STATE OF LOUISIANA COURT OF APPEAL, THIRD CIRCUIT
05-1006
LEO KENNETH SONNIER AND GENEVA SONNIER
VERSUS
LOUISIANA FARM BUREAU MUTUAL INSURANCE CO., ET AL.
**********
APPEAL FROM THE THIRTY-FIRST JUDICIAL DISTRICT COURT PARISH OF JEFFERSON DAVIS, NO. C-36-04 HONORABLE WENDELL R. MILLER, DISTRICT JUDGE
OSWALD A. DECUIR JUDGE
Court composed of Oswald A. Decuir, Jimmie C. Peters, and Elizabeth A. Pickett, Judges.
REVERSED AND REMANDED.
Michael R. Garber Attorney at Law 1801 Ryan Street Lake Charles, LA 70601 (337) 494-5500 Counsel for Plaintiffs/Appellants: Leo Kenneth Sonnier Geneva Sonnier
Frank M. Walker Jr. Plauche, Smith & Nieset P. O. Box 1705 Lake Charles, LA 70602 (337) 436-0522 Counsel for Defendants/Appellees: Southern Farm Bureau Casualty Insurance Company Louisiana Farm Bureau Casualty Insurance Company Louisiana Farm Bureau Mutual Insurance Company Judy L. Burnthorn Ashley E. Gilbert Deutsch, Kerrigan & Stiles, L.L.P. 755 Magazine Street New Orleans, LA 70130 (504) 581-5141 Counsel for Defendant/Appellee: Herb Doucet DECUIR, Judge.
Plaintiffs appeal a judgment of the trial court dismissing their claims on
defendants’ motion for summary judgment alleging the issue was res judicata. For
the reasons that follow, we reverse.
FACTS
Kenneth and Geneva Sonnier purchased homeowners insurance from Louisiana
Farm Bureau Mutual Insurance Company. They requested replacement cost
coverage, but were informed by their agent, Herb Doucet, that replacement cost
coverage was not available in Cameron Parish. Each year at renewal, they again
requested replacement cost coverage and were told it was unavailable.
Subsequently, their home became infested with black mold. Ultimately, the
Sonniers settled with Farm Bureau for their policy limits of $68,000.00. The cost to
replace their home exceeds $200,000.00. At the time of settlement, the Sonniers were
informed that Farm Bureau did, in fact, offer replacement cost coverage.
Consequently, the Sonniers filed suit against Doucet and his errors and omissions
insurer for failure to inform them of the available coverage.
Defendants filed a motion for summary judgment alleging that the issue was
res judicata by virtue of the release signed by the Sonniers. The trial court agreed
and granted the motion for summary judgment. The Sonniers lodged this appeal.
RES JUDICATA
The Sonniers contend the trial court erred in finding their claim barred by res
judicata and granting defendants’ motion for summary judgment.
In Bailey v. Martin Brower Co., 94 1179, p. 3 (La.App. 1 Cir. 4/7/95), 658
So.2d 1299, 1301, the court succinctly summarized the application of res judicata to
releases as follows:
While the doctrine of res judicata is ordinarily premised on a final judgment, it also applies where there is a transaction or settlement of a disputed or compromised matter that has been entered into by the parties. A release of claim or claims, when given in exchange for consideration, is a compromise and constitutes the basis for a plea of res judicata. [Matthew v. Melton Truck Lines, Inc., 310 So.2d 691, 693 (La.App. 1st Cir.1975)]; Spencer v. Howard, Weil, Labouisse & Friedrichs, Inc., 543 So.2d 547, 550 (La.App. 4th Cir.), writ denied, 546 So.2d 1217 (La.1989); Thompson v. Bank of New Orleans and Trust Company, 422 So.2d 230, 231 (La.App. 4th Cir. 1982). However, the authority of the thing adjudged resulting from the release extends to only those matters the parties expressly intended to settle. Matthew v. Melton Truck Lines, Inc., 310 So.2d at 693.
The release at issue in this case provides that the Sonniers release Farm Bureau
and its agents, employees, etc. “from any and all liability under policy No. H0308223
on any and all claims, demands and rights of action arising out of, or which may
hereafter arise out of, an accident” that occurred at the Sonniers’ home on the
specified date.
Defendants argue that this release terminated all the Sonniers’ claims. The
Sonniers contend that the release covers only liability under the specific policy
contract. It is well settled that a general release will not bar recovery for those
aspects of a claim not intended to be covered by the release. La.Civ.Code art. 3073;
Henderson v. Stansbury, 372 So.2d 1253, 1254 (La.App. 3 Cir. 1979). Accordingly,
we must determine whether the Sonniers and Farm Bureau intended to include the
claim at issue in the release.
We first look to the terms of the release in order to ascertain the parties’ intent.
Three phrases in the release are critical to our evaluation. The first is “liability under
policy No. H0308223,” and the second is “on any and all,” and the third is “action
arising out of.” The trial court focused on the latter phrase in concluding that res
judicata applied. We find this focus to be misplaced. The clear language releases
Farm Bureau and its agents from liability “under” the policy. The second phrase
connects the first to the third and defines which claims are settled under the policy.
Had this phrase started with “and” rather than “on,” the trial court would be correct
and all liability under the policy and all liability arising out of the accident would
2 have been settled. This is not the case, and, as a result, the release applies only to
liability “under” the policy “on” claims arising out of the accident.
We find that the language of the release is clear and unambiguous, and,
therefore, we need not look elsewhere for the parties’ intent. Accordingly, we find
that the release covered only liability under the policy. The Sonniers’ claim against
Doucet arises out of the agent/broker relationship and is independent of the policy.
See Karam v. St. Paul Fire & Marine Ins. Co., 281 So.2d 728 (La.1973).
PEREMPTION
Doucet argues that even if the Sonniers’ claim is not res judicata, it is barred
by the peremptive period provided in La.R.S. 9:5606. We disagree.
Louisiana Revised Statutes 9:5606, Actions for professional insurance agent
liability, reads 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.
B. The provisions of this Section shall apply to all persons whether or not infirm or under disability of any kind and including minors and interdicts.
C. The peremptive period provided in Subsection A of this Section shall not apply in cases of fraud, as defined in Civil Code Article 1953.
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.
Louisiana Civil Code Article 3458 defines peremption as “a period of time
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STATE OF LOUISIANA COURT OF APPEAL, THIRD CIRCUIT
05-1006
LEO KENNETH SONNIER AND GENEVA SONNIER
VERSUS
LOUISIANA FARM BUREAU MUTUAL INSURANCE CO., ET AL.
**********
APPEAL FROM THE THIRTY-FIRST JUDICIAL DISTRICT COURT PARISH OF JEFFERSON DAVIS, NO. C-36-04 HONORABLE WENDELL R. MILLER, DISTRICT JUDGE
OSWALD A. DECUIR JUDGE
Court composed of Oswald A. Decuir, Jimmie C. Peters, and Elizabeth A. Pickett, Judges.
REVERSED AND REMANDED.
Michael R. Garber Attorney at Law 1801 Ryan Street Lake Charles, LA 70601 (337) 494-5500 Counsel for Plaintiffs/Appellants: Leo Kenneth Sonnier Geneva Sonnier
Frank M. Walker Jr. Plauche, Smith & Nieset P. O. Box 1705 Lake Charles, LA 70602 (337) 436-0522 Counsel for Defendants/Appellees: Southern Farm Bureau Casualty Insurance Company Louisiana Farm Bureau Casualty Insurance Company Louisiana Farm Bureau Mutual Insurance Company Judy L. Burnthorn Ashley E. Gilbert Deutsch, Kerrigan & Stiles, L.L.P. 755 Magazine Street New Orleans, LA 70130 (504) 581-5141 Counsel for Defendant/Appellee: Herb Doucet DECUIR, Judge.
Plaintiffs appeal a judgment of the trial court dismissing their claims on
defendants’ motion for summary judgment alleging the issue was res judicata. For
the reasons that follow, we reverse.
FACTS
Kenneth and Geneva Sonnier purchased homeowners insurance from Louisiana
Farm Bureau Mutual Insurance Company. They requested replacement cost
coverage, but were informed by their agent, Herb Doucet, that replacement cost
coverage was not available in Cameron Parish. Each year at renewal, they again
requested replacement cost coverage and were told it was unavailable.
Subsequently, their home became infested with black mold. Ultimately, the
Sonniers settled with Farm Bureau for their policy limits of $68,000.00. The cost to
replace their home exceeds $200,000.00. At the time of settlement, the Sonniers were
informed that Farm Bureau did, in fact, offer replacement cost coverage.
Consequently, the Sonniers filed suit against Doucet and his errors and omissions
insurer for failure to inform them of the available coverage.
Defendants filed a motion for summary judgment alleging that the issue was
res judicata by virtue of the release signed by the Sonniers. The trial court agreed
and granted the motion for summary judgment. The Sonniers lodged this appeal.
RES JUDICATA
The Sonniers contend the trial court erred in finding their claim barred by res
judicata and granting defendants’ motion for summary judgment.
In Bailey v. Martin Brower Co., 94 1179, p. 3 (La.App. 1 Cir. 4/7/95), 658
So.2d 1299, 1301, the court succinctly summarized the application of res judicata to
releases as follows:
While the doctrine of res judicata is ordinarily premised on a final judgment, it also applies where there is a transaction or settlement of a disputed or compromised matter that has been entered into by the parties. A release of claim or claims, when given in exchange for consideration, is a compromise and constitutes the basis for a plea of res judicata. [Matthew v. Melton Truck Lines, Inc., 310 So.2d 691, 693 (La.App. 1st Cir.1975)]; Spencer v. Howard, Weil, Labouisse & Friedrichs, Inc., 543 So.2d 547, 550 (La.App. 4th Cir.), writ denied, 546 So.2d 1217 (La.1989); Thompson v. Bank of New Orleans and Trust Company, 422 So.2d 230, 231 (La.App. 4th Cir. 1982). However, the authority of the thing adjudged resulting from the release extends to only those matters the parties expressly intended to settle. Matthew v. Melton Truck Lines, Inc., 310 So.2d at 693.
The release at issue in this case provides that the Sonniers release Farm Bureau
and its agents, employees, etc. “from any and all liability under policy No. H0308223
on any and all claims, demands and rights of action arising out of, or which may
hereafter arise out of, an accident” that occurred at the Sonniers’ home on the
specified date.
Defendants argue that this release terminated all the Sonniers’ claims. The
Sonniers contend that the release covers only liability under the specific policy
contract. It is well settled that a general release will not bar recovery for those
aspects of a claim not intended to be covered by the release. La.Civ.Code art. 3073;
Henderson v. Stansbury, 372 So.2d 1253, 1254 (La.App. 3 Cir. 1979). Accordingly,
we must determine whether the Sonniers and Farm Bureau intended to include the
claim at issue in the release.
We first look to the terms of the release in order to ascertain the parties’ intent.
Three phrases in the release are critical to our evaluation. The first is “liability under
policy No. H0308223,” and the second is “on any and all,” and the third is “action
arising out of.” The trial court focused on the latter phrase in concluding that res
judicata applied. We find this focus to be misplaced. The clear language releases
Farm Bureau and its agents from liability “under” the policy. The second phrase
connects the first to the third and defines which claims are settled under the policy.
Had this phrase started with “and” rather than “on,” the trial court would be correct
and all liability under the policy and all liability arising out of the accident would
2 have been settled. This is not the case, and, as a result, the release applies only to
liability “under” the policy “on” claims arising out of the accident.
We find that the language of the release is clear and unambiguous, and,
therefore, we need not look elsewhere for the parties’ intent. Accordingly, we find
that the release covered only liability under the policy. The Sonniers’ claim against
Doucet arises out of the agent/broker relationship and is independent of the policy.
See Karam v. St. Paul Fire & Marine Ins. Co., 281 So.2d 728 (La.1973).
PEREMPTION
Doucet argues that even if the Sonniers’ claim is not res judicata, it is barred
by the peremptive period provided in La.R.S. 9:5606. We disagree.
Louisiana Revised Statutes 9:5606, Actions for professional insurance agent
liability, reads 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.
B. The provisions of this Section shall apply to all persons whether or not infirm or under disability of any kind and including minors and interdicts.
C. The peremptive period provided in Subsection A of this Section shall not apply in cases of fraud, as defined in Civil Code Article 1953.
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.
Louisiana Civil Code Article 3458 defines peremption as “a period of time
fixed by law for the existence of a right.” Further, under that article, “[u]nless timely
3 exercised, the right is extinguished upon the expiration of the peremptive period.”
“Peremption may not be renounced, interrupted, or suspended.” La.Civ.Code art.
3461.
Doucet contends that his failure to notify the Sonniers of the availability of
coverage occurred in 1998 and is, therefore, perempted. The Sonniers’ petition,
however, indicates that they were not notified that coverage was available until
January of 2003. The last time the policy was renewed was 2002, and, therefore, in
2002, they allege Doucet’s misrepresentation deprived them of the coverage they
desired. The Sonniers filed suit on January 2, 2004.
Doucet argues that even if that is the case, a continuing tort does not defeat
peremption. The Sonniers contend that it is not a continuing tort but instead each
time they sought replacement coverage at renewal and were denied is a separate act.
We agree. The insurance contract is subject to renewal or cancellation each year.
Therefore, the alleged misrepresentations each year by Doucet impacted the Sonniers’
decision whether to reenter the contractual relationship and constituted a separate act.
In order to defeat Doucet’s claim of peremption, the Sonniers must have filed
suit within one year of finding out about the availability of the coverage in January
of 2003 and within three years of Doucet’s last failure to notify them of the coverage
in 2002. The Sonniers’ January 2, 2004 filing falls within both periods. Accordingly,
we find that the Sonniers’ claim regarding the failure to notify them of the availability
of replacement cost coverage is not perempted. We refer the issue of peremption of
the remaining claims to the merits.
DECREE
For the foregoing reasons, the judgment of the trial court is reversed and the
case remanded for further proceedings. All costs of these proceedings are taxed to
Appellees.