August 13, 2008
Fifth Circuit Applies Louisiana Statutory Directives in Case of First Impression
In Bernhard Mechanical Contractors, Inc. v. St. Paul Companies, 2008 WL 3244145 (5th Cir. Aug. 8 2008), the court gave a first impression interpretation of La. Rev. Stat. 9:5606, which is essentially a statute of limitations for claims against insurance agents, known as a "peremption" period under Louisiana law. Specifically, it stated that any action against "any insurance agent, broker, solicitor, or other similar licensee" had to be filed within a year; the claim against the insurer was filed more than a year after the agent's wrongful action.
The court held that the statute did not apply to claims against the insurer for whom the agent worked, even though liability was imputed to the insurance company under agency law. In reaching its conclusion, the court relied on Lousiana Civil Code Article 9, which requires courts to apply the language of the statute if clear (which raises a question about Erie -- is statutory interpretation a procedural, or substantive issue, an issue discussed elswhere in this blog), but nonetheless also applied case law holding that peremption statutes should be construed against finding a claim barred. Applying these principles, the court held that "other licensee" clearly did not include insurers, because of ejusdem generis and also because other Louisiana statutes made clear distinctions between insurers and their agents.
What's surprising to me is that, despite the fact that this is a case of first impression, and the court reversed a grant of summary judgment to the insurer, it held that the decision was non-precedential.
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