Simon v. Allstate Insurance Co.

422 So. 2d 1323, 1982 La. App. LEXIS 8355
CourtLouisiana Court of Appeal
DecidedNovember 12, 1982
DocketNo. 82-241
StatusPublished
Cited by1 cases

This text of 422 So. 2d 1323 (Simon v. Allstate Insurance Co.) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Simon v. Allstate Insurance Co., 422 So. 2d 1323, 1982 La. App. LEXIS 8355 (La. Ct. App. 1982).

Opinion

LABORDE, Judge.

Plaintiff, Percy Louis Simon, filed suit against Allstate Insurance Company and Ray Chevrolet Olds, Inc. seeking damages, penalties and attorney’s fees for the failure [1324]*1324of Allstate to have his automobile repaired within a reasonable time. Allstate filed a third party demand against Ray Chevrolet seeking indemnity and contribution in the event a judgment was rendered against them. Ray Chevrolet filed a reconventional demand against Simon and Allstate seeking to recover the amount owed for the repairs on Simon’s automobile.

The trial court, without assigning reasons, rendered judgment in favor of the defendants, Allstate and Ray Chevrolet dismissing Simon’s petition. No judgment was rendered in the reconventional demand. Simon appeals from the judgment dismissing his suit. The issues presented on appeal are as follows:

(1) Whether Simon is entitled to an award for penalties and attorney’s fees.
(2) Whether Simon is entitled to recover for loss of use and for property damage to his automobile.
(3) Whether Allstate is entitled to indemnity or contribution from Ray Chevrolet.

FACTS

On March 28, 1979, plaintiff, Percy Simon, was involved in an automobile accident. As a result of the accident, Simon’s 1976 Pontiac Grand Prix was damaged and was towed to Ray Chevrolet-Olds, Inc. Simon contacted Allstate Insurance Company who provided collision coverage on his automobile. On April 6, 1979, Allstate sent its adjuster to Ray Chevrolet to examine the extent of damage to Simon’s car.

The initial inspection yielded a repair estimate of $1,459.65. Since this estimate was considerably less than the value of the automobile, Allstate exercised its option under the policy to have the car repaired. Allstate authorized Ray Chevrolet to make repairs and tendered a draft to Simon for $1,209.65. ($1,459.65 minus $250.00 deductible)

In the initial inspection Allstate’s adjuster failed to thoroughly inspect Simon’s car. As it turned out, a thorough examination would have revealed extensive damage to the car’s frame. Had this damage been discovered initially, Simon’s car would have been declared a total loss. However, at the time it was determined that the car should have been a total loss, Allstate had spent a considerable amount of money trying to have the car repaired and Ray Chevrolet had already completed several repairs on the automobile. Therefore, Allstate decided to continue repair of Simon’s car.

The reeord reveals that January 30, 1980, ten (10) months after the accident, was the last date Ray Chevrolet performed work on Simon’s car. On April 6, 1980, Allstate issued a second draft to Simon in the amount of $1,855.46 to pay for the additional repairs. When Simon came to pick up his car he noticed cracks in the dashboard and upholstery. Ray Chevrolet refused to repair this damage. Simon then filed this suit to recover penalties and attorney’s fees for the failure to make timely repairs, for the loss of use of his automobile and for the property damage to the car’s interior.

PENALTIES AND ATTORNEY’S FEES

The record reveals that in April of 1979, Ray Chevrolet received authorization from Allstate to make repairs on Simon’s automobile. According to the records of Ray Chevrolet the last repair work was performed on January 30, 1980. Therefore, a period of at least nine months lapsed before repairs were completed.

Allstate’s adjuster, David Russo, testified that during the course of his employment as an adjuster, he had opportunities to observe cars repaired by different body shops and repair shops. He stated that it was his opinion that it should have taken five to six weeks for the repairs to have been made. He further stated that if there was a problem in locating body parts, which on American cars was not very common, it could take as long as eight weeks.

Ray Chevrolet’s service manager, Larry Denais, testified that assuming the original estimate had included all of the necessary parts, it should have taken only three months for the repairs to be completed. A [1325]*1325longer period would be required if necessary parts were not available. Denais further testified that as of August, 1979, no repair work on Simon’s car had commenced. A period of at least three months passed before Ray Chevrolet began work on Simon’s car.

Based on the record, we conclude that a maximum period of four months should have been required to repair Simon’s car. This conclusion takes into consideration any delays caused by the unavailability of parts. From this conclusion, we determine that the nine month period it actually took for the repairs to be made was an unreasonable time.

When an insurer elects to restore a wrecked vehicle to its former condition, rather than pay for its total loss, it must have the car repaired within a reasonable time. The failure to do so, even though possibly caused by its repairman’s inability to obtain necessary parts, constitutes arbitrary action which subjects the insurer to the penalty and reasonable attorney’s fees provided in LSA-R.S. 22:658. Hammack v. Resolute Fire Insurance Company, 233 La. 359, 96 So.2d 612 (La.1957); Lonco Trucking v. American Road Ins. Co., 378 So.2d 569 (La.App. 3rd Cir.1979). We therefore hold that the unreasonable time that it took Allstate to have the repairs made to Simon’s ear subjects them to the penalty and attorney’s fee provided for in LSA-R.S. 22:658.

As to the attorney’s fees, the record contains a stipulation in the amount of $2,273.00. To this we grant an additional $750.00 for the time and effort spent on appeal.

The penalty to be imposed will be 12% on $3,465.00 (the total loss value of the vehicle as stipulated by the parties). Allstate argues that the 12% should be imposed on the difference between the total loss value and the amounts tendered by Allstate for the repair costs. We disagree. The penalty is being assessed not because the repair costs were not tendered timely but because the repairs were not completed timely. To allow a deduction for the repair costs tendered in a situation such as the present case would defeat the purpose of the penalty provision. For example, in Lonco Trucking v. American Road Ins. Co., supra, the repair costs paid by American were $22,000.00 while the actual value of the truck was $17,000.00. Using Allstate’s computation, no penalty would be owed even though American was arbitrary in not repairing the truck timely. This is not the result contemplated by LSA-R.S. 22:658. Therefore, the 12% penalty is to be imposed on the total loss value of the automobile.

LOSS OF USE AND PROPERTY DAMAGE

Our second issue to resolve is whether Simon is entitled to recover for loss of use and for property damage to his automobile. The record reveals that Simon’s car was parked on Ray Chevrolet’s lot from the middle of April, 1979, to August, 1979, before repairs were commenced. During this period the windows were rolled up. Simon testified that the only time the car was moved was when the grass on the lot had to be cut. This exposure caused the leather upholstery and dashboard of Simon’s car to crack. Simon demanded that Ray Chevrolet remedy this damage but they refused. Simon’s suit seeks recovery for this property damage as well as for loss of use of his automobile.

Relying on our decision in Lonco Trucking v. American Road Ins. Co.,

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Bluebook (online)
422 So. 2d 1323, 1982 La. App. LEXIS 8355, Counsel Stack Legal Research, https://law.counselstack.com/opinion/simon-v-allstate-insurance-co-lactapp-1982.