SOUTHERN MARBLE SPECIALTIES INC v. MITCHELL WAYNE COLLEY INDIVIDUALLY THE FIRM OF LOUISIANA PROPERTY CASUALTY LLC AND ABC INSURANCE COMPANY (2023)

I respectfully disagree with the majority's conclusion that the peremptive period began to run on the date that Southern Marble signed or received the 2017-2018 policy, after it found that the 2019-2020 policy was a “renewal” policy; however, I concur in the conclusion that Southern Marble's claims against Defendants are perempted and should be dismissed.

Southern Marble's claims arise out of the following duty owed by an insurance agent:

an insurance agent owes a duty of “reasonable diligence” to his customer. This duty of “reasonable diligence” is fulfilled when the agent procures the insurance requested. Jurisprudence has suggested that an insured has a valid claim against the agent when the insured demonstrates that: “1) the insurance agent agreed to procure the insurance; 2) the agent failed to use ‘reasonable diligence’ in attempting to procure the insurance and failed to notify the client promptly that the agent did not obtain insurance and 3) the agent acted in such a way that the client could assume he was insured.”

Isidore Newman School v. J. Everett Eaves, Inc., 09-2161, p. 7 (La. 7/6/10), 42 So.3d 352, 356-57.

Specifically, Southern Marble's claims involve Defendants’ alleged negligence in procuring deficient BI/EE coverage in connection with the 2019-2020 policy that was in effect when Southern Marble made an insurance claim for damages sustained during Hurricane Laura.

In accordance with La.R.S. 9:5606, the peremptive period applicable to Southern Marble's claims begins to run “from the date of the alleged act, omission, or neglect” or “from the date that the alleged act, omission, or neglect is discovered or should have been discovered. Whether or not the 2019-2020 policy meets the statutory definition of a “renewal” under La.R.S. 22:1267, is not necessarily determinative of when the peremptive period began to run; rather, the focus should be on when the alleged negligent action occurred or when it was, or should have been, discovered.

Here, it was undisputed that Southern Marble's insurance policies did not automatically renew every year. Rather, both Southern Marble and Defendants had to take action annually to obtain a policy. Southern Marble was required to submit requested information to the Defendants and complete an application, and Defendants facilitated submission of that information to the insurer. Southern Marble's claims arise out of deficient BI/EE coverage for damages sustained during Hurricane Laura and, therefore, are based only on Defendants’ alleged negligence in procuring the 2019-2020 policy. While the 2017-2018 policy provided the same insurance coverage limits as the 2019-2020 policy, Defendants’ claims are not based on Defendants’ actions in procuring the 2017-2018 policy.

However, it is undisputed that Southern Marble received via email a copy of the 2019-2020 policy at issue on or around December 19, 2019. An insured has an obligation to read the policy when it is received, and an insured is deemed to have knowledge of any deficient coverage upon the receipt of the policy. See McKernan v. ABC Insurance Co., 21-859 (La. 11/23/21), 328 So.3d 69, and Seruntine v. State Farm Fire & Casualty Co., 10-1108 (La. 9/3/10), 42 So.3d 968. An insured does not need to suffer a loss before the peremptive period for actions against insurers for negligence in procuring coverage begins to run. Theriot v. Dwight W. Andrus Ins., Inc., 21-431 (La.App. 3 Cir. 12/15/21), 332 So.3d 224. While the Theriot court ultimately concluded that the peremptive period did not begin to run on the date the insured received the policy, but rather, on the date of loss, the underlying facts are distinguishable. Theriot involved the agent's failure to take additional agreed-upon steps to secure additional coverage after the interim step of renewing the existing policy; however, the instant case does not involve a plan to take various steps over time to obtain additional coverage.

In my opinion, the peremptive period in this case began to run no later than December 19, 2019, as that is the date that Southern Marble should have known of any deficient coverage procured by Defendants that forms the basis of its claims. However, the action was not filed until August 18, 2021, which is more than one year from the date that Southern Marble received the policy. Therefore, Southern Marble's claims are perempted in accordance with La.R.S. 9:5606 and should be dismissed.

Despite this conclusion, however, it is also my opinion that Defendants’ actions in knowingly obtaining BI/EE coverage that was significantly insufficient to meet Southern Marble's needs or expectations, without specifically informing Southern Marble or explaining to it the reduced coverage procured, are reprehensible and not excused by the result of this litigation.

SAVOIE, J. concurs and assigns written reasons.