
    Robert TATUM, Plaintiff-Appellant, v. COLONIAL LLOYDS INSURANCE COMPANY, Defendant-Appellee.
    No. 97-38.
    Court of Appeal of Louisiana, Third Circuit.
    Oct. 29, 1997.
    Writ Denied Feb. 6, 1998.
    Charles Wilson Seaman, Natchitoches, for Robert Tatum.
    William Preston Crews, Jr., Natchitoches, for Colonial Lloyds Insurance Company.
    Before COOKS, SAUNDERS, WOODARD, DECUIR and AMY, JJ.
   hAMY, Judge.

The plaintiff, Robert Tatum, appeals the trial court’s grant of the defendant’s exception of jurisdiction. The trial court found that the plaintiff could not bring a La.R.S. 22:1220 claim in a Louisiana court where the underlying claim, a tort action, could not have been brought within this state but, instead, only in Texas, the situs of the accident. We affirm.

DISCUSSION OF THE RECORD

This appeal arose from a suit brought under the provisions of La.R.S. 22:1220 in which the plaintiff, Robert Tatum, sought damages and penalties from the defendant, Colonial Lloyds Insurance Company, for late payment of a settlement. The original factual basis for the suit was an accident which occurred in Texas. The record reveals that the plaintiff is a Louisiana resident who was injured in a fall while at the Texas home of an insured of the defendant. The plaintiff and the defendant entered into settlement negotiations after the plaintiff returned to Louisiana. Toward |2that purpose, the defendant contacted Huey T. Littleton Claims Service, Inc. of Shreveport, Louisiana to adjust the claim. According to the plaintiff’s petition, the parties reached a settlement on June 25,1996.

However, the plaintiffs filed a petition on August 5, 1996 alleging that the defendants did not pay the settlement within thirty days and that, pursuant to La.R.S. 22:1220, the plaintiff is due damages and penalties for this failure to pay.

In response to the petition, the defendants filed an Exception of Jurisdiction on September 3,1996. In the exception, the defendants alleged that the accident giving rise to the plaintiffs cause of action occurred in Texas and that the insurance policy issued by the defendant was entered into in Texas.

The trial court granted the exception finding that the court lacked jurisdiction over the underlying matter and, therefore, lacked jurisdiction on the issue of penalties for failing to pay the settlement. The plaintiff now appeals and assigns the granting of the exception as error.

LAW

The plaintiff recognizes that Louisiana courts would have no jurisdiction over any injury suit resulting from the accident because it occurred in Texas. However, the plaintiff maintains that the instant suit does not have its basis in the Texas accident, but is, instead, a separate and distinct claim arising from the negotiation, settlement, and subsequent late payment by the defendant. The plaintiff argues that the defendant negotiated and signed the settlement in Louisiana with a Louisiana attorney and adjuster. Further, the plaintiff states, in brief, that when the defendant 13“chose to enter into the settlement, they subjected themselves to the provisions of LSA — R.S. 22:1220_”

La.R.S. 22:1220 provides remedies for an insurer’s failure to deal in good faith. The statute provides, in pertinent part:

A. An insurer, including but not limited to a foreign line and surplus line insurer, owes to his insured a duty of good faith and fair dealing. The insurer has an affirmative duty to adjust claims fairly and promptly and to make a reasonable effort to settle claims with the insured or the claimant, or both. Any insurer who breaches these duties shall be liable for any damages sustained as a result of the breach.
B. Any one of the following acts, if knowingly committed or performed by an insurer, constitutes a breach of the insurer’s duties imposed in Subsection A:
' (2) Failing to pay a settlement within thirty days after an agreement is reduced to writing.

In Clausen v. Fidelity and Deposit Co. of Maryland, 95-0504 (La.App. 1 Cir. 8/4/95); 660 So.2d 83, writ denied, 95-2489 (La.1/12/96); 666 So.2d 320, the first circuit found that a La.R.S. 22:1220 action cannot stand alone, but is in fact dependant on an underlying cause of action-. In that case, the court found that the underlying cause of action had prescribed and, therefore, the plaintiff could not maintain an La.R.S. art. 22:1220 action. The court stated:

Regarding recovery under La.R.S. 22:658 and 22:1220, we conclude that a plaintiff attempting to base her theory of recovery against an insurer on these statutes must first have a valid, underlying, substantive claim upon which insurance coverage is based. The penalties authorized by these statutes do not stand alone; they do not provide a cause of action against an insurer absent a valid, underlying, insurance claim. This conclusion reflects the general principle that statutes allowing for the imposition of penalties must be strictly construed.

'\iId. at p. 3-4; 660 So.2d at 85-86 (footnote and citations omitted).

In granting the exception, the trial judge noted that a Louisiana court would have no jurisdiction over any suit resulting from the accident. The trial judge wrote, in the reasons for ruling, that:

It is clear as to the underlying claim of Mr. Tatum for his injuries, he could not bring a direct action against Colonial Lloyds Insurance Company pursuant to R.S. 22:655, because the accident or injury did not occur in this State nor was the policy written or delivered in this State.

As for the plaintiffs argument that the instant matter is a separate and distinct claim, the trial judge applied the rationale of Clau-sen and stated:

Using this rationale, the issue here is whether this court has jurisdiction on the underlying cause of action, being the initial accident in Texas. As already stated above, this court does not have jurisdiction over that underlying cause. Based on the rationale in Clausen then, since the penalties provided by 22:1220 do not stand alone and do not provide a cause of action independent of the underlying claim, this court does not have jurisdiction over the defendant in this matter based solely on 22:1220.

Like the trial court, we too find the rationale of Clausen persuasive. In the instant case, the injury occurred in Texas. Additionally, the insured was a Texas resident and the insurance policy was delivered in Texas. Therefore, any action arising from that accident should have properly been brought in a Texas court. No Louisiana court could have heard such a suit. We recognize that the settlement negotiations took place exclusively in Louisiana. However, these negotiations cannot be separated from and are derivative of the accident which occurred in Texas.

Accordingly, we conclude that since La. R.S. 22:1220 provides for damages and penalties within the Louisiana Insurance Code, an underlying cause of action giving rise to the possibility of such damages and penalties must be maintainable under the ] slaw of this state to which that Code is applicable. This is not so in the present case. Therefore, we find no merit in the assignment of error.

DECREE

For the foregoing reasons, the decision of the lower court is affirmed and all costs of this appeal are assessed to the plaintiff, Robert Tatum.

AFFIRMED.

COOKS, J., dissents.

SAUNDERS, J., dissents and assigns written reasons.

11 SAUNDERS, Judge,

dissenting.

I feel that the trial court misapplied the principles set forth in Clausen, 660 So.2d 83, to the case sub judice and would reverse based upon the distinguishing features of each case.

In Clausen, the owner of inherited savings certificates filed suit against the issuing bank’s insurer, alleging that although the funds were deposited at the bank, claimant never received the funds. The defendant bank’s records reflected that three checks representing the amount of the savings certificates were issued and mailed to claimant some 17 years earlier.

Referring to the language quoted in Clausen, 660 So.2d 83, the trial court required that in order to bring an action under La. R.S. 22:1220, a plaintiff “must first have a valid, underlying, substantive claim upon which insurance coverage is based.” Id. at 85. There is no doubt that the plaintiff in this case does, in fact, have a “valid, underlying, substantive claim.” The Texas accident took place on April 6, 1996; liability on the part of the insured was never contested; and plaintiff brought this action before his underlying claim had prescribed. Even though this underlying claim could not have been brought in Louisiana due to lack of jurisdiction, nowhere does yjClausen state that lack of jurisdiction over the valid underlying claim is grounds for denial of the La.R.S. 22:1220 claim.

Furthermore, although the Clausen court stated that “the penalties authorized by these statutes do not stand alone;” the trial court followed this statement with the phrase “they do not provide a cause of action against an insurer absent a valid, underlying, insurance claim.” Id. at 85. In my opinion, this language clearly implies that as long as there is a valid underlying claim, an action may be brought independently under La.R.S. 22:1220. I do not interpret this language to hold that a La.R.S. 22:1220 action cannot be brought without also bringing the valid underlying claim at the same time.

Another distinguishing factor between Clausen and the case at bar is the fact that in Clausen, the underlying claim, the claim for the funds contained in the savings certificates, is precisely what gave rise to the cause of action. However, in the ease before us, the cause of action arises out of the breach of a separate contractual obligation, which is the failure of the defendant to timely pay a settlement taking place in the state of Louisiana.

Next, I distinguish between the relief which was afforded the defendant in both Clausen and the case before us. Clausen never addressed the issue of jurisdiction. Instead, the court merely barred recovery since the plaintiff failed to state a cause of action due to the fact that her underlying claim had prescribed. Here, the trial court improperly expanded this rule to decline jurisdiction over an action which actually does have a valid underlying claim.

Furthermore, I find that the facts before us clearly establish that jurisdiction in Louisiana over the non-resident defendant is appropriate when the defendant’s contacts with the foreign state are “such that the maintenance of the suit does notjjoffend traditional notions of fair play and substantial justice.” Salley v. Colonial Marine Industries, Inc., 95-2215 (La.App. 4 Cir. 9/11/96); 680 So.2d 1242, 1248, citing International Shoe Company v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945). Salley further quotes:

It is generally held that those nonresidents who enter into interstate contracts with a forum state’s citizens subject themselves to the specific jurisdiction of that state in a suit arising from the contractual obligation. deReyes, 586 So.2d at 106; Bordelon, Hamlin, Theriot & Hardy v. Burlington Broadcasting, Ltd., 94-1839, p. 5 (La.App. 4th Cir. 3/16/95), 652 So.2d 1082, 1085, citing Burger King Corp. v. Rudzewicz, 471 U.S. 462, 473, 105 S.Ct. 2174, 2182, 85 L.Ed.2d 528 (1985); see also Fine v. Rubin, 617 So.2d 86 (La.App. 4th Cir.1993). If the defendant is thus found to have “purposefully established such minimum contacts with the forum state, a presumption arises that jurisdiction is reasonable and the burden of proof and persuasion shifts to the defendant” to show the factors of the fairness analysis weigh against the exercise of jurisdiction. deReyes, 586 So.2d at 106-07; Burlington Broadcasting, 94-1839 at pp. 5-6, 652 So.2d at 1085.

Salley, 680 So.2d at 1249.

These well established and deeply rooted jurisprudential standards regarding jurisdiction are clearly met in the case before us. By entering into the settlement agreement in the State of Louisiana, the defendant established the necessary “minimum contacts” for the purpose of invoking jurisdiction. Further, the defendant has failed to show that it would be unfairly prejudiced by the exercise of jurisdiction. I would not allow the above jurisprudential standards to be negated by expanding the rule in Clausen to include the present circumstances. I respectfully dissent.  