SARAH S. VANCE, District Judge.
Defendant Hub International Midwest, Limited ("Hub") moves for summary judgment.
This suit stems from previous state court litigation. On September 6, 2006, Lawrence and Emma Brock sued A3M Vacuum Services, L.L.C. ("A3M") for damages arising out of a car accident (the "Brock litigation").
At the time of the car accident, A3M carried both liability and excess liability insurance. Robert Zetzmann, a Hub employee, was A3M's insurance agent.
The record indicates that Hub was aware of the Brock litigation as early as September 7, 2006, when it wrote to Clarendon's general agent for information regarding A3M's defense counsel.
On March 16, 2009, after trial in the Brock litigation but before the court had issued judgment, the Brocks made a settlement offer to A3M in the amount of $1,000,000.
On September 4, 2009, the state court entered judgment against A3M, awarding the Brocks $1,236,419.70 in damages.
On April 29, 2010, A3M brought this suit against Hub. It alleges that Hub failed to notify Ace of the Brock litigation as soon as practicable.
Hub now moves for summary judgment. It argues that A3M's claim is barred by peremption. See La. R.S. 9:5606.
Summary judgment is warranted when "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir.1994). When assessing whether a dispute as to any material fact exists, the Court considers "all of the evidence in the record but refrains from making credibility determinations or weighing the evidence." Delta & Pine Land Co. v. Nationwide Agribusiness Ins. Co., 530 F.3d 395, 398-399 (5th Cir.2008). The Court must draw reasonable inferences in favor of the nonmoving party, but "unsupported allegations or affidavits setting forth ultimate or conclusory facts and conclusions of law are insufficient to either support or defeat a motion for summary judgment." Galindo v. Precision Am. Corp., 754 F.2d 1212, 1216 (5th Cir.1985) (quotation marks removed).
If the dispositive issue is one on which the moving party will bear the burden of proof at trial, the moving party "must come forward with evidence that would entitle it to a directed verdict if the evidence went uncontroverted at trial." Int'l Shortstop, Inc. v. Rally's, Inc., 939 F.2d 1257, 1264-65 (5th Cir.1991) (quotation marks removed). The nonmoving party
If the dispositive issue is one on which the nonmoving party will bear the burden of proof at trial, the moving party may satisfy its burden by merely pointing out that the evidence in the record is insufficient with respect to an essential element of the nonmoving party's claim. See Celotex, 477 U.S. at 325, 106 S.Ct. 2548. The burden then shifts to the nonmoving party, who must, by submitting or referring to evidence, set out specific facts showing that a genuine issue exists. See id. at 324, 106 S.Ct. 2548.
The nonmovant may not rest upon the pleadings but must identify specific facts that establish a genuine issue for trial. Id.; see also Little, 37 F.3d at 1075 ("Rule 56 `mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.'") (quoting Celotex, 477 U.S. at 322, 106 S.Ct. 2548).
Louisiana Revised Statutes 9:5606(A) ("§ 9:5606") provides:
The statute declares that these "one-year and three-year periods ... are peremptive periods ... [and] may not be renounced, interrupted, or suspended." La. R.S. 9:5606(D).
"Peremption has been likened to prescription; namely, it is prescription that is not subject to interruption or suspension." Rando v. Anco Insulations Inc., 16 So.3d 1065, 1082 (La.2009). "Ordinarily, the exceptor bears the burden of proof at the trial of the peremptory exception." Id. "Peremptive statutes are strictly construed against peremption and in favor of the claim." Id. at 1083.
Hub contends that A3M's claim against it is perempted.
A3M, Clarendon and Illinois Union raise two general arguments in opposition to Hub's motion for summary judgment. First, they argue that the peremptive period provided in § 9:5606 is inapplicable, because the responsibility to notify Ace of the Brock litigation fell to Hub employees who were not licensed insurance agents, and thus A3M's claim is not an action against an "insurance agent, broker, solicitor, or other similar licensee" under the meaning of the statute.
"According to [§ 9:5606], the three-year peremptive period commences on the date of the alleged act, omission, or neglect." State ex rel. Div. of Admin., Office of Risk Mgmt. v. Nat'l Union Fire Ins. Co. of La., 984 So.2d 91, 94 (La.Ct.App.2008). "[I]n order to calculate the three year peremptive period, we must determine the date on which the alleged act, omission or neglect ... took place." Graham v. Conque, 626 So.2d 870, 873 (La.Ct.App.1993). "What constitutes the triggering act or omission will differ according to the individual facts." Oddo v. Am. Heritage Life Ins. Co., No. 13-6141, 2013 WL 6797112, at *4 n. 1 (E.D.La. Dec. 23, 2013).
Here, A3M alleges that Hub failed to notify Ace timely of the Brock litigation. It is not evident on what date this alleged omission took place for purposes of running the peremptive period, since it essentially recurred every day over an extended period of time. In addressing this question, the Court finds the case of Graham v. Conque instructive. 626 So.2d 870.
In Graham, the plaintiff widow sued her former attorney for failure timely to join certain parties in a wrongful death suit arising out of her husband's accidental death. Id. at 873. The Louisiana Court of Appeal applied the peremption statute applicable to legal malpractice claims. Id. at 872 (citing La. R.S. 9:5605). Like § 9:5606, that statute provides for a three-year peremptive period to run "from the date of the alleged act, omission, or neglect." Id. (quoting La. R.S. 9:5605). The Court of Appeal found that the "latest date on which [the relevant parties] could have timely been made defendants in Graham's wrongful death suit was September 23, 1986 (one year from the date of the accident)." Id. at 873. Accordingly, it held that "the three year peremptive period ran from September 23, 1986, the last possible date of omission, through September 23, 1989." Id. (emphasis added).
Like Graham, this case involves an omission or failure to act on a timely basis: A3M sues Hub for failure timely to notify Ace of the Brock litigation. The harm
Because Hub bears the burden of proof on the question of peremption, see Rando, 16 So.3d at 1082, its failure to establish as a matter of fact "the last date on which the harm could have been avoided," Lifemark Hospitals, 1997 WL 33473806, at *4, is fatal to its motion for summary judgment. The flaw in Hub's argument that the relevant date necessarily fell before April 29, 2007 is further demonstrated by Louisiana law on late notice. In order to establish a late notice defense under Louisiana law, an insurer must show actual prejudice. American Safety & Risk Servs., Inc. v. Legion Indem. Co., 153 F.Supp.2d 869, 878 (E.D.La. 2001). Even "notice first received after trial and after the judgment has become executory" is not "untimely as a matter of law." Fakouri v. Ins. Co. of N. Am., 378 So.2d 1083, 1086 (La.Ct.App.1979) ("[T]he rule has developed in this state that an insurer must prove actual prejudice in order to be able to deny a claim on the basis of not receiving notification as stipulated in the policy contract."). The Brock litigation did not go to trial until January 2009, and A3M did not refuse the Brocks' $1,000,000 settlement offer until March 20, 2009.
Hub argues that the peremptive period commenced, at the latest, on October 20, 2006, the last of the three dates on which it allegedly received written notice of a possible excess judgment. It argues that to run the peremptive period from a later date would violate the rule that continuing torts may not suspend peremptive periods.
The Court finds that this case does not involve a continuing tort. Under the Louisiana continuing torts doctrine, "[w]hen the tortious conduct and resulting damages continue, prescription does not begin until the conduct causing the damage is abated." S. Cent. Bell Tel. Co. v. Texaco, Inc., 418 So.2d 531, 533 (La.1982) (emphasis added). The Louisiana Supreme
Here, by contrast, Hub's failure to notify Ace of the Brock litigation did not cause continuing, accumulating damages. Rather, it caused damages, if any, only on "the last date on which the harm could have been avoided." Lifemark Hospitals, 1997 WL 33473806, at *4. Thus, to the extent that Hub had a duty to notify Ace timely of the Brock litigation, its alleged damagecausing omission did not take place on the date or dates on which it received notice of a possible excess judgment but rather on "the last possible date of omission." Graham, 626 So.2d at 873. For the reasons stated above, Hub has failed to establish that this date fell before April 29, 2007. Accordingly, it has failed to establish that A3M's claim is perempted.
Finally, the Court is not persuaded by Hub's citation to State ex rel. Division of Administration, Office of Risk Management v. National Union Fire Insurance Company of Louisiana, 984 So.2d 91 (La. Ct.App.2008) ("Office of Risk Management"). Although the factual circumstances of that case are similar to those present here, the Louisiana Court of Appeal did not there have occasion to address the specific question raised in this matter. In Office of Risk Management, the State of Louisiana sued its insurance broker for failure to notify its excess liability carrier of pending litigation. Id. at 92-93. The State based its claim on two letters it sent to the broker regarding the litigation. Id. at 93. The first letter was sent more than three years before the State sued the broker, but the second letter was sent less than three years before the State sued the broker, i.e., within the three-year peremptive period. Id. at 94-95. The State argued that its claim was not perempted, because the broker's failure to take action upon receipt of the second letter constituted a separate and distinct tort from which a new peremptive period ran. Id. The Court of Appeal held that the broker's failure to take action upon receipt of the second letter constituted a separate and distinct act, and that it might have constituted a separate and distinct tort, as the State argued, if it gave rise to "immediately apparent damages." Id. at 96-97.
Hub cites to Office of Risk Management, because the case suggests that, in the context of a claim against a broker for failure to notify an excess insurer, the peremptive period might run from the dates on which the broker received notice of the possible excess claim. The case is distinguishable, however, because the dispute between the parties in Office of Risk Management was whether the peremptive period ran from the date of the first letter notifying the broker of the litigation or the date of the second letter notifying the broker of the litigation. Id. at 94-95. The State, apparently, did not argue that the peremptive period might run from the last
The Court finds that Graham v. Conque, discussed supra, is more closely analogous to the present case. As in Graham, the Court finds that the date of the alleged omission is the last date on which harm could have been avoided. See Graham, 626 So.2d at 873. Because Hub has failed to establish that this date fell before April 29, 2007, it has not satisfied its burden on summary judgment.
For the foregoing reasons, the Court DENIES Hub's motion for summary judgment.
