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JASON MYERS v. HOUSTON SPECIALTY INSURANCE COMPANY, ET AL.
AMBER IDLEMAN F/B/O AND/OR O/B/O KAIDEN COLE JACKSON v. DENISE JONES, USA INSURANCE CO., HOUSTON SPECIALTY INS. CO., AND DONALD BUSH
THOMAS BUSH, JR. v. USA INSURANCE COMPANY, DENISE D. JONES, DONALD R. BUSH, HOUSTON SPECIALTY INSURANCE COMPANY, ANDREA HELO, AND AJ GALLAGHER RISK MANAGEMENT SERVICES, INC.
DONALD BUSH v. DENISE JONES AND USA INSURANCE COMPANY
Plaintiff-appellant appeals from a trial court judgment sustaining the exception raising the objection of peremption 1 and dismissing his claims. For the reasons that follow, we affirm.
FACTS AND PROCEDURAL HISTORY
These consolidated actions arise out of an accident that occurred on April 11, 2019, on Louisiana Highway 24 in Terrebonne Parish. Thomas Bush, Jr., plaintiff-appellant herein (appellant), was a passenger in a Ford F350 that collided with a 2014 Nissan Maxima, driven by Denise Jones. The Ford F350 was owned by Business Interior Logistics and Technicians, LLC (BILT) and operated by appellant's brother, Donald Bush. Appellant and Donald Bush owned BILT.
On May 15, 2020, appellant filed a petition for damages, naming multiple defendants and stating two separate causes of action. First, alleging negligence on the part of both drivers involved in the accident, appellant brought a personal injury claim against Ms. Jones; USA Insurance Company, in its capacity as Ms. Jones liability insurer; Donald Bush; and Houston Specialty Insurance Company (HSIC), as the liability insurer of the Ford F350 owned by BILT and operated by Donald Bush.
Second, and giving rise to the instant appeal, appellant brought a broker negligence action against Arthur J. Gallagher Risk Management Services, Inc. (Gallagher), BILT's insurance broker, and Gallagher's employee, Andrea Helo. Appellant alleged that, despite being instructed to do so, Ms. Helo failed to apply for and procure uninsured/underinsured motorist (UM/UIM) coverage 2 in the amount of $1,000,000.00 on BILT's commercial lines liability policy, which was issued by HSIC. Appellant later amended his lawsuit to add as a defendant Jacob Crawford, the purported agent in charge of Ms. Helo, and to allege that Ms. Helo also failed to place UM/UIM coverage as directed in the amount of $1,000,000.00 on BILT's commercial excess liability policy, issued by Evanston Insurance Company.
In response, Ms. Helo, Mr. Crawford, and Gallagher (collectively, “the Gallagher defendants”) filed several exceptions raising multiple objections, including the exception of peremption at issue herein. The Gallagher defendants argued appellant's negligence claim against them was perempted pursuant to LSA-R.S. 9:5606, which sets forth a one-year peremptive period for actions against insurance agents and brokers, beginning on the day the plaintiff discovered or should have discovered the alleged negligence. The Gallagher defendants maintained that they delivered the HSIC and Evanston policies to BILT as attachments to a September 13, 2018 email, which was addressed to both appellant and Linda Stephenson, BILT's office manager and appellant's mother. Said email was submitted as an exhibit in support of their exception. The Gallagher defendants argued BILT discovered or should have discovered the alleged negligence when the policies were delivered via the September 13, 2018 email, and therefore, appellant had one year from the date of delivery, or until September 13, 2019, to file suit, such that appellant's May 15, 2020 suit was perempted. The Gallagher defendants also submitted an August 20, 2018 email, sent by Ms. Stephenson to the Gallagher defendants, which they maintained established that the UM/UIM insurance secured in connection with the HSIC and Evanston policies complied with UM/UIM selection forms. The Gallagher defendants submitted the UM/UIM forms, which appellant had signed, together with the email.
Appellant opposed the Gallagher defendants' exception of peremption, arguing that the September 13, 2018 email was insufficient to prove delivery of the policies. Appellant offered his own affidavit, as well as the affidavit of Ms. Stephenson, both of whom attested that “in the year 2018 [affiant] did not receive any emails attaching any insurance policies from [the Gallagher defendants]” and that there were multiple occasions in 2018 when the Gallagher defendants “[had] trouble sending emails to [affiant].” Appellant also maintained that further discovery was required in order to properly assess the validity of the Gallagher defendants' exception of peremption.
Subsequently, the Gallagher defendants responded to written discovery propounded by appellant and agreed to the depositions of Ms. Helo and Gallagher, subject to the LSA-C.C.P. art. 1442 limitations regarding the deposition of an organization. However, appellant was dissatisfied with the Gallagher defendants' discovery responses and the proposed scope of the depositions. Thus, appellant filed two motions to compel, one seeking to compel further written discovery responses, and the other seeking to compel the Gallagher defendants' depositions without the LSA-C.C.P. art. 1442 limitations.
The Gallagher defendants' exception of peremption was reset several times before it came for hearing on December 10, 2021. Appellant's motions to compel were also set for hearing that day, as well as a motion for summary judgment filed by the Gallagher defendants seeking dismissal of appellant's claims.
During the December 10, 2021 hearing of the exception of peremption, motions to compel, and summary judgment motion, the trial court asked which matter the parties wished to take up first. The Gallagher defendants requested that the exception of peremption be taken up first. Appellant did not object. Following the hearing of the Gallagher defendants' exception raising the objection of peremption, the trial court sustained the objection of peremption and dismissed all claims against the Gallagher defendants with prejudice. The trial court indicated the remaining matters were therefore moot, and appellant agreed. On December 21, 2021, the trial court executed a written judgment in conformity with its oral ruling. This appeal of the December 21, 2021 judgment followed.3
LAW AND DISCUSSION
Peremption is a period of time fixed by law for the existence of a right. The right is extinguished upon the expiration of the peremptive period. LSA-C.C. art. 3458. When the peremptive period has run, the cause of action itself is extinguished unless timely exercised. Quatrevingt v. State through Landry, 2017-0884 (La.App. 1 Cir. 2/8/18), 242 So.3d 625, 631-32, writ denied, 2018-0391 (La. 4/27/18), 239 So.3d 837. Peremption may not be renounced, interrupted, or suspended, except as otherwise provided by law. LSA-C.C. art. 3461.
The objection of peremption is properly raised by a peremptory exception.4 See LSA-C.C.P. art. 927; Nixon v. Nixon, 2020-0694 (La.App. 1 Cir. 12/30/20), 319 So.3d 315, 318. While the exceptor ordinarily bears the burden of proof at the trial of the peremptory exception, if peremption is evident on the face of the pleadings, the burden shifts to the plaintiff to show the action is not perempted. Bank v. Rayford, 2017-1244 (La.App. 1 Cir. 3/29/18), 247 So.3d 733, 736. Here, the Gallagher defendants were the exceptors, and appellant's claims were not perempted on the face of his petition. Thus, the Gallagher defendants initially bore the burden of proving facts to support their exception of peremption. See Bank, 247 So.3d at 737.
When evidence is introduced at the hearing on the peremptory exception of peremption, the trial court's findings of fact are reviewed under the manifest error-clearly wrong standard of review. Lomont v. Bennett, 2014-2483 (La. 6/30/15), 172 So.3d 620, 627, cert denied sub.nom Myer-Bennett v. Lamont, 577 U.S. 1139, 136 S.Ct. 1167, 194 L.Ed.2d 178. In this matter, the transcript reflects that both parties introduced evidence at the December 10, 2021 hearing of the Gallagher defendants' exception of peremption. Thus, the manifest error standard of review applies, and we may not reverse the trial court's findings of fact unless a reasonable factual basis for the finding of the trial court does not exist in the record, and the finding is clearly wrong. Sanders v. Petrin, L.L.C., 2019-1625 (La.App. 1 Cir. 7/24/20), 309 So.3d 388, 390. Further, if the factual findings are reasonable in light of the record reviewed in its entirety, we may not reverse even though convinced that, had we been sitting as the trier of fact, we would have weighed the evidence differently. Gaines v. Lemoine, 2019-0551 (La.App. 1 Cir. 2/21/20), 297 So.3d 775, 778.
Pursuant to LSA-R.S. 9:5606(A), the applicable peremptive period within which to file suit against an insurance agent or broker is one year from the date of the alleged act, omission, or neglect, or within one year from the date that the alleged act, omission, or neglect is discovered or should have been discovered; in all events, such actions must be filed at the latest within three years from the date of the alleged act, omission, or neglect. LSA-R.S. 9:5606.5 The alleged broker negligence in this matter was the Gallagher defendants' purported failure to secure UM/UIM insurance on the HSIC and Evanston policies as directed by BILT. Thus, the determinative issue regarding the Gallagher defendants' exception of peremption was the date on which appellant discovered, or should have discovered, that the HSIC policy was issued with $100,000.00 of UM/UIM coverage and the Evanston policy was issued with no UM/UIM insurance.
As set forth above, the Gallagher defendants maintained that they delivered the HSIC and Evanston policies to BUT via a September 13, 2018 email addressed to appellant and Ms. Stephenson, triggering the one-year peremptive period under LSA-R.S. 9:5606. In opposition to the Gallagher defendants' exception of peremption, and on appeal, appellant has argued that the peremptive period never began to run because BILT did not receive the policies in question as required by LSA-R.S. 22:873(A). Appellant asserts that the trial court erred in granting the Gallagher defendants' exception of peremption because appellant established, by way of his own affidavit and the affidavit of Ms. Stephenson, that BILT did not receive the policies in question or the corresponding UM/UIM rejection forms. We disagree.
Louisiana Revised Statutes 22:873(A) provides that every insurance policy “shall be delivered to the insured or to the person entitled thereto within a reasonable period of time after its issuance.” The law requires that an insured be informed of a policy's contents, and when an insurer fails to comply with the statutory requirement of delivery, it cannot rely on its policy exclusions. Naquin v. Fortson, 1999-2984 (La.App. 1 Cir. 12/22/00), 774 So.2d 1277, 1279. However, it is legally presumed that, upon mailing of the policy by the insurance company to the insured, the insured did, in fact, receive the documents. Whitehead v. Curole, 2018-1178 (La.App. 1 Cir. 5/9/19), 277 So.3d 409, 414. Further, LSA-R.S. 22:873(A) explicitly authorizes delivery “by the United States Postal Service, personal delivery, private courier, or by electronic transaction in accordance with the Louisiana Uniform Electronic Transactions Act, R.S. 9:2601[ et seq.] [UET Act]”. Accordingly, mailing, whether by U.S. mail or any other statutorily authorized means of delivery, triggers the legal presumption of receipt by the insured.
Contained within the UET Act is LSA-R.S. 9:2615, which provides default rules regarding when an electronic record is sent and when an electronic record is received. See LSA-R.S. 9:2615-Comments-2001-comment (a). Regarding when an electronic record is sent, LSA-R.S. 9:2615(A) requires that information be properly addressed or otherwise directed to the recipient, i.e., there must be specific information that will direct the record to the intended recipient. The record is considered sent once it leaves the control of the sender, or comes under the control of the recipient. Because records sent through e-mail or the Internet will pass through many different server systems, the critical element in those instances is the loss of control by the sender. See L5A-R.S. 9:2615-Comments-2001-comment (b). With respect to receipt, LSA-R.S. 9:2615(B) provides simply that when a record enters the system which the recipient has designated or uses and to which the recipient has access, in a form capable of being processed by that system, it is received. See LSA-R.S. 9:2615-Comments-2001-comment (c). However, receipt is not dependent on a person having notice that the record is in the person's system; rather, receipt occurs when the record reaches the designated system whether or not the recipient ever retrieves the record. See LSA-R.S. 9:2615-Comments-2001-comment (e).
It is well settled that it is the insured's obligation to read the policy when received, and the insured is deemed to know the policy contents. Seruntine v. State Farm Fire & Casualty Co., 2010-1108 (La. 9/3/10), 42 So.3d 968 (per curiam). Consequently, the Louisiana Supreme Court has consistently held that an insured “knew or should have known'' of deficient coverage upon receipt of copies of insurance policies or renewals of insurance policies, because a simple review of the policy would reveal the policy limits and exclusions. See McKernan v. ABC Insurance Co., 2021-00859 (La. 11/23/21), 328 So.3d 69, 70 (per curiam), and Seruntine, 42 So.3d 968.
In this matter, the Gallagher defendants initially attached a printed copy of the September 13, 2018 email in support of their exception of peremption. In opposition to the exception of peremption, appellant argued that the email was insufficient to establish delivery of the policies on that date, because the email did not reflect the recipient's email address, did not reflect the last name of the alleged addressee, did not prove that the contents of the attachments to the email were the HSIC and Evanston policies, and did not prove actual delivery of the policies. Appellant further contended that BILT did not receive copies of the policies in question at any time during the year 2018, and that there were several occasions in 2018 when he and Ms. Stephenson did not receive emails sent by the Gallagher defendants due to issues at the Gallagher defendants' office.
Contradicting appellant's arguments, the Gallagher defendants offered into evidence a flash drive, identified as Exhibit C(1), during the December 10, 2021 peremption hearing. The hearing transcript indicates that the trial court and the parties viewed the contents of Exhibit C(1) during the hearing, and that the trial court accepted the contents as proof that the Gallagher defendants delivered the policies to BILT via the September 13, 2018 emails to appellant and Ms. Stephenson.6 Our review of Exhibit C(1) is consistent with the trial court's finding.
Exhibit C(1) contains a Microsoft Outlook file of the September 13, 2018 email. The text of the September 13, 2018 email states, in pertinent part, “Attached are your copies of the 2018-19 Renewal Package and Umbrella policies. Each policy has been issued per your instructions.” The email was sent from Ms. Helo, email address Andrea_Helo@ajg.com, to appellant, one of BILT's owners, email address email@example.com, and to BILT's office manager Linda Stephenson, email address firstname.lastname@example.org. Thus, the September 13, 2018 email was properly addressed to the recipient, and was considered sent once it left Ms. Helo's control, in accordance with the UET Act. See LSA-R.S. 9:2615-Comments-2001-comment (b).
Further examination of Exhibit C(1) reveals that two PDF files were attached to the email. The first, titled “BILT UMB.pdf,” was a copy of a commercial excess liability insurance policy issued by Evanston Insurance Company to “Business Interior Logistics and Technicians, LLC dba B.I.L.T.” The Evanston excess policy contains an exclusion that explicitly stated:
Auto No-Fault and Similar Laws
This policy does not apply to:
Any liability payable under or resulting from any no-fault, personal injury protection, uninsured motorists, underinsured motorists or similar law or statute.”
The second PDF file attached to the September 13, 2018 email, titled “PKG.pdf,” was a copy of the commercial lines insurance policy issued by HSIC to “Business Interior Logistics and Technicians, LLC DBA B.I.L.T.” The HSIC commercial lines policy reflects liability insurance in the amount of $1,000,000.00 and uninsured motorists - bodily injury insurance in the amount of $100,000,00.7 Collectively, these attachments to the September 13, 2018 email clearly reflect the UM/UIM policy limits of the HSIC policy and the UM/UIM exclusion in the Evanston policy. Therefore, upon receipt of the email, appellant should have discovered the policy limits and exclusions, and should have recognized whether the policy limits and exclusions were consistent with BILTs purported directions regarding same. In short, appellant knew or should have known of the alleged negligence upon receipt of the policies.
While the Gallagher defendants initially bore the burden of proof as the exceptors, having thoroughly reviewed the record before us, particularly Exhibit C(1), it is clear that the Gallagher defendants offered evidence in support of their contention that the HSIC and Evanston policies were delivered to BILT via the September 13, 2018 email. Further, said email was properly addressed to a BILT owner and BILTs office manager and was sent by electronic transaction in accordance with the UET Act. Thus, the Gallagher defendants' email triggered the presumption that BILT received the policies. Admittedly, appellant sought to contradict the presumption of receipt with his affidavit and the affidavit of Ms. Stephenson, both of which disavowed receipt of the September 13, 2018 email. However, in light of the record viewed in its entirety, we cannot say that the trial court lacked a reasonable basis for its factual finding that the policies were delivered on September 13, 2018. See Sanders, 309 So.3d at 390. Nor can we say that the trial court erred in finding that appellant failed to overcome the presumption of receipt based only on appellant's self-serving affidavits. Id. Accordingly, the trial court did not manifestly err in sustaining the Gallagher defendants' exception raising the objection of peremption and dismissing appellant's claims against them. These arguments lack merit.
The Motions to Compel
Appellant also argues that the trial court erred in granting the exception of peremption before allowing appellant to conduct adequate discovery, particularly discovery regarding whether the Gallagher defendants followed their standard procedures regarding delivery of policies, and without first ruling on appellant's two pending motions to compel. The party seeking an order to compel discovery has the burden of proving that the discovery sought is relevant to the subject matter involved in the pending action. Testa Distributing Co., Inc. v. Tarver, 584 So.2d 300, 307 (La.App. 1 Cir. 1991). In addition, it is well settled that trial courts in Louisiana have broad discretion when regulating pretrial discovery, which discretion will not be disturbed on appeal absent a clear showing of abuse. Daniels v. USAgencies Cas. Ins. Co., 2011-1357 (La.App. 1 Cir. 5/3/12), 92 So.3d 1049, 1054.
Appellant contends that this Court's opinion in Whitehead, 277 So.3d 409, supports his claim that the Gallagher defendants' standard procedures, and whether those procedures were followed, are relevant to the exception of peremption. However, as the Gallagher defendants correctly point out, the exception of peremption in this case concerned “the discrete issue of when the policies were delivered.” Having already determined that the emails contained on Exhibit C(1) provided a reasonable basis for the trial court's finding that the Gallagher defendants established delivery of the policies on September 13, 2018, it is clear that any information revealed through further discovery would be of no use to appellant.8 Thus, we agree with the trial court that the ruling sustaining the exception raising the objection of peremption rendered moot appellant's motion to compel. See Safeco Insurance Co. v. Norcold, Inc., 2012-0755 (La.App. 1 Cir. 2/25/13), 113 So.3d 1104, 1109. Further, as noted above, appellant was given the opportunity at the December 10, 2021 hearing to request that his motions to compel be heard prior to the exception of peremption, and he did not do so. Nor did he object when the Gallagher defendants requested that the exception of peremption be considered first. Accordingly, the trial court did not abuse its broad discretion in denying appellant further discovery before ruling on the Gallagher defendants' exception of peremption.
For the foregoing reasons, the December 21, 2021 judgment of the trial court sustaining the exception raising the objection of peremption in favor of Arthur J. Gallagher Risk Management Services, Inc., Andrea Helo, and Jacob Crawford, and dismissing the claims of Thomas Bush, Jr., is affirmed. Costs of this appeal are assessed to Thomas Bush, Jr.
While discovery issues should be decided prior to ruling on the merits of the exception, it does not appear from the record that the appellant objected to the trial court taking up the exceptions while discovery issues were still pending.
I disagree with the majority opinion and think the judgment granting the exception of peremption should be reversed. I do not think the Gallagher defendants carried their burden of proving the factual basis for their exception of peremption. Specifically, I do not think the evidence that the Gallagher defendants emailed the subject policies to BILT employees on September 13, 2018 proves that BILT “received” the policies, within the meaning of La. R.S. 9:2615(B) of the Louisiana Uniform Electronic Transaction Act - especially in light of the contrary affidavits submitted by the plaintiff.
1. We note at the outset that while the Gallagher defendants' exception, memorandum, arguments, and brief were styled as addressing an exception of prescription, the plain language of the governing statute, LSA-R.S. 9:5606(D), states that the time periods set forth therein are peremptive. However, peremption is a form of prescription. Southern Ins. Co. v. Metal Depot, 2010-1899 (La.App. 1 Cir. 6/10/11), 70 So.3d 922, 925, writ denied, 2011-1763 (La. 10/14/11), 74 So.3d 215. Moreover, the caption or title of a pleading does not control. Rather, courts are obligated to look through the caption of pleadings in order to ascertain their substance and to construe every pleading so as to do substantial justice. LSA-C.C.P. art. 865; see Armstrong v. ARCCO Company Services, Inc., 2021-0131 (La.App. 1 Cir. 10/18/21), 331 So.3d 939, 945. Based on the substance of the pleadings, it is plain that the issue before us is one of peremption, not prescription, and we refer to it as such.We also note that Louisiana Code of Civil Procedure article 922 recognizes only three exceptions: the declinatory exception, the dilatory exception, and the peremptory exception. While a peremptory exception pleading the objection of peremption is at issue, see LSA-C.C.P. art. 927, for brevity, we refer to the exception as an exception of peremption.
2. The object of UM/UIM coverage is to provide full recovery for automobile accident victims who suffer damage caused by a tortfeasor who is not covered by liability insurance or who has inadequate liability coverage. See Duncan v. U.S.A.A. Ins. Co., 2006-363 (La. 11/29/06), 950 So.2d 544, 547.
3. The Gallagher defendants filed a motion seeking to use the records in two companion appeals, 2022-CA-0480 and 2022-CA-0482, in the instant appeal. We granted the Gallagher defendants' motion in an unpublished action dated October 7, 2022.Also, on December 20, 2022, we issued an interim order remanding this appeal for the limited purpose of having the trial court issue an amended judgment naming the parties in whose favor relief was awarded, as required by LSA-C.C.P. art. 1918(A). The record on appeal was subsequently supplemented with an amended judgment in accordance with the interim order.
4. Peremption has been likened to the objection of prescription, and the rules governing the burden of proof as to prescription also apply to peremption. See LSA-C.C. art. 3459; Nixon, 319 So.3d at 318.
5. Louisiana Revised Statutes 9:5606 provides, in pertinent part, as follows:A. No action for damages against any insurance agent, broker, solicitor, or other similar licensee under this state, whether based upon tort, or breach of contract, or otherwise, arising out of an engagement to provide insurance services shall be brought unless filed in a court of competent jurisdiction and proper venue within one year from the date of the alleged act, omission, or neglect, or within one year from the date that the alleged act, omission, or neglect is discovered or should have been discovered. However, even as to actions filed within one year from the date of such discovery, in all events such actions shall be filed at the latest within three years from the date of the alleged act, omission, or neglect.* * * *D. The one-year and three-year periods of limitation provided in Subsection A of this Section are peremptive periods within the meaning of Civil Code Article 3458 and, in accordance with Civil Code Article 3461, may not be renounced, interrupted, or suspended.
6. Specifically, the following exchange occurred:[Gallagher defendants' counsel]: So the law, we feel, is pretty clear with Revised Statute[s] 22:873. Ms. Helo certainly - - We have proof in evidence that not only she sent it but they received [it] now in the evidence.[The trial court]: And for those reasons, I'm going to grant the exception of [peremption].
7. We note that Exhibit C(1) also contains the August 20, 2018 email sent from Ms. Stephenson, email address email@example.com, to Ms. Helo, email address Andrea_Helo@ajg.com. The attached PDF file was the UM/UIM motorist bodily injury coverage form, which was signed by appellant, dated August 12, 2018, and reflected appellant's selection of UM/UIM insurance in the amount of $100,000.00 on the HSIC policy.
8. Although the Whitehead court noted affidavit testimony that the insurer “followed its standard procedures of mailing the policy, declaration page, and endorsements to the insured,” the court's determination that the insurer established delivery did not hinge on the insurer's standard procedures. Rather, the Whitehead court found that the insurer “established delivery through [an employee's] affidavit that the policy was mailed, relying on documents kept in the ordinary course of business, including ․ the letter showing that the declaration page and the policy were mailed.” Whitehead, 277 So.3d at 414.
Greene, J. dissents and assigns reasons. Holdridge, J. concurs with reasons.
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Docket No: 2022 CA 0773
Decided: April 14, 2023
Court: Court of Appeal of Louisiana, First Circuit.
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