Mason v. Shelter Mut. Ins. Co.

209 So.3d 860

Alfrieda Onezime MASON

v.SHELTER MUTUAL INSURANCE COMPANY

16–135

Court of Appeal of Louisiana, Third Circuit.

December 28, 2016

J. Lomax Jordan, Jr., 1817 West University Avenue, Lafayette, LA 70506, (337) 233–9984, COUNSEL FOR PLAINTIFF/APPELLANT: Alfrieda Onezime Mason

Thomas R. Hightower, III, Post Office Drawer 51288, Lafayette, LA 70505, (337) 233–0555, COUNSEL FOR DEFENDANT/APPELLANT: Shelter Mutual Insurance Company

Court composed of Sylvia R. Cooks, John D. Saunders, Marc T. Amy, Phyllis M. Keaty and D. Kent Savoie, Judges.

COOKS, Judge.

The plaintiff, Alfrieda Onezime Mason, pursued recovery from her homeowner's insurer, Shelter Marine Insurance Company, after her home sustained water damage. Although the insurer offered coverage for the event, it rejected the plaintiff's demand for various items, including plumbing costs associated with broken plumbing and remediation costs necessitated by the presence of flooring found to contain asbestos. The plaintiff filed this matter, seeking damages as well as penalties and attorney fees. Following trial, the trial court awarded the plaintiff repair costs, as well as penalties and attorney fees. Both parties appeal.

FACTS AND PROCEDURAL HISTORY

Ms. Mason alleges she discovered water on the floor of the kitchen and laundry room of her home on the morning of September 5, 2011. Although a plumber initially replaced the home's hot water tank,¹ the main valve to the house was turned off after Ms. Mason found that water continued to seep into the home. She contacted her homeowner's insurer, Shelter, the following day. Ms. Mason alleged in her petition that when her plumber returned on September 7, 2011, he determined "that the water was coming from a broken pipe inside the foundation slab." She further stated that Shelter's adjuster "instructed [her] to have the plumber disconnect pipes from those within the foundation and re-route the plumbing without utilizing the pipes within the foundation." Ms. Mason asserted that after the plumber did so, Shelter refused to pay for the cost of re-routing the plumbing.

Ms. Mason alleged that her home sustained "extensive water damage to floors in the utility room, kitchen, dining room, and den, which included seepage into the walls." She stated that "[t]he damaged flooring in those rooms matched and were part of a flooring system that also ran continuously into the living room, hallway, front bathroom and closet." However, Ms. Mason asserted Shelter "has refused to pay for or reimburse the plaintiff for repairs to all such flooring[.]" Notably, the record reflects that, in some areas, three levels of linoleum flooring were atop the foundation. Testing determined that one of the levels of flooring contained asbestos. Ms. Mason alleged, however, that the insurer "refused to pay for or reimburse [her] for removal of the asbestos which would be required in order to install flooring to replace the damaged floors."

Ms. Mason asserted that, while Shelter provided certain sums, the payments "were paid in insufficient amounts, and as a result, the plaintiff has been unable to make repairs to her home, and is living in unsafe and inconvenient circumstances, causing problems with her health." Subject to sums paid by Shelter, Ms. Mason sought various costs, including those associated with: the re-routing of the plumbing; drying of the walls; abatement and removal of the flooring containing asbestos; replacement of flooring in the affected rooms; replacement of affected carpentry work; the disassembly, reassembly, and repair of a built-in entertainment center in order to dry the concrete beneath it, and "[s]uch other damages as will be shown at trial." In this latter claim, Ms. Mason sought recovery of costs associated with temporary relocation while the asbestos abatement was performed. Additionally, Ms. Mason contended that Shelter's adjustment of the claim and failure to make payment under the described circumstances warranted the imposition of penalties and attorney fees. See La.R.S. 22:1892 ; La.R.S. 22:1973.

Following a bench trial, the trial court found in favor of Ms. Mason and awarded damages as follows: $20,591.96 for net costs of repair ($27,140.00 in total damages subject to a credit for the $6,548.04 in prior payments); $2,000.00 for costs associated with the re-routing of the plumbing from the slab; $750.00 in "future additional living expenses for hotel costs incurred during the course of repairs related to this claim[.]" The trial court also awarded penalties in the amount of $10,000.00 and attorney fees in the amount of $10,000.00.

Thereafter, Ms. Mason filed a "Rule Nisi Pertaining to Litigation and Court Costs, Motion for Partial New Trial on Limited Issues of Quantum of Attorney Fees Pursuant to R.S. 22:1982(B) and Quantum of Penalties Pursuant to R.S. 22:1973(C), and Incorporated Memorandum." With regard to the motion for partial new trial, Ms. Mason sought an evidentiary hearing on the issue of penalties and attorney fees. The trial court denied the Rule in all respects.² Both parties appeal.

Prior to filing her brief, Ms. Mason filed a "Motion to Remand And Request to Suspend Briefing Delays." While the motion to suspend briefing deadlines was denied, the motion for remand was deferred to the panel on the merits of the appeal.

In its brief, Shelter asserts that the trial court erred in: 1) awarding the full amount of estimated work since the work had not been performed; 2) awarding costs for asbestos abatement; 3) awarding the cost of the plumbing work associated with re-routing the broken water pipe; 4) awarding an amount for additional living expenses as they were not actually incurred; 5) failing to apply the $1,000.00 policy deductible to the award of costs associated with the estimate; and in 6) finding it in violation of La.R.S. 22:1892 and La.R.S. 22:1973.

In her appeal, Ms. Mason argues the trial court erred in: 1) awarding "an unreasonably low amount" of attorney fees without providing her an opportunity to present evidence; 2) failing to award the highest penalty available under La.R.S. 22:1892 and 22:1973 ; and in 3) failing to tax litigation costs as expenses.

Discussion

Awarded Costs

Shelter's challenges the trial court's award of costs as estimated by Ms. Mason's expert in general construction, arguing the estimate provided by its chosen contracting company was more reliable and precise as to the costs of the particular items to be repaired. Additionally, Shelter contends the trial court erred in awarding the full amount of the estimated costs as Ms. Mason had not completed the repairs as, it argues, was required by her particular policy. We will first address the policy framework.

Completion of Work

The declaration sheet of Ms. Mason's policy indicates she paid an additional premium for "Expanded Restoration Cost Coverage." Referencing that coverage, Shelter argues that the trial court erred in awarding Ms. Mason full replacement cost, despite Ms. Mason not having completed the work. Shelter contends the policy instead anticipates that only "actual cash value" is paid in advance of work performed. The policy defines "actual cash value" as "total restoration cost less depreciation "³ and further defines "[t]otal restoration cost" as "the restoration cost of all of the damaged parts of the covered property that were damaged in one accident ." The policy's "Amendatory Endorsement—Louisiana" defines "restoration cost," in pertinent part, as follows:

44. Restoration cost means the amount of money it will, or did, cost to restore the form and function of the damaged part of covered property with property of equivalent construction, for an equivalent use, on the same premises by:

(a) replacing it ; or

(b) repairing it ,

whichever is less expensive.

Restoration cost can be based on a combination of (a) and (b) above, if some parts of the covered property are replaced and other parts are repaired . Restoration cost includes:

(a) the cost of labor using construction techniques commonly used by the building trades in the geographical area of the covered property; and

(b) the cost of parts and materials of like kind and like quality , to the extent those are available in the geographical area of the covered property;

Restoration cost does not include:

....

(h) general contractors' overhead and profit.

While depreciation is accounted for within the calculation of "actual cash value," Ms. Mason's coverage included "Expanded Restoration Cost Coverage," as was noted above. Shelter's adjuster acknowledged at trial that the expanded coverage provision was applied to Ms. Mason's claim and the provision anticipates the return of the depreciation cost for various items to the insured, as well as a "general contractors' overhead and profit."⁴ The adjuster testified Paragraph D for the flooring) and Paragraph E (for remaining items) were considered applicable to Ms. Mason's claim. Those provisions, as relevant herein, indicate:

(D) This provision applies to covered losses to the following items if they are permanently attached to the residence premises : ... (iii) floor surfaces[.]:

(1) When we agree with you as to the restoration cost of the damaged part of those items, we will, at our option, do one of the following:

(a) pay the actual cash value of the damaged part of the covered property;

(b) purchase replacement property of like kind and quality; or

(c) pay the limit of coverage stated in this policy as applicable to the item.

(2) No further payment will be made unless, within one year⁵ of the date of the loss:

(a) all the repairs and replacements necessary to restore the form and function of the damaged part of the covered property have actually been completed; and

(b) the total restoration cost is agreed upon by you and us.

We will then pay you :

(c) the difference between the amount we have already paid you and the restoration cost of that particular part, plus

(d) any reasonable and necessary charges you actually incurred for general

...