On October 25, 2024, the Louisiana Supreme Court issued its opinion in Martinez v. American Transport Group Risk Retention Group, Inc., 2023-01716, holding that an insurer is required to post a suspensive appeal bond covering only policy limits. The Louisiana Supreme Court further held that the insurer can suspensively appeal the judgment up to the policy limit and devolutively appeal the remainder of the judgment for its insured.

The underlying suit involved an accident between an 18-wheeler and a vehicle with four occupants, all of whom filed suit. The commercial vehicle was covered by an insurance policy with a $1,000,000 limit. Three of the Plaintiffs took the matter to trial, and the jury granted total damages of more than $2.8 million, plus judicial interest (over the policy limit).

The trial court in Martinez required the insurance company to post a suspensive appeal bond for the entire judgment amount of over $2.8 million plus interest although the policy limit was $1 million. While the Second Circuit denied the defendants’ writ, the Louisiana Supreme Court reviewed and reversed the ruling below. The Louisiana Association of Defense Council (“LADC”) filed an amicus brief with the Court, setting forth a nonimpairment-of-contract argument.

The Louisiana Supreme Court’s ruling used both the LADC’s nonimpairment-of-contract argument, as well as several decisions from other states, including California and New Jersey, as support for it’s suspensive/devolutive appeal solution.

In reaching this correct result, the Supreme Court has made clear that Insurance Companies need not post a bond higher than their policy limits in order to secure a suspensive appeal, thereby preventing further burdensome cost.