Mrs. Yvonne Buras, Widow of Oliver v. Adolph v. Birmingham Fire Insurance Company of Pennsylvania

Fifth Circuit

Mrs. Yvonne Buras, Widow of Oliver v. Adolph v. Birmingham Fire Insurance Company of Pennsylvania

327 F.2d 238, 1964 U.S. App. LEXIS 6759

CourtCourt of Appeals for the Fifth Circuit

DecidedJanuary 10, 1964

Docket20421_1

StatusPublished

Cited by8 cases

This text of 327 F.2d 238 (Mrs. Yvonne Buras, Widow of Oliver v. Adolph v. Birmingham Fire Insurance Company of Pennsylvania) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Mrs. Yvonne Buras, Widow of Oliver v. Adolph v. Birmingham Fire Insurance Company of Pennsylvania, 327 F.2d 238, 1964 U.S. App. LEXIS 6759 (5th Cir. 1964).

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Opinion

PER CURIAM.

The narrow question presented here is whether the exaction provided for by LSA-R.S. 22:656 1 is interest, or is not interest, in determining whether the amount involved is sufficient to hold federal jurisdiction over this case,

The district court determined, upon appellant’s declaration, that the exaction was in the nature of a penalty, not interest. We think this holding is correct.

The State of Louisiana has a statutory interest rate of 5%, which is in derogation of deciding this 6% exaction interest also. Moreover, the 6% is not due if the insurance contract is settled within 60 days. The federal statute 2 sets the minimum in removals at $10,-000.00, exclusive of interest and costs. We hold that this exaction is intended to *239 be in the nature of a coercive penalty towards prompt settlement. The statutory amount here sued for is, therefore, sufficient. The appellant’s complaint states, according to LSA-R.S. 22:656, that the

«* * * defendant has refused and/or neglected to pay petitioner under said policy [for more than 60 days], and said refusal on the part of the defendant is arbitrary, capricious, unwarranted and without probable cause and therefore the Petitioner is entitled to an award of penalties as provided for in the Insurance Code of the State of Louisiana »

^ ^ ,, . , , The Supreme Court and this Court has uniformly, m resolving such questions, looked to the amount the plaintiff m good faith demands and, here, it ex- . .... ... .. ’ ’

Affirmed.

1

. “§ 656 Payment of claims; life policies; penalty

“All death claims arising under policies of insurance issued or delivered within this state shall be settled by the insurer within sixty days from the date of receipt of due proof of death and should the insurer fail to do so without just cause, then the amount due shall bear interest at the rate of six per cent per annum from date of receipt of due proof of death by the insurer until paid.” Amended and reenacted Acts 1958, No. 125.

2

. 28 U.S.C.A. § 1332.

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PER CURIAM.

The narrow question presented here is whether the exaction provided for by LSA-R.S. 22:656 1 is interest, or is not interest, in determining whether the amount involved is sufficient to hold federal jurisdiction over this case,

The district court determined, upon appellant’s declaration, that the exaction was in the nature of a penalty, not interest. We think this holding is correct.

The State of Louisiana has a statutory interest rate of 5%, which is in derogation of deciding this 6% exaction interest also. Moreover, the 6% is not due if the insurance contract is settled within 60 days. The federal statute 2 sets the minimum in removals at $10,-000.00, exclusive of interest and costs. We hold that this exaction is intended to *239 be in the nature of a coercive penalty towards prompt settlement. The statutory amount here sued for is, therefore, sufficient. The appellant’s complaint states, according to LSA-R.S. 22:656, that the

«* * * defendant has refused and/or neglected to pay petitioner under said policy [for more than 60 days], and said refusal on the part of the defendant is arbitrary, capricious, unwarranted and without probable cause and therefore the Petitioner is entitled to an award of penalties as provided for in the Insurance Code of the State of Louisiana »

^ ^ ,, . , , The Supreme Court and this Court has uniformly, m resolving such questions, looked to the amount the plaintiff m good faith demands and, here, it ex- . .... ... .. ’ ’

Affirmed.

1

. “§ 656 Payment of claims; life policies; penalty

“All death claims arising under policies of insurance issued or delivered within this state shall be settled by the insurer within sixty days from the date of receipt of due proof of death and should the insurer fail to do so without just cause, then the amount due shall bear interest at the rate of six per cent per annum from date of receipt of due proof of death by the insurer until paid.” Amended and reenacted Acts 1958, No. 125.

2

. 28 U.S.C.A. § 1332.

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327 F.2d 238, 1964 U.S. App. LEXIS 6759, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mrs-yvonne-buras-widow-of-oliver-v-adolph-v-birmingham-fire-insurance-ca5-1964.

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