* Pursuant to Fifth Circuit Rule 47.5, the court has determined that this opinion should

not be published and is not precedent except under the limited circumstances set forth in Rule

47.5.4.

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 07-30171

In the matter of: WHITAKER CONSTRUCTION COMPANY, INC.,

Debtor.

ST. PAUL FIRE & MARINE INSURANCE CO.,

Appellee,

v.

WHITAKER CONSTRUCTION CO.,

Appellant.

Appeal from the United States District Court

for the Western District of Louisiana

USDC No. 5:06-cv-1595

Before REAVLEY, BENAVIDES, and ELROD, Circuit Judges.

PER CURIAM:*

Appellant Whitaker Construction Co. (Whitaker) filed claims under

insurance policies issued by Appellee St. Paul Fire & Marine Insurance Co. (St.

Paul). Whitaker appeals the district court's ruling that policy provisions

foreclosing its claims do not violate Louisiana law and are therefore binding. 

We affirm. 

I. BACKGROUND

United States Court of Appeals

Fifth Circuit

F I L E D

July 24, 2008

Charles R. Fulbruge III

Clerk
No. 07-30171

1

"Any such condition, stipulation, or agreementin violation ofthis Section shall be void,

but such voiding shall not affect the validity of the other provisions of the contract."

2

St.Paul issued five one-year insurance policies ("the policies")to Whitaker

for the calendar years 1998 through 2002 respectively. These policies protected

Whitaker from financial losses resulting from the dishonesty of its employees.

After filing for bankruptcy in 2003, Whitaker learned that one of its

employees, Michael Hutcheson, had embezzled over $500,000 from Whitaker by

forging checks on Whitaker's account over a period of several years. Whitaker

filed claims under the policies seeking to recover its losses. Of the $500,000 lost,

St. Paul paid Whitaker $110,000 under the 2002 policy, but refused to pay under

any of the prior policies. Whitaker sued. Of primary focus in the ensuing

litigation was a provision common to the four pre-2002 policies, which reads: 

We'll apply this agreement to covered losses that happen while this

agreement is in effect. And you have up to one year after this

agreement ends to discover the loss.

Because it was, and still is, undisputed that Whitaker did not discover its

losses until November 2003, St. Paul filed for summary judgment in the

bankruptcy court, arguing, inter alia, that Whitaker's losses were not covered

under the pre-2002 policies because Whitaker failed to timely discover them.

For example, St. Paul argued that Whitaker's 1999 losses were not covered

because Whitaker failed to discover Hutcheson's 1999 acts of embezzlement

during that calendar year or within one year after the 1999 policy expired. 

Whitaker responded that this reading of the discovery provisions would

render them illegal under Louisiana Revised Statutes § 22:629, which

invalidates any insurance provision limiting the time within which an action

may be brought against the insurer—i.e., the "prescriptive period"—to less than

one year after a cause of action accrues. The bankruptcy court agreed with

Whitaker; accordingly, under § 22:629(C),1it disregarded the discovery

provisions,thereby rendering Whitaker's losses covered under the revised terms.
No. 07-30171

3

The district court reversed, concluding that the discovery provisions do not

violate § 22:629, and therefore Whitaker's tardy discovery of its losses

disqualified those losses from coverage. 

For its part, St. Paul argued that because none of Whitaker's losses

triggered coverage, it is entitled to return of the $110,000 it unnecessarily paid

Whitaker under the 2002 policy. The district court, noting that St. Paul failed

to raise the argument previously, remanded the issue to the bankruptcy court

for a determination of whether, as a "court of equity," it believed St. Paul was

entitled to reimbursement notwithstanding the tardiness of its argument. 

Before this court, Whitaker argues that: (1) the district court erred in

ruling that the policies do not violate § 22:629; and (2) under the Bankruptcy

Code, 11 U.S.C. § 108(a), the time within which it could file a claim under the

2001 policy was extended by operation of law to two years from the bankruptcy

court's order of relief, thereby making timely Whitaker's claim for losses

incurred in 2001. Further, St. Paul argues on appeal that it is entitled to

recoupment of its 2002 policy payment to Whitaker.

II. DISCUSSION

A. Legality of the Discovery Provisions

The policy provision common to the four pre-2002 policies reads:

We'll apply this agreement to covered losses that happen while this

agreement is in effect. And you have up to one year after this

agreement ends to discover the loss.

Louisiana courts have described the type of policies at issue here as "discovery

policies,"the hallmark of which is a requirement that the insured not only suffer

the claimed loss during the policy term but also discover that loss during the

policy period or within a limited time after the policy expires. See, e.g.,

Livingston Parish Sch. Bd. v. Fireman's Fund Am. Ins. Co., 282 So. 2d 478, 481

(La. 1973). 

Louisiana Revised Statutes § 22:629(B) provides in relevant part that: 
No. 07-30171

2 We reject Whitaker's argument that case law addressing claims-made policies are

inapposite to this appeal. Discovery policies are treated by Louisiana courts as a type of

claims-made policy, and thus have treated the two labels as interchangeable in contexts such

as the present. See, e.g., Livingston Parish, 282 So. 2d at 481; Hedgepeth v. Guerin, 96-1044,

p. 5 (La. App. 1 Cir. 03/27/97); 691 So. 2d 1355, 1359. Thus, the principles announced in

Louisiana case law with regard to claims-made policies are applicable here.

4

No insurance contract . . . issued . . . in this state . . . shall contain

any condition . . . or agreement limiting [the] right of action against

the insurer to a period of less than . . . one year from the time when

the cause of action accrues . . . .

Whitaker argues that because it was barred under the policies from filing suit

upon discovery of its losses in November 2003, the discovery provisions are

necessarily illegal. We disagree. 

Discovery provisions are not categorically impermissible. The Louisiana

Supreme Court has held that"[w]here a policy unambiguously and clearly limits

coverage to acts discovered and reported during the policy term, such limitation

of liability is not per se impermissible." Livingston Parish, 282 So. 2d at 481.

Relying on case law such as Livingston Parish, we have held that policy

provisions of the type involved here are not inherently violative of § 22:629. See

Scarborough v. Travelers Ins. Co., 718 F.2d 702, 712 (5th Cir. 1983) (holding a

claims-made provision permissible under § 22:629). Louisiana case law

subsequent to our holding in Scarborough has confirmed that provisions in

claims-made2 policies that do not have the practical effect in a given case of

establishing a prescriptive period of less than one year should be upheld.

Anderson v. Ichinose, 98-2157 (La. 09/10/99); 760 So. 2d 302; Regions Bank v.

Kountz, 05-1106 (La. App. 3 Cir. 05/31/06); 931 So. 2d 506; Robicheaux v. Adly,

00-1207 (La. App. 3 Cir. 02/01/01); 779 So. 2d 1048.

For example, in Robicheaux, the Louisiana appellate court addressed

whether an insured who failed to timely file a claim with the insurer under a

claims-made policy was entitled to coverage by operation of § 22:629. After

noting thatthe legality of claims-made policies under § 22:629 turns on the effect
No. 07-30171

3 One Louisiana court has stated that after the Louisiana Supreme Court's decision in

Anderson, which dealt with a different provision, this "effects test" has been thrown into

question and that such claims-made provisions are now categorically permissible regardless

of how they operate in context. Burns v. CLD, Inc., 38-998 (La.App. 2 Cir. 10/27/04); 886 So.

2d 607. However, the other Louisiana circuit courts to have addressed the issue have rejected

this view of Anderson and have continued to apply the case-specific approach. See Kountz, 931

So. 2d at 515; LeBlanc v. Succession of Raggio, 00-2407, pp. 4-6 (La.App. 1 Cir. 02/20/02); 818

So. 2d 140, 143. 

5

of the timeliness provision in a given case, the court concluded that the policy at

issue was not violative of § 22:629 because the insured had waited until more

than one year post-injury to file a claim, thereby making the operation of the

claim-filing obligation permissible. As the court explained:

If the alleged [injury] occurs within the policy period, and a claim

is filed outside ofthe policy period but within one year of the alleged

incident, and the insurer is notified of the claim within one year of

the alleged incident, coverage will be afforded under the claims

made policy in order to conform to Louisiana law. 

Id. at 1054. However, the court distinguished the scenario before it:

The event triggering coverage in a claims made policy is the making

of a claim. The plaintiffs did not bring a claim within the . . . policy

period. Additionally, the plaintiffs did not report the claim to the

insurer . . . within one year of the date from accrual of the cause of

action. 

Id. at 1054-55 (emphasis added). The court thus concluded that the policy did

not violate § 22:629. Id. at 1054. In other words, because the plaintiffs did not

report a claim to the insurer within one year of accrual, the policy limitation did

not have the effect of providing to them less than one year to file suit; the

plaintiffs were more than a year late anyway. See also Regions Bank v. Kountz,

05-1106, pp. 17-18 (La. App. 3 Cir. 05/31/06); 931 So. 2d 506, 517 (Because the

given "claim was made . . . long after the end of the policy term and more than

sixty . . . days thereafter as well as more than a year after the date of the

wrongful act . . . the policy language did not impermissibly limit the statutory

time granted to assert the claim" (emphasis added)).3
No. 07-30171

6

Applying Louisiana law to the facts of this case, the discovery provisions

do not violate § 22:629 so long as they did not have the effect in this instance of

limiting to less than one year post-accrualthe time within which Whitaker could

sue under a given policy. The discovery provisions here had no such

impermissible effect. Central to this conclusion is our understanding of when

Whitaker's causes of action "accrued" under Louisiana law.

Whitaker relies on the premise that its causes of action against St. Paul

accrued when Whitaker discovered its losses, not when it suffered them. Using

Whitaker's reasoning, then, the discovery provisions had the practical effect of

giving Whitaker no prescriptive period, much less one year, within which to

bring its claims or file suit because its attempt to sue on its losses immediately

after discovering them met with dismissal. The district court soundly rejected

this argument. 

Case law on which Whitaker relies in arguing that its causes of action

accrued upon discovery of its losses—decisions such as Cole v. Celotex Corp., 620

So. 2d 1154 (La. 1993)—are primarily those in which Louisiana courts have

applied the doctrine of contra non valentem, which delays commencement of the

prescriptive period "where the cause of action is not known or reasonably

knowable by the plaintiff." Id. at 1156. This doctrine represents an equitable

exception in that it requires the plaintiff invoking it to "show that he did not

know or discover such facts [giving rise to the cause of action,] and that the lack

of knowledge is not attributable to his fault." Bell v. Kreider, 03-300, p. 7 (La.

App. 5 Cir. 09/16/03); 858 So. 2d 58, 62 (quoting Hosp. Serv. Dist. No. 1 of

Jefferson Parish v. Alas, 94-897, p. 9 (La. App. 5 Cir. 6/28/95), 657 So. 2d 1378,

1383).

In its briefing, Whitaker does not attempt to argue that it qualifies for the

benefit of contra non valentem; indeed, it fails to even expressly invoke the

doctrine. Instead, Whitaker's position appears to be that a failure to discover a

loss renders that loss "unknowable" for tolling purposes without application of
No. 07-30171

7

a specific equitable tolling doctrine. That proposition is without support in

Louisiana law. Indeed, Louisiana courts have declared quite the opposite: "Mere

unawareness of a potential cause of action is not enough to invoke contra non

valentum." Bell, 858 So. 2d at 63; see also Hospital Serv., 657 So. 2d at 1383

(stating that a plaintiff "will be deemed to know that which he could have

learned from reasonable diligence"). It follows that if contra non valentem is an

equitable exception, and Whitaker fails to show that it is entitled to the benefit

of that exception, the default accrual standard applies. 

"Under Louisiana law, '[a] cause of action accrues when a plaintiff may

bring a lawsuit.'" Grenier v. Med. Eng'g Corp., 243 F.3d 200, 203 (5th Cir. 2001)

(quoting Brown v. R.J. Reynolds Tobacco Co., 52 F.3d 524, 526-27 (5th Cir.

1995)); Prejean v. Dixie Lloyds Ins. Co., 94-2979, p. 3 (La. 09/15/95); 660 So. 2d

836, 837 (La. Sept. 15, 1995) ("In Louisiana, a cause of action accrues when a

party has a right to sue."). Assuming generously that Whitaker suffered all of

its losses on the last day of the most recent policy term at issue—the 2001 policy

term—Whitaker did not seek indemnification for those losses until more than

one year thereafter. Under the terms of the polices, then, Whitaker was allowed

one year after its causes of action accrued to claim its losses, or commence an

action for coverage. Thus, the discovery provisions did not impermissibly limit

Whitaker's prescriptive period, and they therefore do not violate § 22:629.

B. Alleged Extension to File a Claim under 11 U.S.C. § 108(a)

Whitaker next argues that even ifthe policies do not offendLouisiana law,

11 U.S.C. § 108(a) of the Bankruptcy Code extended the time for it to file a claim

under the 2001 policy. Whitaker failed to raise this argument below; therefore,

it is waived. See ICEE Distribs. v. J&J Snack Foods Corp., 325 F.3d 586, 595

n.29 (5th Cir. 2003).

C. St. Paul's Recoupment Argument

Unlike the other policies, the 2002 policy covered only losses Whitaker

suffered and discovered during the policy term. Whitaker stipulated below that
No. 07-30171

8

it did not discover any of its losses until November 2003. Nevertheless, before

commencement of this litigation, St. Paul paid Whitaker $110,000 under the

2002 policy. 

Believing that the 2002 policy was never triggered, St. Paul argued in its

appellate brief that it is entitled to recoup the $110,000 it unnecessarily paid.

The district court refused to address this argument, a decision St. Paul initially

challenged before this court even though it did not file a cross-appeal. St. Paul's

failure to file a cross-appeal deprives this court of jurisdiction to address the

issue. Miller v. Butcher Distribs., 89 F.3d 265, 267 (5th Cir. 1996) ("The failure

to file a cross-appeal in a timely manner as mandated by Rule 4 of the Federal

Rules of Appellate Procedure" precludes an appellee's attack on a lower court's

order). Indeed, at oral argument St. Paul conceded that this issue is not

properly before us. We therefore do not address it.

The judgment of the district court is AFFIRMED.