MCKERNAN v. ABC INSURANCE COMPANY AIG (2021)

Supreme Court of Louisiana.2021-11-23No. No. 2021-C-00859

Summary · law.co

Holding. The writ of review was granted, the court of appeal judgment was reversed, and the district court's judgment sustaining the peremption exception was reinstated.

McKernan sought a writ of review challenging the dismissal of her lawsuit against an insurance agency on grounds of peremption—a legal doctrine that extinguishes a claim after a set period. The insured received her initial insurance policy in December 2008 and copies of renewal policies through 2016, each containing identical flood coverage limits of 250/100/250. Because McKernan had access to these documents when she received them, the court determined she either knew or reasonably should have known the flood coverage terms at that time.

The court applied the principle that insureds have a duty to review policies upon receipt and are presumed to understand their contents. Under Louisiana law, the one-year discovery period for filing suit began in December 2008 when she first received the policy. Since McKernan did not file her lawsuit until May 2017, her claims against the insurance agency and its agent were barred by peremption. The court found this conclusion unavoidable regardless of whether the limitations period was measured from the initial policy or the final December 2015 renewal.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

Whether an insured's claims are time-barred under the one-year peremption period established by Louisiana law
Whether an insured is deemed to know policy terms upon receipt of the policy document
Calculation of the discovery date for peremption purposes when the insured received multiple renewal policies

Procedural posture

McKernan sought a writ of review to challenge the court of appeal's affirmance of the district court's dismissal on peremption grounds.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion · public domain

Writ application granted. See per curiam.

Writ granted. This court has held that it is the insureds obligation to read the policy when received, since the insured is deemed to know the policy contents. Seruntine v. State Farm Fire & Cas. Co., 10-1108 (La. 9/3/10), 42 So.3d 968; Isidore Newman School v. J. Everett Eaves, Inc., 09-2161, p. 12 (La. 7/6/10), 42 So.3d 352, 359. In this case, there are no facts under which Ms. McKernans claims against Brad Bourg and Bourg Insurance Agency, Inc. are not perempted. The district court correctly noted that Ms. McKernan received a copy of the initial insurance policy in December 2008. Additionally, Ms. McKernan received copies of every yearly renewal policy covering her property through 2016. A simple review of the initial policy in 2008, as well as the numerous following renewal policies, would have revealed 250/100/250 flood coverage limits. Under these circumstances, Ms. McKernan knew or should have known of the flood policy limits in December 2008 when she received a copy of the initial policy. Moreover, even if we were to consider the most recent policy renewal date, which occurred in December 2015, plaintiffs claims would still be perempted because she did not file suit until May 2017–well beyond the one-year discovery date set forth in La. R.S. 9:5606. Accordingly, the writ is granted. The judgment of the court of appeal is reversed, and the judgment of the district court sustaining the exception of peremption is reinstated.

Hughes, J., would deny.

Weimer, C. J., recused.