Opinion ID: 479859
Heading Depth: 1
Heading Rank: 3

Heading: alleged lulling by reliance

Text: 19 Ramp asserts that it should not be held to its duty to read the policy in this case because various acts and representations of Reliance and Louisiana effectively lulled Ramp into inaction. Ramp discusses in detail the negotiations between its vice-president, Dan Duquenne, and Louisiana's agent, Ron Eaton, in an effort to show that the insurance agent intended to provide direct damage coverage to Ramp. The crux of this argument is that Ramp ultimately received a policy providing different coverage than that for which it bargained. This allegation, however, is not relevant to the statute of limitations issue raised by Ramp on this appeal. The only issue with respect to the statute of limitations is the question of when Ramp should have discovered the alleged fraud by the defendants. As we stated above, Ramp should have discovered the fraud at or shortly after the time it received a copy of the insurance policy. Prior negotiations between Ramp and Louisiana therefore have nothing to do with this discovery issue. While the alleged misrepresentations by the defendants may have constituted the alleged fraud, such conduct does not constitute sufficient circumstances to lull Ramp into inaction in discovering the fraud. 20 Ramp also alleges that Reliance's payment of prior theft and vandalism claims was sufficient to lull Ramp into not discovering the fraud. Ramp does not describe in detail the prior similar claims which it asserts were treated as being covered by the policy and were paid by Reliance. As far as we can discern from our reading of the deposition testimony, the only theft and vandalism claims paid by Reliance involved the theft of several items over a two-day period in November of 1980. Lee Emmert, a former Reliance employee, testified in his deposition that Reliance paid two small claims for items stolen from the insured's vehicles in New Orleans and paid another claim for several tires and wheels stolen off the insured's vehicles during this same time. Ramp's vice-president also testified that Reliance paid a claim for the stolen tires and wheels, but he did not mention any other theft and vandalism claims paid by Reliance. 21 The small payments related to this two-day incident in New Orleans do not constitute sufficient circumstances to lull Ramp into not discovering the actual contents of the policy. Reliance has exhibited no extensive or even significant course of conduct indicating that it regularly approved and paid such damage claims, as alleged by appellant. In addition, there is no evidence in the record that Ramp itself relied on these isolated prior payments in determining the extent of its coverage under the 1981 policy. Without evidence of a significant practice of paying such claims and without any justifiable reliance upon such a practice, Ramp cannot complain of being lulled into not discovering the fraud. 22 To the extent that Reliance did pay previous damage claims made by Ramp, the evidence shows that Reliance was required to do so under Ramp's insurance policy. Part V of the policy required Reliance to pay those damage claims for which Ramp was legally liable. Ramp admits in its brief that it reported each prior theft and vandalism claim within one year of the loss. Thus, the statute of limitations governing an action against Ramp for these losses had not yet run, so at the time Reliance paid these claims Ramp was still exposed to liability. Because Ramp faced potential legal liability for these losses, Part V of the policy applied. Payment by Reliance therefore could not have misled Ramp into assuming the existence of more extended coverage. 23 The claim for the damages to the Lincolns in this case, however, rests on different legal footing. All parties agree that by the time Ramp paid the $38,000 to L & N, the one-year statute of limitations for negligence liability had already run. Thus, Ramp could not have been held legally liable for the damage to the cars except pursuant to its contract with L & N. Ramp clearly paid the claim pursuant to this potential contractual liability. The garagekeeper's policy, however, expressly excluded from its coverage liability resulting from any agreement or contract by which Ramp accepted responsibility for the loss. 1 Thus, Reliance's obligation to pay only extended to those losses for which Ramp was legally liable on something other than a contract theory. In this case, unlike the previously paid damage claims, the statute of limitations for negligence had already run. Ramp could no longer have been held legally liable except by contract, and contractual liability was expressly excluded from the scope of the insurance policy. The fact that Reliance properly paid the prior claims pursuant to the legal liability provision of the policy certainly does not constitute sufficient circumstances to lull Ramp into inaction and justify its failure to discover the alleged fraud. 24