Estate of John. F. Munsterman v. Unitrin Auto & Home Insurance Co.

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

20-209

ESTATE OF JOHN F. MUNSTERMAN and
MARIE S. MUNSTERMAN

VERSUS

UNITRIN AUTO & HOME INSURANCE COMPANY

**********

APPEAL FROM THE
ALEXANDRIA CITY COURT
PARISH OF RAPIDES, NO. 142,847
HONORABLE RICHARD E. STARLING, JR.,
CITY COURT JUDGE

**********

PHYLLIS M. KEATY
JUDGE

**********

Court composed of Billy H. Ezell, Phyllis M. Keaty, and D. Kent Savoie, Judges.

AFFIRMED.

Sidney W. Degan, III
Travis L. Bourgeois
Karl H. Schmid
Degan, Blanchard & Nash
400 Poydras Street, Suite 2600
New Orleans, Louisiana 70130
(504) 529-3333
Counsel for Defendant/Appellant:
Unitrin Auto & Home Insurance Company

William M. Ford
Susan F. Fiser
The Ford Law Firm
1630 Metro Drive
Alexandria, Louisiana 71301
(318) 442-8899
Counsel for Plaintiffs/Appellees:
John W. Munsterman, Independent Executor of the
Estate of John F. Munsterman
Marie S. Munsterman

KEATY, Judge.

Appellant seeks review of the trial court’s judgment granting Appellees’ claim

for property damage coverage under an insurance policy. For the following reasons,

the trial court’s judgment is affirmed.

FACTS AND PROCEDURAL HISTORY

This insurance coverage issue arises from a fire, windstorm, and extended

coverage insurance policy regarding a house located at 4304 Wellington Boulevard

in Alexandria, Louisiana. The policy was purchased by John W. Munsterman, as

the executor of the estate of his deceased father, John F. Munsterman, to provide

coverage to a home that is occupied by his father’s elderly widow, Marie S.

Munsterman. The policy was issued by Unitrin Auto & Home Insurance Company

and provided coverage from February 4, 2017 through February 4, 2018. On April 2,

2017, a hail storm occurred and damaged the roof. The damaged roof was not

discovered by the executor until July 8, 2018. At that time, a notice of loss was

reported to Unitrin. Unitrin’s policy contains an exclusionary clause and a notice

provision, both of which require that a notice of loss be reported within 365 days of

its occurrence. On August 27, 2018, Unitrin denied the claim because it did not

receive notice of loss before April 2, 2018, i.e., within 365 days of the hail storm on

April 2, 2017.

On January 10, 2019, the Estate and Ms. Munsterman (hereinafter collectively

referred to as “the Estate”) filed a suit for coverage under the policy. Therein, the

Estate sought $20,868.00 for the cost of replacing the roof, along with penalties,

attorney fees, and court costs. Unitrin filed an answer. Unitrin subsequently filed a

motion for summary judgment, arguing that the policy does not provide coverage

for the claims asserted by the Estate because it reported the loss more than 365 days

after the date of loss. Unitrin’s motion for summary judgment was heard on

September 13, 2019, after which the trial court took the matter under advisement.

On October 30, 2019, the trial court denied Unitrin’s motion for summary judgment

with respect to coverage. However, it granted Unitrin’s partial motion for summary

judgment dismissing the Estate’s other “bad faith” claims. Unitrin’s subsequent

Application for Supervisory Writs seeking a reversal of the trial court’s denial of its

motion for summary judgment was denied by this court in Estate of John S.

Munsterman v. Unitrin Auto & Home Insurance Co., 19-760 (La.App. 3 Cir. 12/2/19)

(unpublished writ).

This matter proceeded to trial on December 11 and 19, 2019. On January 3,

2020, the trial court entered a judgment in favor of the Estate and against Unitrin for

$20,868.00, plus legal interest from date of judicial demand until paid, and for all

court costs. Unitrin appealed and filed an appellant brief. In response to Unitrin’s

appeal, the Estate filed an answer and appellee brief. Unitrin filed a reply brief and

response to the Estate’s answer.

On appeal, Unitrin asserts the following assignments of error:

1. The trial court erred in granting judgment in favor of the Estate.

2. The trial court erred in finding that the Unitrin policy provides
coverage for the claim and damages asserted in this lawsuit.

3. The trial court erred in denying summary judgment.

STANDARD OF REVIEW

“Interpretation of an insurance policy is a question of law[.]” Hardie v. Prof’l

Physical Rehab. Hosp., LLC, p. 2 (La.App. 3 Cir. 9/29/04), 883 So.2d 510, 512.

Questions of law are reviewed under the de novo standard of review. Boes Iron

Works, Inc. v. Gee Cee Grp., Inc., 16-207 (La.App. 4 Cir. 11/16/16), 206 So.3d 938,

writ denied, 17-40 (La. 2/10/17), 216 So.3d 45.

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DISCUSSION

I. Assignments or Error

Unitrin’s three assignments of error address the same issue, i.e., the validity

of an exclusionary clause and condition in a contract which provides a one-year

limitation from the date of loss within which the notice of loss must be reported to

the insurer, in light of statutory authority which extends the time to assert a right of

action against the insurer to two years from the date of loss. In its judgment, the trial

court found that coverage exists pursuant to statutory authority despite the policy

language which excludes coverage for claims where the notice of loss is made more

than 365 days after the date of loss. The policy language at issue provides:

SECTION I - EXCLUSIONS

....

The following Paragraph 3. is added:

3. In case of a loss to covered property, we will not provide
coverage under this policy unless your notice of loss is received
by us no later than 365 days after the date of the loss.

SECTION I - CONDITIONS

2. Your Duties After Loss

The lead-in sentence is replaced by the following:

In case of a loss to covered property, we have no duty to provide
coverage under this policy if the failure to comply with the
following duties is prejudicial to us. You or an “insured” seeking
coverage are responsible for the following duties:

Paragraph 2.a. is replaced by the following:

2.a. Give prompt notice to us or our agent. However, if a loss
is reported to us more than 365 days after the date of the
loss, even if the delay in notice is not prejudicial to us,
coverage is excluded as stated under Section I –
Exclusions[.]

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Unitrin maintains that the foregoing policy provisions were not complied with

because the Estate reported the loss more than 365 days after the date of loss. As

such, Unitrin contends the trial court should have found that coverage for the Estate’s

damage was excluded under the policy.

According to the evidence in the record, the policy provided coverage from

February 4, 2017 through February 4, 2018. On April 2, 2017, a hail storm occurred

and damaged the roof. It is undisputed that the loss occurred during the period of

coverage. The damaged roof was not discovered by the executor until July 8, 2018,

at which time the loss was immediately reported to Unitrin. This delay in reporting

the loss, according to Munsterman’s testimony, arose because the homeowner is

elderly and was unaware of the hail damage to the roof. Unitrin denied the claim

because it did not receive notice of the loss before April 2, 2018, i.e., within 365

days of the date of loss as required in the policy. Evidence reveals that the roof was

repaired during the policy period. In light of the foregoing, we must determine

whether the insurance policy provides coverage or whether an exclusion prohibits it.

“An insurance policy is an agreement between the parties and should be

interpreted by using ordinary contract principles.” Smith v. Matthews, 611 So.2d

1377, 1379 (La.1993). “If the language in an insurance contract is clear and

unambiguous, the agreement must be enforced as written.” Dunn v. Potomac Ins.

Co. of Ill., 94-2202, p. 6 (La.App. 1 Cir. 6/23/95), 657 So.2d 660, 663. The “courts

should not strain to find ambiguity where none exists.” Strickland v. State Farm Ins.

Cos., 607 So.2d 769, 772 (La.App. 1 Cir. 1992). However, if there is any doubt or

ambiguity as to the meaning of a provision in an insurance policy, it must be

construed in favor of the insured and against the insurer. Kirby v. Ashford, 15-1852

(La.App. 1 Cir. 12/22/16), 208 So.3d 932. “When the ambiguity relates to an

exclusionary clause, the law requires that the contract be interpreted liberally in
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favor of coverage.” Borden, Inc. v. Howard Trucking Co., Inc., 454 So.2d 1081,

1086 (La.1983). “Whether a contract is ambiguous or not is a question of law.”

Strickland, 607 So.2d at 772.

An insurer has the burden of proving that a loss falls within a policy exclusion.

La. Maint. Servs., Inc. v. Certain Underwriters at Lloyd’s of London, 616 So.2d 1250

(La.1993). Additionally, in determining whether an exclusion applies to preclude

coverage, courts are guided by the well-recognized rule that an exclusionary clause

in an insurance policy must be strictly construed. Calogero v. Safeway Ins. Co. of

La., 99-1625 (La. 1/19/00), 753 So.2d 170. Nonetheless, “an insurance policy,

including its exclusions, should not be interpreted in an unreasonable or strained

manner so as to enlarge or to restrict its provisions beyond what is reasonably

contemplated by its terms or so as to achieve an absurd conclusion.” N. Am.

Treatment Sys., Inc. v. Scottsdale Ins. Co., 05-81, p. 20 (La.App. 1 Cir. 8/23/06), 943

So.2d 429, 443, writs denied, 06-2918, 06-2803 (La. 2/16/07), 949 So.2d 423, 424.

“In the absence of a statutory prohibition, a clause in an insurance policy fixing a

reasonable time to institute suit is valid.” Taranto v. La. Citizens Prop. Ins. Corp.,

10-105, p. 8 (La. 3/15/11), 62 So.3d 721, 728.

In this case, the policy language clearly and unambiguously excludes

coverage for a loss if the notice of loss is made more than 365 days after the date of

loss. Thus, at first glance, it seems the Estate would be excluded from coverage

because the loss was discovered and reported more than 365 days after the date of

loss. However, in 2007, the Legislature enacted La.R.S. 22:868(B), which extends

the time in which a right of action can be made to two years after the inception of

the loss. Specifically, La.R.S. 22:868 (emphasis added) provides in pertinent part:

B. No insurance contract delivered or issued for delivery in
this state and covering subjects located, resident, or to be performed in
this state, or any health and accident policy insuring a resident of this
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state regardless of where made or delivered, shall contain any condition,
stipulation, or agreement limiting right of action against the
insurer to a period of less than twenty-four months next after the
inception of the loss when the claim is a first-party claim, as defined
in R.S. 22:1692, and arises under any insurance classified and defined
in R.S. 22:47(6), (10), (11), (12), (13), (15), and (19) or to a period of
less than one year from the time when the cause of action accrues in
connection with all other insurances unless otherwise specifically
provided in this Code.

C. Any such condition, stipulation, or agreement in violation
of this Section shall be void, but such voiding shall not affect the
validity of the other provisions of the contract.

In this case, the statutory authority in La.R.S. 22:868(B), which extends the

time to assert a right of action against the insured to two years, invalidates the clause

and condition in the policy at issue which limits the time to file a notice of loss to

one year. Moreover, the voided provisions in the policy at issue do not affect the

validity of the other provisions of the contract. Accordingly, the trial court correctly

determined that the Estate was entitled to coverage under the policy.

Unitrin claims that La.R.S. 22:868 applies only to limitations regarding the

time or right to file a lawsuit. Unitrin asserts that the statute does not apply to other

conditions in a policy, such as the one-year time period to assert a notice of loss,

which must be satisfied first and before coverage can attach under the policy. In

support, Unitrin cites Hood v. Cotter, 08-215, 08-237 (La. 12/2/08), 5 So.3d 819. In

Hood, Id. at 825 (quoting Livingston Parish School Board v. Fireman’s Fund

American Insurance Co., 282 So.2d 478 (La.1973)), the Louisiana Supreme Court

explained: “‘Where a policy unambiguously and clearly limits coverage to acts

discovered and reported during the policy term, such limitation of liability is not per

se impermissible.’” The Hood court noted, however, that the foregoing is applicable

to claims made policies rather than occurrence made policies. The supreme court

explained:

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The major distinction between the “occurrence” policy and the “claims
made” policy constitutes the difference between the peril insured. In
the “occurrence” policy, the peril insured is the “occurrence” itself.
Once the “occurrence” takes place, coverage attaches even though the
claim may not be made for some time thereafter. While in the “claims
made” policy, it is the making of the claim which is the event and peril
being insured and, subject to policy language, regardless of when the
occurrence took place.

Id. at 826-27 (quoting Anderson v. Ichinose, 98-2157 (La. 9/8/99), 760 So.2d 302).

In this case, the trial court correctly found Unitrin’s reliance on Hood was

misplaced because Hood involved a claims made policy whereas the instant policy

involves an occurrence policy. The policy at issue is an occurrence policy because

the peril insured, i.e., hail, is the occurrence itself. Once the occurrence takes place,

coverage attaches even though the claim may not be made for some time thereafter.

Thus, the limitation of liability applicable to a claims made policy does not apply to

the instant occurrence policy.

On the other hand, we find that the reasoning in Shreve v. State Farm Fire &

Casualty Co., 52,032 (La.App. 2 Cir. 5/23/18), 247 So.3d 1175, writ denied, 18-

1058 (La. 10/29/18), 255 So.3d 574, is instructive with respect to this assignment of

error and our discussion below regarding bad faith damages. In Shreve, the second

circuit noted that although the insurer premised its motion for summary judgment

on a void policy provision that limited the time for the insureds to bring their action

to one year, the insureds pointed out that the insurer could not reduce the insureds’

time to file suit to a period of less than two years.

In accordance with the reasoning in Shreve, 247 So.3d 1175, and La.R.S.

22:868, we find that Unitrin’s denial is based upon void policy provisions. These

policy provisions are void because Unitrin relied on them to reduce the Estate’s time

to assert a right of action to one year in contravention to the two years allowed under

La.R.S. 22:868. Accordingly, Unitrin’s assignments of error are without merit.

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II. Answer to Appeal

In response to Unitrin’s appeal, the Estate filed an answer. In its answer and

appellee brief, it seeks penalties for Unitrin’s alleged breach of duty of good faith

and fair dealing by misleading the Estate as to the applicable prescriptive period in

violation of La.R.S. 22:1973, which provides:

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 of this Section:

....

(4) Misleading a claimant as to the applicable prescriptive
period.

....

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

The Estate is also seeking penalties, attorney fees, and costs for Unitrin’s

arbitrary and capricious conduct in failing to pay the claim within thirty days after

the Estate’s proof of loss. In support, it cites La.R.S. 22:1892, which provides:

A. (1) All insurers issuing any type of contract . . . shall
pay the amount of any claim due any insured within thirty days after
receipt of satisfactory proofs of loss from the insured or any party in
interest. . . .

....

B. (1) Failure to make such payment within thirty days
after receipt of such satisfactory written proofs and demand therefor or
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failure to make a written offer to settle any property damage claim,
including a third-party claim, within thirty days after receipt of
satisfactory proofs of loss of that claim, as provided in Paragraphs (A)(1)
and (4) of this Section, respectively, or failure to make such payment
within thirty days after written agreement or settlement as provided in
Paragraph (A)(2) of this Section when such failure is found to be
arbitrary, capricious, or without probable cause, shall subject the
insurer to a penalty, in addition to the amount of the loss, of fifty percent
damages on the amount found to be due from the insurer to the insured,
or one thousand dollars, whichever is greater, payable to the insured, or
to any of said employees, or in the event a partial payment or tender has
been made, fifty percent of the difference between the amount paid or
tendered and the amount found to be due as well as reasonable attorney
fees and costs. Such penalties, if awarded, shall not be used by the
insurer in computing either past or prospective loss experience for the
purpose of setting rates or making rate filings.

Louisiana jurisprudence provides that La.R.S. 22:18921 and La.R.S. 22:19732

are “penal in nature and must be strictly construed.” Reed v. State Farm Mut. Auto.

Ins. Co., 03-107, p. 13 (La. 10/21/03), 857 So.2d 1012, 1020. The Reed court

explained:

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. . . . The sanctions of penalties and attorney fees
are not assessed unless a plaintiff’s proof is clear that the insurer was in
fact arbitrary, capricious, or without probable cause in refusing to pay.
The statutory penalties are inappropriate when the insurer has a
reasonable basis to defend the claim and acts in good-faith reliance on
that defense. Especially when there is a reasonable and legitimate
question 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.

Both [La.R.S. 22:1973] and [La.R.S. 22:1892] require proof that
the insurer was “arbitrary, capricious, or without probable cause,” a
phrase that is synonymous with “vexatious.” This court has noted that
“vexatious refusal to pay” means unjustified, without reasonable or
probable cause or excuse. Both phrases describe an insurer whose
willful refusal of a claim is not based on a good-faith defense.

Whether or not a refusal to pay is arbitrary, capricious, or without
probable cause depends on the facts known to the insurer at the time of
its action, . . . Because the question is essentially a factual issue, the
1
La.R.S. 22:1892 is formerly cited as La.R.S. 22:658.
2
La.R.S. 22:1973 is formerly cited as La.R.S. 22:1220.
9

trial court’s finding should not be disturbed on appeal absent manifest
error. However, when the record does not support the trial court’s
determination on this issue, the trial court’s decision will be reversed.

Id. at 1020-21 (footnote omitted) (citations omitted).

In Hayes v. Richard, 634 So.2d 1384, 1388 (La.App. 3 Cir. 3/2/94) (quoting

Cameron State Bank v. American Employers’ Insurance Co., 401 So.2d 1090

(La.App. 3 Cir. 1981)), this court further explained:

Where an insurer’s interpretation of its policy is reasonable
and not contrary to any existing jurisprudence, the denial of
a claim is not arbitrary so as to require the imposition of
penalties and the insurer has a right to a judicial
determination of the issues. While a court may disagree with
the interpretation the insurer places upon its policy, its
actions in refusing to pay should not necessarily subject it to
the penalty provisions of the statute.

Our review reveals that the trial court denied penalties and attorney fees on

two occasions. The first occasion occurred when it granted Unitrin’s alternative

motion for partial summary judgment and dismissed the Estate’s extracontractual

claims. In its reasons for ruling, the trial court stated:

The court does grant the request for partial summary judgment
even though it disagrees on the issue of coverage. There was at least a
reasonable argument that coverage may not apply in this case and it
appears that the jurisprudence has not addressed the issue directly.
Punitive statutes must be strictly construed.

The Estate attempted to reassert its bad faith claims at the instant trial after

the closing of its case. The trial court denied reconsidering its prior ruling on

penalties and attorney fees. It clarified, however, its previous ruling by stating:

[T]he law is pretty clear that if there is any reasonable argument to the
contrary penalties and attorney’s fees are not allowed. It’s . . . a punitive
claim and when that’s the case that court has to . . . have it clearly shown
to them that there is a reason to apply [and] to assess penalties and
attorney’s fees on top of the prior issue. I think my ruling indicated this,
if not I’m going to clear it up. . . [P]reviously what I was saying is while
I don’t agree with the reading of the interpretation of the statute as far
as the way Unitrin interpreted [it, t]heir position was it’s a time frame,
a two-year time to file a suit, not necessarily deal with the time to prove,

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to report the loss. And the policy did say [there is] three-hundred-sixty
[five] days to report the loss.

. . . . I just didn’t believe that it arose to the level that it should be penalty
and attorneys’ fees. . . . I think the statute was extended to allow people
two-years versus one-year to report a claim. I feel like it should have
been paid. That’s why I ruled like it did. But that’s not for penalties
necessarily[.]

The evidence at trial included the affidavit of Kelly Trochak. Our review of

the affidavit in the record reveals that Trochak is a senior claims manger employed

by Kemper Insurance, an authorized representative of Unitrin. She explained that in

order to investigate the instant loss, Unitrin conducted a recorded interview of

Munsterman on July 20, 2018. She explained that Munsterman confirmed the date

of loss was April 2, 2017, which was sixteen months before the date the notice of

loss was reported to Unitrin. Trochak revealed that as part of Unitrin’s investigation

of the loss, it obtained a hail verification report on August 23, 2018, which confirmed

that a hail/windstorm event occurred at or near the Estate’s property on April 2, 2017.

Trochak acknowledged that Unitrin subsequently denied the claim in writing on

August 27, 2018, based on the paragraph three exclusion and notice provision in the

policy, both of which require that the loss be reported to Unitrin within 365 days of

the occurrence.

The record also contains a transcript of the recorded interview discussed by

Trochak. The transcript confirms that an interview occurred on July 20, 2018,

between Jeff Statler3 of Kemper Insurance and Munsterman. Statler explained the

main issue with providing coverage was that the Estate’s notice of loss was more

than 365 days after the date of loss in contravention of the policy’s exclusionary

clause and condition. Statler informed Munsterman that the policy’s terms and

3
“Statler” has been spelled “Stiteler” in parts of the record. For clarity, we will refer to
him as “Statler” throughout this opinion.
11

conditions exclude coverage for a loss reported more than 365 days after the date of

loss. He expressed the possibility that coverage may not be afforded under the policy.

When Munsterman informed Statler about a “two-year prescription period,” Statler

responded, “I’m not saying it’s not covered, I’m just saying that there’s a

possibility . . . but we’re going to review the statute. . . . So if there’s something, if

we can find coverage, then we’ll provide coverage.” Statler again stated, “So if

there’s a statute that overrides it, we will . . . provide coverage.”

Unitrin’s written denial is also in the record. Therein, Unitrin cites the facts

as follows: the original claim was reported to Unitrin on July 11, 2018, with a

reported date of loss as April 2, 2017; a hail storm occurred on April 2, 2017; a

review of the policy reveals that any loss must be reported to Unitrin within 365 of

the date of loss; and, the loss at issue was reported to Unitrin 465 days after the

reported date of loss. Unitrin then cited the applicable condition and exclusion and

stated: “We regret to inform you that there is no coverage for this loss as the

conditions of the policy clearly state that we will not provide coverage under this

policy unless your notice of loss is received by us no later than 365 days after the

date of loss.”

Louisiana jurisprudence is instructive with respect to whether bad faith

damages are warranted for an insurer’s denial to pay a claim under a policy. In

Shreve, 247 So.3d 1175, the second circuit affirmed the trial court’s judgment that

the insurer had a reasonable basis to initially deny, and continue to deny through

trial, the insureds’ claim. The second circuit explained that the insurer did not

mislead the homeowners about the time in which they had to file suit against their

insurer for bad faith and to recover for repairs needed following the discovery of a

crack in their home’s foundation. The appellate court explained that the insurer’s

alleged misleading could not be a basis to find that the insurer breached its duty of
12

good faith and fair dealing because no time period was mentioned in the claim-denial

letter. As explained above, the second circuit noted that although the insurer

premised its motion for summary judgment on a void policy provision that limited

the time for the insureds to bring their action to one year, the insureds pointed out

that the insurer could not reduce the insureds’ time to file suit to a period of less than

two years. Specifically, the appellate court explained:

State Farm did not lull the Shreves into a false sense of security
by misleading them about the time in which they had to file suit. No
time period was even mentioned in the claim denial letter. Moreover,
although counsel for State Farm premised its motion for summary
judgment on a void policy provision, the Shreves’ counsel quickly
pointed out in his opposition memorandum that State Farm could not
reduce the Shreves’ time to file suit to a period of less than two years.

Id. at 1190.

We find that the evidence in the record shows that Unitrin had legitimate and

reasonable doubts about coverage based upon the applicable notice provision and

exclusion. Thus, Unitrin had a reasonable basis to defend the claim and acted in

good-faith reliance on that defense. Although the trial court disagreed with the

interpretation that Unitrin placed on its policy with respect to the exclusion, its

actions in refusing to pay should not necessarily subject it to the penalty provisions

of the statutes. See Hayes, 634 So.2d 1384. Specifically, Statler did not lull the

Estate into a false sense of security by misleading it about the time in which it could

file suit. See Shreve, 247 So.3d 1175. This is apparent in the recorded conversation

when Munsterman stated that there was a two-year time period in which to file a

claim and referred to “a two-year prescription period.” Moreover, there was no time

period mentioned in the claim-denial letter indicating the time within which suit

must be filed. Rather, the only time frame mentioned in the denial letter was the

time in which a notice of loss must be reported to Unitrin, i.e., within 365 after the

date of loss. The foregoing evidence supports the trial court’s finding that Unitrin’s
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handling of the claim was not arbitrary and capricious. As such, the trial court was

not manifestly erroneous in declining to award bad faith penalties and attorney fees.

DECREE

For the foregoing reasons, the trial court’s judgment is affirmed. All costs

associated with this appeal are assessed to Defendant/Appellant, Unitrin Auto &

Home Insurance Company.

AFFIRMED.

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