A penalties statute "must be strictly construed", as discussed in Saturday's and yesterday's posts. Under that rule, a penalties statute imposing duties on an "insurer" does not apply to Nestle USA, Inc. The case is Bazile v. Nestle USA, Inc., ___ So. 2d ___, 2006 WL 2773806 (La. Ct. App., 3d Cir., Case No. 06-223, Opinion Filed Sept. 27, 2006)(subscription required), or use Louisiana Third Circuit Court of Appeals public site access.
Nestle is a candy bar manufacturer. The concurring opinion in Bazile also informs us that Nestle is self-insured. If alleged bad acts are needed for Bad Faith, the allegations against Nestle in that case seemed to supply them: Nestle was accused of manufacturing a candy bar that had worms in it.
Regardless, all judges in this case agree that Nestle is not an "insurer" under the Louisiana Good Faith Duty Statute, La. Rev. Stat. 22:1220. This is true even though Nestle failed to pay a settlement within 30 days after the agreement is reduced to writing, which the Louisiana statute penalizes.
But the Louisiana statute only penalizes an "insurer" which violates certain Good Faith duties imposed by the statute. One Good Faith duty involves paying a settlement within a time certain after there is a written settlement agreement, and that time certain is, as noted, 30 days. As the Chief Judge wrote in an opinion which the other judges all joined: "No insurance companies were involved in the suit." Therefore the Louisana Good Faith Duty Statute does not apply to a case of Nestle.
REMINDER: THE CONTENTS OF THIS BLOG DO NOT MAKE AN ATTORNEY-CLIENT RELATIONSHIP. ALWAYS CONSULT THE CASES AND LAWS OF EACH PARTICULAR JURISDICTION AND AN ATTORNEY IN AND FAMILIAR WITH THE PARTICULAR JURISDICTION AND ITS LAWS, WHENEVER YOU TRY TO ADDRESS OR RESOLVE ANY LEGAL QUESTION.
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