Roadhouse Bar-B-Que, Inc. v. Certain Underwriters at Lloyds, London

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

04-1697

ROADHOUSE BAR-B-QUE, INC.

VERSUS

CERTAIN UNDERWRITERS AT LLOYDS, LONDON, ET AL.

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APPEAL FROM THE
TWENTY-EIGHTH JUDICIAL DISTRICT COURT
PARISH OF LASALLE, NO. 32,548
HONORABLE JOHN PHILIP MAUFFRAY, JR., DISTRICT JUDGE

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J. DAVID PAINTER
JUDGE

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Court composed of Michael G. Sullivan, Billy Howard Ezell, and J. David Painter,
Judges.

AFFIRMED.

Kevin L. Cole
James A. Prather
Three Sanctuary Blvd., Suite 301
Mandeville, LA 70471
(985) 674–6680
Counsel for Defendant/Appellee:
Certain Underwriters at Lloyds, London, Burns & Wilcox of La., Inc., and
Cunningham Lindsey U.S., Inc.

William H. Parker III
James Huey Gibson
Allen & Gooch
P. O. Drawer 3768
Lafayette, LA 70502-3768
(337) 291-1270
Counsel for Defendant/Appellee:
Alexander & Bolton, Inc.

Keith Wayne Manuel
Attorney At Law
115 East Ogden Street
Marksville, LA 71351
(318) 253-5126
Counsel for Plaintiff/Appellant:
Roadhouse Bar-B-Que, Inc.

PAINTER, J.

Following a fire on its premises, Roadhouse Bar-B-Que, Inc. (“Roadhouse), the

insured restaurant, brought suit against Alexander & Bolton, Inc. (“Alexander &

Bolton”), the insurance agent who placed the subject coverage, Certain Underwriters

at Lloyd’s, London (“Lloyd’s”), the insurance company, Cunningham Lindsey, U.S.,

Inc. (“Cunningham Lindsey”), the insurance adjuster, and Burns & Wilcox of La.,

Inc. (“Burns & Wilcox”), the insurance broker. The trial court dismissed Alexander

& Bolton, Inc. on an exception of peremption and further dismissed all claims of the

Plaintiff against the other Defendants based on the Plaintiff’s failure to amend its

petition as previously ordered by the trial court. For the reasons that follow, we

affirm the rulings of the trial court.

FACTUAL AND PROCEDURAL BACKGROUND

On September 10, 1999, Pat Beck, the president of Roadhouse, purchased lots

fifteen (15) and sixteen (16) of Block F of the Tremont Addition to the Town of

Tullos, physically located at the intersection of Highways 165 and 84, with all

improvements and appurtenances, from Benjamin H. Givens. This property had been

used by its previous owners to operate a restaurant and bar. Beck leased this property

to Roadhouse with Kathlyn Hunt, the secretary/treasurer of Roadhouse, signing as

lessee, for the purposes of operating a restaurant and bar.

On October 4, 1999, Beck requested an insurance quote from Nanette Harms of

Alexander & Bolton. Apparently, Alexander & Bolton had placed insurance on the

subject property for the previous owners with limits on the value of the building at

$140,000.00 and limits on the contents at $40,000.00. Beck was advised of the prior

coverage and was provided with a quote from Burns & Wilcox of $2,850.75 on a new

policy keeping the limits for the value of the building at $140,000.00 but raising the

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contents limit to $100,000.00, per Beck’s request. On October 7, 1999, Beck

requested that the insurance be put into effect on the subject premises. A policy

bearing number CPS338111 was issued by Scotsdale Insurance Company and mailed

to Roadhouse with a letter from Harms outlining the following coverage under the

policy:

a. $140,000.00 on the building
b. $100,000.00 on the contents
c. $300,000.00 General Aggregate Liability Limits
d. $300,000.00 Products & Completed Operations Aggregate
e. $300,000.00 Personal & Advertising
f. $300,000.00 each occurrence
g. $ 10,000.00 food spoilage

No objection or other communication was made by Beck.

On September 21, 2000, Harms sent Beck another letter concerning the renewal

of the policy which indicated the premium and asked Beck to sign a form indicating

his intent to continue the coverage. On November 9, 2000, a policy bearing number

169845 issued by Lloyd’s was mailed to Beck along with a third cover letter from

Harms again outlining the above-listed coverage. This policy had the same coverage

as the Scotsdale policy. Again, Beck made no objection or other communication to

Harms or Alexander & Bolton concerning the coverage.

Then, on January 21, 2001, a fire occurred at Roadhouse. Hunt notified

Alexander & Bolton of the fire the next day. On January 23, 2001, Jamie Vanderlick

of Cunningham Lindsey U.S., Inc. (“Cunningham Lindsey”) inspected the premises

and determined that the only building damaged was the one housing the restaurant/bar

and that the damage did not exceed $140,000.00.

On June 19, 2001, Lloyd’s paid $53,547.63 to Givens, the additional

insured/mortgagee, for the loss sustained in the fire. That same day, Beck signed a

Receipt, Release, Hold Harmless Agreement and Acknowledgment of Assignment of

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Mortgage releasing Lloyds, Burns & Wilcox, Cunningham Lindsey, and other parties

and all of their respective employees, agents, brokers, adjusters and attorneys from

any and all liability and/or obligation whatsoever up to the amount of $53,547.63 and

recognizing that said sum was being paid in full and complete satisfaction of all

claims under the Building Coverage of Certificate No. 169845, up to $53,547.63.

On August 15, 2001, Beck, Hunt, and two others were indicted by a Grand Jury

for simple arson and conspiracy to commit simple arson with respect to the fire that

occurred on January 21, 2001 at the Roadhouse premises.

On January 15, 2002, Roadhouse filed suit against Alexander & Bolton, Lloyd’s,

Burns & Wilcox, and Cunningham Lindsey. Plaintiff alleged that Alexander &

Bolton and Burns & Wilcox failed to place adequate coverage, that Cunningham

Lindsey failed to properly adjust the claim, and that Lloyd’s failed to pay all

replacement costs of damages under the policy. Since the filing of the suit, the

Defendants have filed numerous exceptions resulting in numerous amendments to the

petition and one previous appeal to this court.1 At issue in the current appeal are the

peremptory exception and motion for summary judgment filed on behalf of Alexander

& Bolton and the motions to dismiss with prejudice filed on behalf of Lloyd’s, Burns

& Wilcox, and Cunningham Lindsey. Following a hearing on these matters, the trial

court rendered judgments sustaining the peremptory exception on behalf of Alexander

& Bolton and granting the motions to dismiss with prejudice on behalf of the other

Defendants. Plaintiff appealed and asserted the following assignments of error:

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Roadhouse previously appealed the trial court’s August 13, 2003 judgment granting
Defendants’ exceptions of no cause and no right of action and res judicata and giving Plaintiff ten
days to cure the defects. In an unpublished opinion, Roadhouse Bar-B-Que, Inc. v. Certain
Underwriters at Lloyds, 03-1779 (La.App. 3 Cir. 2/11/04), 866 So.2d 420, this court dismissed the
Plaintiff’s appeal based on the fact that the judgment complained of therein was a non-appealable,
interlocutory order.

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1. The Honorable Trial Court Judge erred in releasing Alexander & Bolton,
Inc., Burns & Wilcox of La., Inc., and Cunningham Lindsey U.S., Inc.
on exceptions of no cause of action.

2. The Honorable Trial Court Judge erred in finding that res judicata
applied to the partial settlement issued by Lloyd’s, London, and thus
granting the peremptory exception of res judicata.

3. The Honorable Trial Court Judge erred in granting the peremptory
exception of peremption, finding that the peremptive period provided in
La.R.S. 9:5606 commenced on the date of origination of the insurance
policy. La.R.S. 9:5606, in essence, deals with the peremptive period for
filing claims against agents.

For the reasons that follow, we affirm the rulings of the trial court.

DISCUSSION

1. Plaintiff’s Claims Against Alexander & Bolton, Inc.

At the outset, we note that the Plaintiff asserts two assignments of error as to

Alexander & Bolton. The first alleges that the trial court erred in releasing Alexander

& Bolton on an exception of no cause of action. The second asserts that the trial

court erred in finding that the peremptive period commenced on the date of the

origination of the insurance policy and in granting the exception of peremption in

favor of Alexander & Bolton. We agree with Alexander & Bolton in its assertion that

it was not dismissed on an exception of no cause of action and, therefore, we will not

consider this assignment of error with respect to Alexander & Bolton2 and consider

only the assignment of error with regard to the peremptive period.

The applicable peremptive period is found in La.R.S. 9:5606, which 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

2
Alexander & Bolton did file exceptions of no cause of action but ultimately filed an answer
on August 28, 2003.

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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.

(Emphasis added.)

This Court enunciated the standard of review in an appeal on a peremptory

exception in Parker v. Buteau, 99-519, p. 3 (La.App. 3 Cir. 10/13/99), 746 So.2d 127,

129: “When evidence is introduced and evaluated at the trial of a peremptory

exception, an appellate court must review the entire record to determine whether the

trial court was manifestly erroneous with its factual conclusions.” Then, in Egle v.

Egle, 01-927, p. 4 (La.App. 3 Cir. 2/6/02), 817 So.2d 136, 139, we noted that “[t]he

trial court is not bound to accept as true the plaintiff's allegations in the petition at

such a trial” on a peremptory exception. Moreover, in Dauterive Contractors, Inc.

v. Landry & Watkins, 01-1112, p. 16 (La.App. 3 Cir. 3/13/02), 811 So.2d 1242, 1253,

we recognized that “[t]hough different in their operation, the relatedness of the two

theories justifies application of prescription's burden-shifting principles enunciated

in the jurisprudence to peremption.” Thus, “when the plaintiff’s petition is perempted

on its face, the burden shifts to the plaintiff to show why the claim has not

perempted.” Id.

Pursuant to La.Civ.Code art. 3461, a peremptive period cannot be renounced,

interrupted, or suspended. The relevant statute, La.R.S. 9:5606, also specifically

states that the one and three year periods provided for therein are peremptive and

cannot be renounced, interrupted, or suspended. La.R.S. 9:5606 contains the same

language as La.R.S. 9:5605 (the statute dealing with actions for legal malpractice)

with respect to when the peremptive period begins to run; i.e., “one year from the date

that the alleged act, omission, or neglect is discovered or should have been

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discovered.” In Campo v. Correa, 01-2707, pp. 11-12 (La. 6/21/02), 828 So.2d 502,

510-511 (citations omitted), the Louisiana Supreme Court said:

Prescription commences when a plaintiff obtains actual or constructive
knowledge of facts indicating to a reasonable person that he or she is the
victim of a tort. A prescriptive period will begin to run even if the injured
party does not have actual knowledge of facts that would entitle him to bring
a suit as long as there is constructive knowledge of same. Constructive
knowledge is whatever notice is enough to excite attention and put the
injured party on guard and call for inquiry. Such notice is tantamount to
knowledge or notice of everything to which a reasonable inquiry may lead.
Such information or knowledge as ought to reasonably put the alleged victim
on inquiry is sufficient to start running of prescription.

The Plaintiff’s allegation against Alexander & Bolton is that it did not obtain the

coverage that the Plaintiff expected to have and that, consequently, Plaintiff suffered

losses that were not covered. Plaintiff concedes that the peremptive period for this

claim is one year from the date of discovery of the alleged deficiency. However,

Plaintiff argues that the trial court erred in ruling that the peremptive period ran from

the date of origination of the policy. Plaintiff asserts that the peremptive period

should begin on the date of discovery of the alleged defect in the policy; i.e., the date

that the claim was not paid to its satisfaction. Plaintiff alleges that it has no legal

responsibility to read or examine the policy at length. We disagree.

The salient issue is when Roadhouse knew or should have known that the policy

did not provide the coverage it wanted. In support of its exception, Alexander &

Bolton submitted the affidavits of Nannette Harms, who dealt with Beck in his

purchase of insurance, and of Jamie Vanderlick, the property appraiser from

Cunningham Lindsey who adjusted the damages from the fire. Plaintiff attempted to

introduce the affidavit of Beck; however, it was not admitted into evidence since it

was untimely. Plaintiff did not raise the failure to admit this affidavit into evidence

as error and, thus, we will not consider it.

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We agree with Alexander & Bolton in its assertion that Plaintiff had knowledge

of the alleged negligent breach of contract more than one year before this suit was

filed on January 16, 2002. This policy was renewed not once, but twice; each time

with a letter from Harms outlining the coverage contained in the policy as indicated

above. Neither of these letters prompted any response or other communication from

Beck or Roadhouse.

Plaintiff contends that it had no reasonable way of knowing that the policy was

insufficient until the claim was filed and not paid and that it had no responsibility to

read the policy. Harms’ affidavit, which was not controverted by Plaintiff,

established that Beck requested a quote on the replacement cost using the same limits

as previously provided on the building ($140,000.00) but with an increase on the

contents limit from $40,000.00 to $100,000.00. Further, Plaintiff relies on Louisiana

Home Builders Ass’n Self-Insurers’ Fund v. Adjustco, Inc., 633 So.2d 630 (La.App.

1 Cir. 1993), writ denied, 94-234 (La. 3/18/94), 634 So.2d 857, for the proposition

that it had no duty to read or examine the policy at length. That decision, by its own

wording, is limited to the facts of that case. There, the plaintiff had been told by the

defendant not to worry about the minimum loss fund and, therefore, had no reason to

be concerned about an unfunded gap in coverage. Such is not the case here. Beck

requested a quote on a specified amount of coverage and the same was provided to

him. He purchased the coverage and then renewed the coverage. Accordingly, if the

policy was not as Beck intended, he was put on notice of this fact through the

correspondence received from Harms and thereby had constructive knowledge that

the coverage was not as he intended long before the fire occurred.

The trial court found that as of the date the policy was first transmitted to Beck

on November 5, 1999 and as of the date that the renewal policy was transmitted to

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Beck on November 9, 2000, Plaintiff knew of the existence of facts which would

have enabled it to state a cause of action against the insurance agent for negligent

failure to procure the desired coverage. As in Dauterive, 811 So.2d 1241, we find

that it is unnecessary to say exactly which of these dates is controlling, as it is enough

to say that the alleged negligence was “reasonably discoverable” sometime between

November 5, 1999 and November 9, 2000. Thus, suit filed on January 16, 2002 was

untimely, as it occurred more than one year after Plaintiff knew or should have known

that the policy was not what it allegedly wanted, even if the alleged negligence was

not discovered until the latest date of November 9, 2000. We do not believe that the

findings of the trial court in this regard are manifestly erroneous and therefore affirm

the dismissal of Alexander & Bolton on the ground of peremption.

2. Plaintiff’s Claims Against Certain Underwriters at Lloyd’s, London,
Cunningham Lindsey U.S., Inc., and Burns & Wilcox of La., Inc.

The remaining Defendants contend that Plaintiff fails to adequately brief the issue

of the dismissal of Lloyd’s, Cunningham Lindsey, and Burns & Wilcox and instead

attempts to argue the merits of the case as to the propriety of the trial court’s granting

of the prior exceptions of no cause of action and res judicata. These Defendants

assert that this is not what is properly on appeal, as it is not the basis of the October

6, 2004 judgment. We disagree.

When this case was previously before this court, we dismissed the appeal on our

own motion in an unpublished opinion, finding that it was from a non-appealable,

interlocutory order. Roadhouse Bar-B-Que, Inc. v. Certain Underwriters at Lloyds,

03-1779 (La.App. 3 Cir. 2/11/04), 866 So.2d 420. The motion to dismiss granted on

behalf of these Defendants was based on the Plaintiff’s failure to amend its petition

in accordance with the prior rulings of the trial court as to the exceptions of no cause

of action and res judicata filed on behalf of these Defendants. As there is now a final

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judgment, this appeal is proper, and we must now consider whether the trial court’s

rulings with respect to the exceptions of no cause of action and res judicata were

correct. For the following reasons, we find that they were correct and affirm the

dismissal of Lloyd’s, Cunningham Lindsey, and Burns & Wilcox with prejudice.

The exceptions of no cause of action and res judicata are both peremptory

exceptions. La.Code Civ.P. art. 927. The exception of no cause of action seeks to

determine the sufficiency in law of the action, and no evidence can be introduced to

support or controvert the objection that the petition fails to state a cause of action.

La.Code Civ.P. art. 931. Well-pleaded facts contained in the petition must be

accepted as true in determining the outcome of the exception. City of New Orleans

v. Board of Com’rs, 93-690 (La.7/5/94), 640 So.2d 237. “In reviewing a trial court’s

ruling sustaining an exception of no cause of action, the court of appeal . . . should

subject the case to de novo review because the exception raises a question of law and

the lower court’s decision is based only on the sufficiency of the petition.” Id. at 253,

citing Mott v. River Parish Maint., Inc., 432 So.2d 827 (La.1983).

Res judicata bars relitigation when the second action arises out of the same

transaction or occurrence that was the subject matter of the first action. La.R.S.

13:4231. “While the doctrine of res judicata is ordinarily premised on a final

judgment on the merits, it also applies where there is a transaction or settlement of a

disputed or compromised matter that has been entered into by the parties.” Ortego

v. State, Dept. of Transp. and Dev., 96-1322, p. 6 (La. 2/25/97), 689 So.2d 1358,

1363, citing Bailey v. Martin Brower Co., 94-1179 (La.App. 1 Cir. 4/7/95), 658 So.2d

1299. The exception of res judicata is reviewed by the court of appeal according to

the manifest error standard when it is raised before the case is submitted. Floyd v.

City of Bossier City, 38,187 (La.App. 2 Cir. 3/5/04), 867 So.2d 993.

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In this case, Lloyd’s alleged that Plaintiff had no cause of action against it

because it made no allegation that Lloyd’s caused Plaintiff to be under-insured, failed

to allege that the $140,000.00 limits were insufficient, and failed to allege that the

building sustained a total loss. Cunningham Lindsey alleged that Plaintiff failed to

state a cause of action against it for negligent and/or “fraudulent” appraisal of damage

since Cunningham Lindsey owed no duty to and was not in any contractual privity

with Plaintiff. Burns & Wilcox alleged that Plaintiff had no cause of action against

it since it is an insurance broker and had no privity of contract with Plaintiff and

further, that it had nothing to do with the fire loss or the adjustment of the fire loss.

These Defendants also alleged that Plaintiff’s claims up to $53,547.63 were barred

by res judicata because, on June 19, 2001, after Lloyd’s paid $53,547.63 to Givens,

the additional insured/mortgagee, for the loss sustained in the fire, Beck signed a

Receipt, Release, Hold Harmless Agreement and Acknowledgment of Assignment of

Mortgage with the following provisions:

In consideration of the payment of the Policy proceeds [of $53,547.63], I,
individually and on behalf of Roadhouse Bar-B-Que, Inc., do hereby release,
remise and discharge forever certain Underwriters at Lloyds, London
subscribing to Certificate No. 169845 (“Underwriters”), Newline
Underwriting Management, Ltd., Burns and Wilcox, Ltd., Burns & Wilcox
of LA, Inc., Corrie Bauckham Batts Limited, Cunningham Lindsey US, Inc.
and all of their respective employees, agents, brokers, adjusters and
attorneys, hereafter referred to as (“the released parties”) from any and all
liability and/or obligation whatsoever up to the amount of $53,547.63 which
might be claimed under any or all of the terms, conditions, agreements or
provisions of the Building Coverage of Certificate No. 169845 . . .

....

I agree that the sum of $53,547.63, is being paid in full and complete
satisfaction of all claims under the Building Coverage of Certificate No.
169845 arising out of the incident up to the amount paid ($53,547.63) and
that by signing this Agreement, Roadhouse Bar-B-Que, Inc. and I release and
completely indemnify the released parties for all claims relating to the
Building Coverage of Certificate No. 169845 up to the amount of
$53,547.63. I also understand that I do not waive my remaining rights under
the Policy over and above the amount of $53,547.63 being paid at this time.

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The words of the release are clear, and we find no manifest error in the trial

court’s determination that the doctrine of res judicata bars the claims against these

Defendants up to $53,547.63.

We now address the motion to dismiss. The trial court agreed with these

Defendants no less than five times with respect to the exceptions of no cause of action

and res judicata. Each time, Plaintiff was given the opportunity to amend its petition

to cure the defects. Each time the Plaintiff amended, these Defendants again asserted

the same exceptions. The last time, on November 4, 2002, the trial court granted the

exceptions and allowed the Plaintiff ten days to amend as to all exceptions, including

those filed by Alexander & Bolton. Judgment was not signed until August 13,

2003,some nine months later. On November 14, 2002, Plaintiff filed a fifth amended

petition but this petition addressed only its claims against Alexander & Bolton, who

did not file any exceptions in response and instead filed an answer. Plaintiff then

attempted to appeal the August 13, 2003 judgment but, as previously stated, this court

dismissed that appeal on its own motion. After the record was returned to the trial

court, Lloyd’s, Burns & Wilcox, and Cunningham Lindsey filed a motion to dismiss

based on the Plaintiff’s failure to amend as ordered on November 4, 2002. On

September 9, 2004, Plaintiff filed its sixth amended petition; however, this filing

came too late.

We note that La.Code Civ.P. art. 934 provides that:

When the grounds of the objection pleaded by the peremptory exception
may be removed by amendment of the petition, the judgment sustaining the
exception shall order such amendment within the delay allowed by the court.
If the grounds of the objection raised through the exception cannot be so
removed, or if the plaintiff fails to comply with the order to amend, the
action, claim, demand, issue, or theory shall be dismissed.

This court has previously held that a plaintiff was not entitled to a second

opportunity to amend its petition where the trial court maintained exceptions to an

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amended petition (which was made by order of the trial court on granting the

defendants’ first exceptions) without allowing curative efforts. Dubroc v. Allstate

Ins. Co., 93-780 (La.App. 3 Cir. 3/2/94), 633 So.2d 861. This court in Dubroc

reasoned that the second judgment was a finding that the plaintiff failed to remove the

grounds of the objection and addressed the merits of the exceptions.

In Wilkins v. Hogan Drilling Co., Inc., 424 So.2d 420 (La.App. 2 Cir. 1982), the

second circuit declined to allow a plaintiff to make further amendments after the trial

court found that the second exception of no cause of action was well-founded, even

after the plaintiff amended his petition, and recognized that to allow such further

amendments would merely be an invitation to plaintiff to engage in speculative

pleading. We find that such would be the case here. The exceptions made on behalf

of these Defendants are well founded now for the same reasons as the first such

exceptions were granted by the trial court. Roadhouse failed to state a cause of action

against these Defendants even after five attempts. No further opportunity to amend

is warranted, and we affirm the trial court’s dismissal, with prejudice, of all claims

against Lloyd’s, Burns & Wilcox, and Cunningham Lindsey pursuant to La.Code

Civ.P. art. 934.

DECREE

For all of the foregoing reasons, we affirm the judgments of the trial court

dismissing the Plaintiff’s claims against Alexander & Bolton, Inc. based on

peremption and dismissing Certain Underwriters at Lloyd’s, London, Cunningham

Lindsey U.S., Inc., and Burns & Wilcox of La., Inc., with prejudice, based on

Plaintiff’s failure to amend its petition as ordered by the court. Costs of this appeal

are assessed against Plaintiff-Appellant, Roadhouse Bar-B-Que, Inc.

AFFIRMED.

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