********

Court composed of Ulysses Gene Thibodeaux, Chief Judge, Jimmie C. Peters,
Michael G. Sullivan, Glenn B. Gremillion, and Elizabeth A. Pickett, Judges.

PETERS, J., CONCURS IN PART, DISSENTS IN PART AND ASSIGNS
WRITTEN REASONS.

AFFIRMED IN PART; REVERSED IN
PART.

Roy Seale Halcomb, Jr.
Broussard, Bolton, Halcomb & Vizzier
P. O. Box 1311
Alexandria, LA 71301
Telephone: (318) 487-4589
COUNSEL FOR:
Plaintiffs/Appellees - Kourtney Phillips and Edmond Bratton

Keith M. Borne
Borne & Wilkes, L.L.P.
P. O. Box 4305
Lafayette, LA 70502-4305
Telephone: (337) 232-1604
COUNSEL FOR:
Defendants/Appellants - Safeway Insurance Company of Louisiana
and Cecilia Osmun

THIBODEAUX, Chief Judge.

Defendants, Cecilia Osmun (Ms. Osmun), and her automobile liability

insurer, Safeway Insurance Company of Louisiana (Safeway), appeal the trial court’s

judgment awarding general and special damages to plaintiffs, Kourtney Phillips (Ms.

Phillips) and Edmond Bratton (Mr. Bratton) as a result of an automobile collision for

which Ms. Osmun was found to be 100 percent at fault after a trial on the issues of

liability and damages. Safeway also appeals the trial court’s judgment awarding

$5,000.00 in penalties against it in favor of Ms. Phillips because the court found that

Safeway was arbitrary and capricious for not initiating loss adjustment on Ms.

Phillips’s medical expenses in a timely manner.

For the following reasons, we affirm the trial court’s judgment awarding

damages to both Mr. Bratton and Ms. Phillips. However, because the trial court

abused its discretion in awarding $5,000.00 in penalties to Ms. Phillips against

Safeway, the judgment awarding penalties to Ms. Phillips is reversed.

I.

ISSUES

Ms. Osmun and Safeway raise three issues on appeal:

1. the trial court erred by awarding general damages to
Ms. Phillips in the amount of $12,000.00 and
$2,000.00 for future medical expenses;

2. the trial court erred by awarding $12,000.00 in
general damages to Mr. Bratton; and,

3. the trial court erred by awarding Ms. Phillips
$5,000.00 in penalties per La.R.S. 22:1220 from
Safeway because it did not timely initiate loss
adjustment of her medical expenses as required by
La.R.S. 22:658(A)(3).

II.

FACTS

A head-on collision occurred between the vehicle being driven by Mr.

Bratton and the vehicle owned and driven by Ms. Osmun on March 27, 2004. Ms.

Phillips was a passenger in Mr. Bratton’s vehicle. As a result of that collision, both

Ms. Phillips and Mr. Bratton sustained injuries.

Ms. Phillips was taken to a local emergency room and released. She then

underwent treatment with a physician for two months, which included approximately

two weeks of physical therapy. Her physician placed a note in her chart that she was

experiencing no pain nor did she have any further symptoms of injury when he

released her from treatment. While she had not sought any further medical care, she

was complaining of continuing pain in her back at the time of trial.

Mr. Bratton’s left hand hit the windshield of the car as a result of the

impact with Ms. Osmun’s vehicle. His hand was cut in a number of places. Pieces

of glass from the windshield had to be removed from some of the wounds. Photos of

his vehicle reveal blood on his air bag from his injured hand, and that the windshield

was shattered from the impact of his hand.

Safeway was contacted by the plaintiffs approximately three to four days

after the accident. Within forty-eight hours of receiving that notification, an adjuster

for Safeway attempted to reach both plaintiffs by phone. Safeway then sent both Ms.

Phillips and Mr. Bratton packets containing letters asking each of them to contact

Safeway regarding the accident and their injuries. The packets also contained ‘bodily

injury letters,’ asking each plaintiff to forward all medical bills and records to

Safeway when their treatment was completed so that settlement of their claim could

begin. Those packets were sent on March 31, 2004.

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Ms. Phillips and Mr. Bratton retained an attorney within one week of the

collision. Their attorney contacted Safeway informing the company that all medical

bills and claims would come from the attorney, and that all correspondence about the

claim should be received by the attorney. The claim for damage to Mr. Bratton’s

vehicle was settled without incident or complaint.

Medical bills were sent to Safeway by the plaintiffs’ attorney on June 18,

2004, and received by Safeway on June 21, 2004. Safeway alleges that the medical

bills did not come with an attendant settlement demand as Safeway requested of the

plaintiffs’ attorney. More medical bills were sent on three other occasions to

Safeway. On October 12, 2004, a demand for settlement was sent to Safeway by the

plaintiffs’ attorney. While Safeway responded to this demand and attempted to

conclude the loss adjustment on the medical bills and general damages claims at that

time, the plaintiffs’ attorney filed suit for damages and penalties.

The trial court found in favor of Ms. Phillips and Mr. Bratton. Ms.

Phillips was awarded general damages in the amount of $12,000.00. She was also

awarded special damages for past medical expenses in the amount of $2,657.32,

future medical expenses in the amount of $2,000.00, and lost wages in the amount of

$432.50. Mr. Bratton was awarded general damages in the amount of $12,000.00.

The trial court also awarded $5,000.00 in penalties against Safeway in favor of Ms.

Phillips for its failure to timely initiate loss adjustment of her claim for medical

expenses, finding that this late payment was arbitrary and capricious pursuant to

La.R.S. 22:1220.

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III.

LAW AND DISCUSSION

Standard of Review

We note that neither Ms. Osmun nor Safeway raise the issue of liability

on appeal. Therefore, the trial court’s determination that Ms. Osmun was 100% at

fault for the accident will not be discussed.

An award for general damages compensates an injury victim for the less

specific injuries that accompany physical trauma. These injuries are not as easily

confined to exact bills.

General damages are those which may not be fixed
with pecuniary exactitude; instead, they “involve mental or
physical pain or suffering, inconvenience, the loss of
intellectual gratification or physical enjoyment, or other
losses of life or life-style which cannot be definitely
measured in monetary terms.” Keeth v. Dept. of Pub.
Safety & Transp., 618 So.2d 1154, 1160 (La.App. 2 Cir.
1993).

Duncan v. Kansas City S. Ry. Co., 00-66, p. 13 (La. 10/30/00), 773 So.2d 670, 682,

writ dismissed, 532 U.S. 992, 121 S.Ct. 1651 (2001).

An appellate court can only change an award of general damages if it

finds that the trial court abused the great discretion vested in it to determine such

damage awards. Id.

Importantly, on review, an appellate court should rarely
disturb an award of general damages because “the
discretion vested in the trier of fact is ‘great,’ and even
vast.” Youn v. Maritime Overseas Corp., 623 So.2d 1257,
1261 (La.1993), cert. denied, 510 U.S. 1114, 114 S.Ct.
1059, 127 L.Ed.2d 379 (1994). It is only when the trier of
fact has abused its much discretion that the appellate court
may disturb the award, but then only to the extent of
lowering it to the highest point or raising it to the lowest
point which was reasonably within the discretion of the
trier of fact. Id. However, this principle of appellate
review applies only when a litigant “questions the
adequacy of a monetary award in a case which is otherwise

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uncomplicated by factual errors relating to the cause or
duration of the plaintiff's disability.” Mart v. Hill, 505
So.2d 1120, 1128 (La.1987).

Basco v. Liberty Mut. Ins. Co., 05-143, p. 9 (La.App. 3 Cir. 8/17/05), 909 So.2d 660,

666.

Therefore, we will review the record in its entirety to determine if the

trial court abused its vast discretion, and not to determine what this court would

award if reviewing the case de novo. “‘[T]he role of an appellate court in reviewing

general damages is not to decide what it considers to be an appropriate award, but

rather to review the exercise of discretion by the trier of fact.’ Wainwright v.

Fontenot, 00-0492 (La. 10/17/00), 774 So.2d 70, 74 (quoting Youn v. Maritime

Overseas Corp., 623 So.2d 1257, 1260 (La.1993), cert. denied, 510 U.S. 1114, 114

S.Ct. 1059, 127 L.Ed.2d 379 (1994)).” Mouhot v. Twelfth St. Baptist Church, 06-

1283, p. 4 (La.App. 3 Cir. 2/7/07), 949 So.2d 668, 671.

Did the Trial Court Abuse its Vast Discretion by Awarding Ms. Phillips
$12,000.00 in General Damages and $2,000.00 For Future Medical Expenses?

General Damage Award

Testimony and evidence in the record establish that Ms. Phillips was a

relatively healthy young woman with no reported injuries, aches or pains before the

accident with Ms. Osmun. After the accident there is both subjective and objective

evidence in the record showing that she sustained injuries to her knees, neck and

back. The injury to her back required ongoing medical treatment that included

physical therapy for at least two months.

Her physician, Dr. Robert K. Rush, testified that he diagnosed Ms.

Phillips with lumbar strain, post-traumatic headaches, trauma to her knees, and

muscle spasms in her lower back. He stated that muscle spasms are indicative of soft

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tissue muscle and ligament injury which usually means that there has been tearing of

those tissues with subsequent inflammation.

Dr. Rush felt that Ms. Phillips’s complaints regarding pain during

prolonged sitting, standing or repetitive bending were consistent with a diagnosis of

lumbar strain. He also testified that the injury and resulting pain were more likely

than not a result of the car accident. Dr. Rush described Ms. Phillips as a sincere

young lady. He had no reason to believe that her complaints were either embellished

or misleading.

Because there is ample evidence in the record which supports the trial

court’s award of $12,000.00 in general damages to Ms. Phillips, we affirm the

judgment of the trial court.

Future Medical Expenses

Future medical expenses are a component of special
damages and must be proven by a preponderance of the
evidence. Basco v. Liberty Mut. Ins. Co., 05-143 (La.App.
3 Cir. 8/17/05), 909 So.2d 660. To recover future medical
expenses, the plaintiff must present medical testimony to
show that it is more probable than not that future medical
treatment is indicated and the probable cost of the
treatment. Id.

Smith v. Municipality of Ferriday, 05-755, p. 11-12 (La.App. 3 Cir. 2/1/06), 922

So.2d 1222, 1231, writ denied, 06-934 (La. 9/29/06), 937 So.2d 860.

While Dr. Rush discharged Ms. Phillips from treatment on June 9, 2004

stating that her injuries had resolved, Ms. Phillips testified at trial that she was still

experiencing back pain as a result of the car accident. The trial court found her to be

a credible witness and believed that she was still having pain. The trial court’s

determination of her credibility must be given great deference, and cannot be

overturned by this court absent a showing of manifest error. Id.

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Dr. Rush stated that it was not uncommon for complicated or more

severe lumbar strains to continue to cause the patient pain long after the usual eight

to twelve weeks that a non-complicated tissue injury might take to resolve. He said

that patients will have good days and bad days depending on the kind of activity

pursued that day. He postulated that Ms. Phillips’s ongoing pain could likely be the

result of a ligamentous injury with resulting instability, or perhaps degenerative disc

disease which was now becoming symptomatic.

Dr. Rush suggested that the best course of action for Ms. Phillips to

pursue would be to undergo a spine motion flouroscopy study and a magnetic

resonance imaging (MRI) of her lower back. He said that both of those tests would

be needed to help diagnose and treat her ongoing pain. He estimated that the cost of

those two tests combined would be approximately $2,000.00. His estimates were

based on his experience and familiarity with both of those tests.

It was not manifest error for the trial judge to award Ms. Phillips

$2,000.00 for future medical expenses based on Dr. Rush’s estimates of the costs of

those tests. Given the possibility that the results of the two tests may require Ms.

Phillips to undergo more medical treatment and care, $2,000.00 was a conservative

and reasonable award. The trial court’s award of $2,000.00 to Ms. Phillips for future

medical expenses is affirmed.

Did the Trial Court Abuse its Vast Discretion by Awarding Mr. Bratton
$12,000.00 in General Damages?

Mr. Bratton presented a number of photos of his left hand evidencing the

cuts and scars he sustained from the accident. He testified that he did not have any

scarring on his left hand before the accident. He also stated that the injuries were still

sore and tender to the touch. Mr. Bratton had significant scarring on his left hand as

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of the date of trial. He stated that he was self-conscious about his scars when people

looked at them. His appearance plays a role in his work, which is selling and

delivering products to customers.

Both he and Ms. Phillips talked about the serious nature of his injuries.

In order to be awarded general damages, he does not need to submit medical bills.

General damages reimburse an injured party for pain and suffering. Duncan v.

Kansas City S. Ry. Co., 773 So.2d 670. There was ample evidence in the record of

Mr. Bratton’s pain and suffering as a result of the injuries he sustained from the

accident. The trial court did not abuse its discretion in awarding general damages to

Mr. Bratton because of the injuries he sustained and the scarring and pain he currently

lives with. The trial court’s award of general damages to Mr. Bratton in the amount

of $12,000.00 is affirmed.

Did the Trial Court Commit Manifest Error by Awarding Ms. Phillips
$5,000.00 in Penalties from Safeway Because Safeway Did Not Initiate Loss
Adjustment of Ms. Phillips’s Medical Expenses in a Timely Manner?

A trial court’s determination that statutory penalties are in order is

largely based on that court’s factual conclusions which we review under the manifest

error standard. “Because the decision to assess statutory penalties is a factual

determination, in part, we review the trial court’s assessment of penalties against

Safeway under the manifest error standard of review. We acknowledge that since the

pertinent statutes subject insurers to penalties, we must construe them strictly.”

Joubert v. Broussard, 02-911, pp. 1-2 (La.App. 3 Cir. 12/11/02), 832 So.2d 1182,

1184, writ denied, 03-60 (La. 3/21/03), 840 So.2d 552.

The penalty assessed against Safeway is based on the trial court’s

determination that La.R.S. 22:658(A)(3) was violated by the insurer. The statute

reads, in pertinent part, as follows:

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(3) Except in the case of catastrophic loss, the
insurer shall initiate loss adjustment of a property damage
claim and of a claim for reasonable medical expenses
within fourteen days after notification of loss by the
claimant. In the case of catastrophic loss, the insurer shall
initiate loss adjustment of a property damage claim within
thirty days after notification of loss by the claimant.
Failure to comply with the provisions of this Paragraph
shall subject the insurer to the penalties provided in R.S.
22:1220.

La.R.S.22:658(A)(3).

The penalties that can be assessed for violation of La.R.S. 22:658(A)(3)

are statutorily provided.

§ 1220. Good faith duty; claims settlement practices;
cause of action; penalties

A. An insurer, including but not limited to a foreign
line and surplus line insurer, owes to his insured a duty of
good faith and fair dealing. The insurer has an affirmative
duty to adjust claims fairly and promptly and to make a
reasonable effort to settle claims with the insured or the
claimant, or both. Any insurer who breaches these duties
shall be liable for any damages sustained as a result of the
breach.

B. Any one of the following acts, if knowingly
committed or performed by an insurer, constitutes a breach
of the insurer’s duties imposed in Subsection A:

....

(5) Failing to pay the amount of any claim due any
person insured by the contract within sixty days after
receipt of satisfactory proof of loss from the claimant when
such failure is arbitrary, capricious, or without probable
cause.

....

C. In addition to any general or special damages to
which a claimant is entitled for breach of the imposed duty,
the claimant may be awarded penalties assessed against the
insurer in an amount not to exceed two times the damages
sustained or five thousand dollars, whichever is greater.
Such penalties, if awarded, shall not be used by the insurer

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in computing either past or prospective loss experience for
the purpose of setting rates or making rate filings.

La.R.S. 22:1220(A)-(C).

An insurer must take some action of substance in order for a court to

consider that the insurer has initiated loss adjustment.

In initiating loss adjustment, the insurer must take
some substantive and affirmative step to accumulate the
facts that are necessary to evaluate the claim. Chatoney v.
Safeway Insurance Company, 00-1189, (La.App. 3 Cir.
6/13/01) 2001 WL 665207, 801 So.2d 448. McClendon v.
Economy Fire & Casualty Insurance Company, 98-1537
(La.App. 3 Cir. 4/7/99) 732 So.2d 727, 731. Simply
opening a file does not satisfy the requirement of La.R.S.
22:658(A)(3) that an insurer initiate loss adjustment.

Rogers v. Commercial Union Ins. Co., 01-443, p. 8 (La.App. 3 Cir. 10/3/01), 796

So.2d 862, 868.

In Joubert, this court determined that the insurer’s act of internally

checking its own files to determine if the claimant was insured at the time of the

accident did not constitute initiating loss adjustment. In Rogers, we concluded that

making and receiving phone calls did not rise to the level of initiating loss adjustment

either. “We note that Economy’s action of simply opening a file does not satisfy the

requirement of La.R.S. 22:658(A)(3) that the insurer initiate loss adjustment. We

interpret this provision to require that the insurer take some substantive and

affirmative step to accumulate the facts that are necessary to evaluate the claim.”

McClendon v. Economy Fire & Cas. Ins. Co., 98-1537 p. 7 (La.App. 3 Cir. 4/7/99),

732 So.2d 727, 731.

In this case, Safeway did more than open a file or make and receive

phone calls. Steps were taken to accumulate the facts needed to process the claim.

A packet was sent to both plaintiffs forty-eight hours after Safeway was informed

about the accident. Safeway communicated with Ms. Phillips through her lawyer as

10

requested, and repeatedly asked for a demand letter when all medical treatment was

completed and bills were ready for payment.

The record shows that Ms. Phillips’s attorney sent her medical bills to

Safeway in installments. While most of the letters sent with those installments stated

that the bills were being presented for payment, the letters did not state that the

treatment was completed and that a formal demand was being made.

Safeway’s claims adjuster testified that Safeway has a policy to request

a demand letter when all medical treatments are complete for all medical expense

claims. The reason it wants a demand letter is to signal that it is time to review the

file and begin settlement discussions. Without a formal demand letter, Safeway

cannot be sure that a demand for payment is being made.

On October 14, Safeway received a formal demand letter from Ms.

Phillips’s attorney for payment of all medical expenses. Within five days of receipt

of that demand letter, the claims adjuster reviewed Ms. Phillips’s file with a

supervisor, who then contacted Safeway’s general counsel, and a letter offering

settlement of all medical claims was sent to Ms. Phillips’s attorney.

Safeway contends that it met the statutory requirement of initiating loss

adjustment within fourteen days of notice of the claim. It also contends that

settlement negotiations began within five days of receipt of a demand letter. We

agree. Safeway did more than place and receive calls, and open a file. Safeway was

actively corresponding with Ms. Phillips regarding her claim for medical expenses,

and was consistently asking for a demand letter when medical treatment was

completed. Safeway was taking steps to gather the information needed to evaluate

and process Ms. Phillips’s claim for medical expenses. Safeway was not arbitrary and

capricious. The insurer was consistently seeking information and a formal demand.

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The trial court’s judgment awarding Ms. Phillips $5,000.00 in penalties against

Safeway for not timely initiating loss adjustment is reversed.

IV.

CONCLUSION

A trial court’s award of general damages, future medical expenses, and

penalties is reviewed by an appellate court for an abuse of the trial court’s vast

discretion or manifest error. There were ample facts in the record to support the trial

court’s award of $12,000.00 in general damages and $2,000.00 for future medical

expenses to Ms. Phillips. Likewise, the record supports as reasonable the trial court’s

judgment awarding $12,000.00 in general damages to Mr. Bratton. These damage

awards are affirmed.

The trial court’s interpretation of Safeway’s actions as arbitrary and

capricious because the insurer did not timely initiate loss adjustment is not supported

by the record. The record reflects that Safeway took actions which met the legal

requirement of initiating loss adjustment pursuant to La.R.S. 22:658(A)(3).

Therefore, the portion of the trial court judgment awarding Ms. Phillips $5,000.00 in

penalties is reversed.

The costs of this appeal are split between the plaintiffs, Ms. Phillips and

Mr. Bratton, and the defendants, Ms. Osmun and Safeway. The plaintiffs are cast

with one-third of the costs of this appeal. The defendants and are cast with two-thirds

of the costs of this appeal.

AFFIRMED IN PART; REVERSED IN PART.

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STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

07-50

KOURTNEY PHILLIPS, ET AL.

VERSUS

CECILIA OSMUN, ET AL.

PETERS, J., concurring in part and dissenting in part.

I agree with the majority in all respects except the conclusion that the trial court

erred in awarding Kourtney Phillips $5,000.00 in penalties from Safeway Insurance

Company of Louisiana (Safeway). I would affirm the trial court’s factual finding that

Safeway did not initiate loss adjustment of Ms. Phillips’s medical expenses within

fourteen days of notification of loss, as required by La.R.S. 22:658(A)(3).

The accident that caused the plaintiffs’ injuries occurred on March 27, 2004,

and Safeway received notice of the claim almost immediately. As the majority notes,

within forty-eight hours of receiving notice of the claim, an adjuster for Safeway

attempted to reach the plaintiffs by phone, and on March 31, 2004, Safeway sent the

plaintiffs packets containing letters asking each of them to contact Safeway regarding

the accident and their injuries. These packets contained letters requesting that the

plaintiffs forward all medical bills and records to Safeway when their treatment was

completed so that settlement of their claims could begin.

On April 7, 2004, plaintiffs’ retained counsel forwarded Safeway a letter

advising of his representation. At trial, Lane Kirk Jude Stelly, a claims adjuster at

Safeway, testified that Safeway responded to that letter by requesting that counsel

send Safeway all the medical bills and a demand packet for injuries sustained in the

accident. However, no such letter was introduced into evidence, and Safeway’s

activity log, which details the actions taken on Ms. Phillips’s claims, does not

indicate that such a response was sent. The plaintiffs’ attorney sent Safeway a letter

on June 18, 2004, attaching Ms. Phillips’s medical reports and medical bills

“enclosed for payment.”1 The plaintiffs’ attorney sent Safeway letters and medical

bills on July 2, 2004,2 July 14, 2004,3 and August 12, 2004.4 On October 12, 2004,

the plaintiffs’ attorney sent Safeway a formal demand letter for payment of all Ms.

Philips’s medical expenses. At that point a claims adjuster reviewed the file, and

Safeway contacted Ms. Phillips’s attorney with an offer to settle all medical claims.

Louisiana Revised Statute 22:658(A)(3) requires an insurer to initiate

adjustment of a claim within fourteen days after notification of the loss. Here, Ms.

Phillips notified Safeway of the accident on March 30 or 31, 2007, and first sent in

1
The June 18, 2004 letter states, in pertinent part:

Enclosed are copies of the following medical records: Medical reports of Dr. Robert
K. Rush dated April 7, 2004 and June 9, 2004, covering his treatment of Ms. Phillips;
and, records of Guidroz Physical Therapy covering treatment of Ms. Phillips from
May 5, 2004 through May 21, 2004. Also enclosed for payment are the following
medical bills: Dr. Robert K. Rush for treatment of Ms. Phillips from April 7, 2004
through May 11, 2004, in the amount of $220.00; Guidroz Physical Therapy for
treatment of Ms. Phillips from May 5, 2004 through May 21, 2004, in the amount of
$680.00 of which $35.00 is for the enclosed medical records; St. Frances Cabrini
Hospital for treatment of Ms. Phillips on March 27, 2004 in the amount of $750.00;
and, Eckerd Drugs for medication purchased by Ms. Phillips in the amount of
$104.12. Also enclosed for payment is the bill of Source Corp for the enclosed
records from Cabrini Hospital in the amount of $29.06. I am also enclosing a letter
from Ms. Phillips’ employer, Comfort Inn, verifying her employment, her rate of pay
and the days of work that she missed as a result of her injuries.

The July 2, 2004 letter states, in pertinent part: “Enclosed for payment is the bill of
2

Acadian Ambulance Service in the amount of $610.20.”
3
The July 14, 2004 letter states, in pertinent part: “Enclosed for payment is the bill of
Central La. Imaging in the amount of $81.00 for treatment of Ms. Phillips on March 27, 2004.”
4
The letter of August 12, 2004 states, in pertinent part:
Enclosed for payment is the bill of Christus St. Francis Cabrini Hospital in the
amount of $750.00 for treatment of Ms. Phillips on March 27, 2004. Also enclosed
is a copy of a certified copy of the records of Christus St. Francis Cabrini Hospital
covering Ms. Phillips [sic] treatment in the emergency room on March 27, 2004.

2

a claim for medical expenses on June 18, 2004. From that time until October 12,

2004, Safeway’s only actions were to open a file and to send first Ms. Phillips and

then her retained counsel a letter, stating that it would not take any action on her

claim for medical expenses until all medical treatment was complete and she or her

attorney sent a demand letter to that effect. In fact, at the trial Safeway’s claim

adjuster testified that when Safeway receives medical expense claims, its policy is to

wait to review the file and begin settlement discussion until a claimant submits a

demand letter stating that all medical treatments are complete.

The statute’s mandate that loss adjustment be initiated requires that “the insurer

take some substantive and affirmative step to accumulate the facts that are necessary

to evaluate the claim.” McClendon v. Econ. Fire & Cas. Ins. Co., 98-1537, p. 7

(La.App. 3 Cir. 4/7/99), 732 So.2d 727, 731. This court has held that an insurance

company has not satisfied the requirements of La.R.S. 22:658(A)(3) when the

insurance company had opened a file and informed the plaintiffs that it “was going

to deal with the damaged personal property only after the other property damage

claims were handled.” Hollier v. State Farm Mut. Auto. Ins. Co., 01-592, p. 5

(La.App. 3 Cir. 10/31/01), 799 So.2d 793, 797.

In this almost identical situation, where Safeway adhered to its policy that it

would not review the claim or begin settlement discussions until all medical treatment

had been completed, I would follow Hollier, affirm the trial court’s factual finding

that Safeway had not taken a substantive and affirmative step to accumulate the facts

that are necessary to evaluate the claim, and affirm the trial court’s judgment

awarding Ms. Phillips $5,000.00 in penalties under La.R.S. 22:1220.

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