The issue presented for our review is whether the action for damages brought by the tortfeasor's employer against its insurance agent for the alleged failure to procure the requested insurance coverage has prescribed.
Mr. and Mrs. Rogers sustained injuries when their automobile was struck by a truck owned and operated by Korey Dufrene, an employee of Crewboats, Inc. Plaintiffs brought suit against Dufrene and several insurers, including State Farm Mutual Automobile Insurance Company (State Farm). Plaintiffs later added Crewboats, Inc. as a defendant alleging that Dufrene was in the course and scope of his employment with Crewboats, Inc. at the time of the accident and that State Farm provided automobile liability coverage to Crewboats, Inc.
State Farm filed a motion for summary judgment denying coverage on the ground that none of the four policies issued to Crewboats, Inc. provided "an employee non-ownership liability endorsement," that is, coverage for the corporation's employee while the employee is driving his own personal vehicle for company business. The
An action in tort is governed by the prescriptive period of one year while an action on a contract is governed by the ten year prescriptive period for personal actions.
This court in Karam v. St. Paul Fire & Marine Insurance Co., 281 So.2d 728 (La. 1973), discussed the duty owed by an insurance agent to his client. In Karam, the insured had requested "as much property damage coverage as the agent could obtain." While the agent had intended to procure $100,000 of coverage, he in fact had only provided $10,000 of coverage. In determining the liability of the insurance agent to the insured this court stated:
Id. at 730-31. In Karam, this court found the insurance agent negligently failed to procure property damage liability coverage in the amount requested by the plaintiff. Although prescription was not at issue in Karam, the court clearly characterized the action of an error or omission on the part of the insurance agent as delictual. See also Chandler v. Jones, 532 So.2d 402 (La. App. 3d Cir.1988); Cambre v. Travelers Indemnity Co., 404 So.2d 511 (La.App. 4th Cir.1981), writ denied, 410 So.2d 761 (La. 1982).
The applicable prescriptive period in an action by a patient against her physician was addressed in Sciacca v. Polizzi, 403 So.2d at 731. This court held that:
In Elzy v. ABC Insurance Co., 472 So.2d 205 (La.App. 4th Cir.), writ denied, 475 So.2d 361 (La.1985), a one year prescriptive period was found applicable to a malpractice claim by a client against his former attorney. The court noted the distinction between nonfeasance and misfeasance of contractual obligations. Nonfeasance was exclusively a breach of contract; misfeasance could be a tort. Thus, the issue was whether the attorney's behavior was nonfeasance of his obligations and therefore a breach of contract governed by ten years, or misfeasance governed by the tort prescription of one year.
Considering the reasoning of the jurisprudence previously discussed, we see no reason why the duty imposed upon an insurance agent in an action by a client against his agent should be any different than that imposed upon attorneys, physicians and accountants. The nature of certain professions is such that the fact of employment does not imply a promise of success, but an agreement to employ ordinary skill and care in the exercise of the particular profession. Phelps v. Donaldson, 243 La. 1118, 150 So.2d 35, 37 (1963). The duty imposed upon the insurance agent as well as those others set forth above upon whose advice the client or patient depends is that of "reasonable diligence" a breach of which duty results in an action in negligence.
Statutes have been recently enacted by the Louisiana Legislature to provide for one year prescriptive periods for actions for physician malpractice (La.R.S. 9:5628), for legal malpractice (La.R.S. 9:5605) and for professional accounting liability (La. R.S. 9:5604).
Applying the above precepts to the instant case, we find that the one year prescriptive period applies to the third party action of Crewboats, Inc. against its insurance agent, Mr. Eisenbraun. First, we note that Crewboats, Inc. alleged in its petition that Eisenbraun's failure to provide insurance coverage as requested was a negligent act on his part and he should be held responsible for the damages suffered by Crewboats, Inc. Second, the evidence before us, including parts of the deposition of Patrick Pescay, president of Crewboats, Inc., his affidavit and portions of the deposition of Mr. Eisenbraun, does not support a finding that the specific result of insurance coverage for non-owned vehicles driven by employees was warranted by Mr. Eisenbraun. In his affidavit, Mr. Pescay averred that he instructed Mr. Eisenbraun "to provide full coverage for Crewboats, Inc. under all circumstances." He further averred that he was "under the impression" that coverage was in effect for employees while using their private vehicles for company business. However, in his deposition he admitted that he did not "specifically" request that Mr. Eisenbraun provide coverage for employees of Crewboats, Inc. using their own vehicles on company business. Mr. Eisenbraun testified by deposition that he did not include an endorsement for employer's non-ownership automobile liability because he was informed by Mr. Pescay in their initial conversations that company employees would not be using their own private vehicles on company business. Last, we conclude that this is not a situation of nonfeasance, that is, where the agent has taken no action whatsoever, since the evidence clearly supports the finding that Mr. Pescay requested and Mr. Eisenbraun procured automobile liability insurance for the four vehicles owned by Crewboats, Inc. The actions taken by Eisenbraun on behalf of Crewboats, Inc. resulted in a misfeasance of a duty allegedly owed by Eisenbraun to Crewboats, Inc., a duty which we have determined is delictual in nature. Since we have concluded that Eisenbraun neither warranted the specific result of obtaining the requested coverage nor did nothing at all, then the alleged misfeasance of his duty sets forth a cause of action in tort and the one year prescriptive period applicable to actions in tort will apply to this cause of action by Crewboats, Inc. against Eisenbraun.
Finally, we must determine whether the cause of action has prescribed in the instant case. Crewboats, Inc. was aware of Mr. Eisenbraun's alleged failure to provide coverage for the automobile owned and operated by the tortfeasor (Dufrene) in this case at least by February 2, 1989, when it filed a "Memorandum in Opposition to Motion for Summary Judgment" by State Farm and referred to the deposition testimony of Mr. Eisenbraun and the affidavit of Mr. Pescay. Crewboats, Inc. did not file its third party action against Mr. Eisenbraun until June, 6, 1990, a year and four months later. Thus, we find that the action has prescribed.
For the reasons assigned, the judgment of the court of appeal is reversed. The judgment of the trial court maintaining the exception of prescription and dismissing the third party petition of Crewboats, Inc. against Robert L. Eisenbraun is reinstated.
LEMMON, J., concurs and assigns reasons.