United States Court of Appeals

Fifth Circuit



## FILED

March 28, 2005

Charles R. Fulbruge III

Clerk IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

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No. 04-30527

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TRAVELERS CASUALTY & SURETY COMPANY OF AMERICA,

Plaintiff - Appellant,

versus

WRIGHT INSURANCE AGENCY INC., doing business as Wright & Percy Insurance;

WRIGHT INSURANCE AGENCY LLC; WMS LLC, doing business as Wright & Percy

Insurance

Defendants - Appellees.

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Appeal from the United States District Court

For the Middle District of Louisiana

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Before JONES, WIENER, and CLEMENT, Circuit Judges.

EDITH BROWN CLEMENT, Circuit Judge:

I.

This is an appeal from the dismissal, on summary judgment, of Travelers Casualty and Surety

Company of America’s (“Travelers”) suit against Wright and Percy Insurance Agency (“Wright”).

Travelers, incorporated in Connecticut, sued Louisiana-based Wright, its agent, for breach of contract

in relation to bonds that Wright issued to a construction company in Baton Rouge, Louisiana. The

bonds were issued to remove a lien that an engineering c o mpany had filed for unpaid servicesconnected to work it performed on a Baton Rouge construction site. The breach centered around

nine signatures that Wright failed to obtain for the bond documents but were nevertheless required

pursuant to Wright’s power of attorney agreement with Travelers. Travelers, aware of the breach

no later than March 2001, brought this lawsuit in April 2003. The district court dismissed the case

with prejudice because it was filed outsi de o f Louisiana’s statutory peremptive period. Travelers

timely appeals.

II.

Travelers first argues that Louisiana limitations law is not controlling. Travelers instead asks

this Court to apply Connecticut’s six-year statutory period for general contract claims. S ee C ONN

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. § 52-576(a) (providing for the six-year period). Connecticut’ s law is not specifically

tailored to insurance companies. I d. The district court’s rejection of Connecticut law is a decision

that this Court reviews de novo

. M ayo v. Hartford Life Ins. Co.

, 354 F.3d 400, 403 (5th Cir. 2004).

A federal court, sitting in diversity, applies the choice of law rules from the forum state—here,

Louisiana. I

d. Article 3537 of the Louisiana Civil Code provides the choice of law provisions where,

as here, the issue is breach of contract:

Except as otherwise provided in this Title, an issue of conventional obligations is governed

by the law of the state whose policies would be most seriously impaired if its law were not

applied to that issue.

That state is determined by evaluating the strength and pertinence of the relevant policies of

the involved states in the light of: (1) the pertinent contacts of each state to the parties and

the transaction, including t he place of negotiation, formation, and performance of the

contract, the location of the object of the contract, and the place of domici le, habitual

residence, or business of the parties; (2) the nature, type, and purpose of the contract; and (3)

the policies referred to in Article 3515, as well as the policies o f facilit ating the orderly

planning of transactions, of promoting multistate commercial intercourse, and of protecting

one party from undue imposition by the other.

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. art. 3537 (West 2004). This article creates, broadly, a two-step inquiry.Roberts v. Energy Dev. Corp.

, 235 F.3d 935, 939 (5th Cir. 2000). The court m ust determine the

relevant policies at issue, and then balance those policies to fi nd which state’s interests are most

harmed in light of the facts surrounding the case. Id.

Under article 3537’s framework, Louisiana law applies. First, Louisiana has a strong public

policy interest with this type of suit: in passing § 9:5606 (discussed below), Louisiana has evinced

a desire to regulate the insurance industry with respect to tort and contract lawsuits. No comparable

Connecticut provision exists. Second, the facts found by the district court strongly militate towards

the application of Louisiana law: the contract was entered into in order to allow a Louisiana business

to sell insurance to Louisiana customers, the contract was executed in Louisiana, the circumstances

surrounding the breach took place in Louisiana, and “virtually” all communication between Wright

and Travelers over the bonds occurred within Louisiana. The only factual connection to Connecticut

is that Travelers is a Connecticut corporati on. Where the weight of the relevant facts and incidents

took place in Louisiana, and the state has strong public policies in enforcing its laws, this Court must

apply Louisiana law. See

, e.g.

, Harrison v. R.R. Morrison & Son, Inc.

, 862 So. 2d 1065, 1069–71

(La. Ct. App. 2003).

III.

Having determined that Louisiana law applies, we examine whether the district court erred

in dismissing Travelers’ lawsuit. In 1991, the Louisiana legislature enacted section 9:5606 of the

Louisiana Revised Statutes, which states, in pertinent part:

(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 jurisdicti o n 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, om ission, or

neglect is discovered or should have been discovered. However, even as to actions filedwithin 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.

. . .

(D) The one-year and three-year periods of limitation provided in Su bsection A of thi s

Section are peremptive periods

. . . [and] may not be renounced, interrupted, or suspended.

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. § 9:5606(A), (D) (West 2004) (emphasis added). “Unless t imely exercised,”

a peremptive righ t is “extinguished upon the expiration of the peremptive period.” L A

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. ar t . 3561 (West 2004). Peremptive rights are not subject to c ontra non velentem

, which

otherwise would toll the limitations period until the cause of action is discovered. R eeder v. North

,

701 So. 2d 1291, 1298 (La. 1997) (“[N]othing may interfere with the running of a peremptive period.

It may not be interrupted or suspended; nor is there provision for its renunciation. And exceptions

such as contra non valentem are not applicable.”) (quoting Hebert v. Doctors Mem’l Hosp.

, 486 So.

2d 717, 723 (La. 1986)). The thrust of Travelers’ argument on appeal is that the one-y ear

pe r iod—the period at issue—is prescriptive, i.e.

, it may be tolled until the cause of action is

discovered by the plaint iff. The legislature has made clear in subpart (D), however, that both the

three-year limitation and the one-year limitation are considered peremptive, not prescriptive. Thus,

t he right is triggered when the underlying a ct is discovered, which in this case was no lat er than

March 10, 2001. Travelers had one year from that date to file suit. Because the complaint was not

filed until April 2003, the district court properly dismissed Travelers’ complaint for being outside of

that statutory window.

IV.

The judgment of the district court is AFFIRMED.