Southern Message Service, Inc. v. Commercial Union Ins. Co.

647 So. 2d 398, 1994 La. App. LEXIS 3255, 1994 WL 680024
CourtLouisiana Court of Appeal
DecidedDecember 7, 1994
Docket26311-CA
StatusPublished
Cited by6 cases

This text of 647 So. 2d 398 (Southern Message Service, Inc. v. Commercial Union Ins. 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
Southern Message Service, Inc. v. Commercial Union Ins. Co., 647 So. 2d 398, 1994 La. App. LEXIS 3255, 1994 WL 680024 (La. Ct. App. 1994).

Opinion

647 So.2d 398 (1994)

SOUTHERN MESSAGE SERVICE, INC., Plaintiff-Appellant
v.
COMMERCIAL UNION INS. CO., et al., Defendants-Appellees.

No. 26311-CA.

Court of Appeal of Louisiana, Second Circuit.

December 7, 1994.
Writ Denied March 10, 1995.

*399 Tyler & Johnson by Tommy J. Johnson, Shreveport and Kantrow, Spaht, Weaver & *400 Blitzer by Carlos G. Spaht, Baton Rouge, for appellant.

Cook, Yancey, King & Galloway by Brian A. Homza and Bodenheimer, Jones, Klotz & Simmons by Mary L. Coon Blackley, Shreveport, for appellees.

Before MARVIN, SEXTON and STEWART, JJ.

STEWART, Judge.

In this action in which it was stipulated by all litigants that a roofing contractor was negligent in failing to adequately protect plaintiff's building and its contents against rainwater damage, the plaintiff, Southern Message Service, Inc., appeals the trial court's judgment, seeking to increase (1) the award of damages against the roofing contractor and (2) the attorney fee and statutory penalty assessed against plaintiff's property insurer who was found to have acted arbitrarily, capriciously, without probable cause in the manner in which it adjusted plaintiff's claim.

The roofing contractor, McWaters, and his liability insurer, Northern Assurance Company of America, also appeal, seeking to reduce the award of damages and have plaintiff found comparatively negligent because of its failure to minimize its loss after the rainwater damage occurred. Plaintiff's property insurer, Zurich Insurance Company, who was subrogated to $22,250 it paid plaintiff, does not appeal the amounts for which it was cast, the 12 percent penalty on $58,675, the total monetary damages, and the $5,000 attorney fee. As appellee, Zurich argues against increasing the awards against it.

We affirm in all respects.

FACTS

Southern Message Service, Inc., a company in the radio common carrier industry, stored some of its radio paging equipment in a warehouse at 709 Crockett Street in Shreveport, Louisiana. The equipment consisted primarily of older model pocket pagers and mobile, non-cellular, rotary dial phones requiring antenna and base station for operation. Southern Message contracted with defendant-appellee, Mike McWaters d/b/a Mike McWaters Construction and Roofing Company, to repair the warehouse roof. During the night of February 16, 1988, while repair work was in progress, a storm erupted. McWaters had inadequately covered the roof with plastic, allowing rainwater to seep into the equipment.

Southern Message contacted its property insurer, Zurich Insurance Company, providing it with a list of the damaged goods. Robert W. Kupp of RE Electronics Service Corporation investigated the premises for Zurich and reported that damages totaled $22,500. Southern Message, through Leo Wiman, gave Zurich a proof of loss statement, indicating that $142,329 worth of property had been damaged. Zurich rejected this figure and asked Southern Message to execute another proof of loss statement in the amount of $22,250, which represents the $22,500 estimate provided by Kupp less a $250 deductible. Southern Message refused the request.

On February 10, 1989, Southern Message filed suit against McWaters and his insurers, Commercial Union Insurance Company and Northern Assurance Company of America[1], and against its own insurer, Zurich. After suit was filed, and more than a year after the property was damaged, Zurich tendered unconditional payment of $22,250.

At trial it was stipulated that McWaters and Northern were liable for the damage. Thus, the issues were limited to the amount of damages, if any, and whether penalties and attorney's fees should be assessed against Zurich for arbitrary and capricious behavior. The trial court found the testimony and evidence sufficient to conclude that most of the equipment had water damage or "detrimental contact with water." The court found that because of rapid technological advances, most of the damaged equipment was obsolete.

*401 Southern Message provided the court with expert testimony on the value of the equipment. Henry A. Frieberger, an electrical engineer, opined that the Pagecom Pagers and the Pageboy Pagers were valued at $50 each, for a total of $13,800. The rotary dial mobile telephones were valued at $57,000. The court acknowledged that Frieberger did not fully consider the obsolescence of the pagers when arriving at these figures.

The defendants also introduced expert testimony on the issue of damages. One defense expert, Mike Woelfel, appraised the pagers at between $10 and $20 each, for a total of $5,520. He assessed the telephones with a depreciated total value of $11,400.

The trial court assigned a $25 value to each of the 276 pagers, for a total of $6,900 and valued the telephones at $45,600. To arrive at the total damage figure, the court took $111,175, which was Southern Message's total damage estimate of the cost to repair or replace the damaged equipment, and subtracted the $6,900 value of the pagers and the $45,600 value of the telephones, for a total of $58,675, of which $22,250 is due Zurich.

Additionally, the court found that Zurich acted arbitrarily, capriciously, and without probable cause in failing to promptly tender payment to Southern Message. Hence, the court imposed a 12% penalty for the difference between the amount tended, or $22,250, and the amount of damages ultimately determined, or $58,675. Moreover, the court ordered that Zurich pay $5,000 in attorney's fees.

Southern Message appeals the judgment, asserting errors in the court's accepting witnesses as experts and in assessing inadequate damages, penalties, and attorney's fees. In response, Northern contends that Southern Message failed to meet its burden of proving that the equipment was damaged, that Southern Message was comparatively negligent, and that the trial court erred in admitting into evidence a report made by Dr. Melvin Zemek, who had died by the time the case went to trial.

For the following reasons, we affirm.

Expert Witnesses

Southern Message contends that the trial court abused its discretion in accepting Robert Kupp and Mike Woelfel as experts in the field of valuation of radio common carrier equipment. Both witnesses were called by the defendants. In its reply brief, Northern argues that Southern Message's witness, Henry A. Frieberger was not qualified to testify as an expert.

The authority for allowing opinion testimony by expert witnesses is found at LSA-C.E. Art. 702 and provides:

If scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert by knowledge, skill, experience, training, or education, may testify thereto in the form of an opinion or otherwise.

The trial court is vested with broad, albeit not unfettered, discretion in determining whether a witness qualifies to testify as an expert in his field. LSA-C.E. Art. 702 comment (d); Manchack v. Willamette Industries, Inc., 621 So.2d 649 (La.App. 2d Cir. 1993).

Because the Louisiana Code of Evidence is substantially a mirror image of the Federal Rules of Evidence, Louisiana courts often follow the example set by their Federal counterparts when deciding how to interpret code articles. Recently, the United States Supreme Court promulgated a new standard for the admission of expert testimony in Daubert v. Merrell Dow Pharmaceuticals,

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647 So. 2d 398, 1994 La. App. LEXIS 3255, 1994 WL 680024, Counsel Stack Legal Research, https://law.counselstack.com/opinion/southern-message-service-inc-v-commercial-union-ins-co-lactapp-1994.