Shephard v. St. Paul Fire, 21-30199

2013 oil-well explosion injured Jeremy and Emily Shephard and Michael and Tamisa Jackson (collectively, the Shephards). AIX Energy (AIX) was sued in state court; AIX’s insurer St. Paul provided AIX’s defense.
During discovery, AIX’s responses did not clearly identify the well owner; AIX later said completion/workover services were contracted out. Plaintiffs sought the contract under which AIX conducted operations.
In October 2015 AIX filed bankruptcy; the Shephards agreed to proceed only as to collectible insurance (St. Paul). At trial the jury verdict exceeded St. Paul’s policy limits, but the trial judgment was limited to AIX’s insurance proceeds.
On March 6, 2017, post-trial production of a Joint Operating Agreement (JOA) disclosed that NextEra owned 75% and agreed to assume 75% of AIX’s tort liabilities incurred in operations; plaintiffs contend this revealed St. Paul’s earlier misrepresentations/omissions.
The Shephards sued St. Paul in federal court under La. R.S. § 22:1973 for misrepresentation/omission (Dec. 12, 2018). St. Paul moved to dismiss as prescribed; the district court held prescription began on March 6, 2017 and dismissed. The Fifth Circuit affirmed.

Issue	Plaintiff's Argument	Defendant's Argument	Held
When did the one-year prescriptive period under La. C.C. art. 3492 begin for the § 22:1973 claim?	Prescription did not begin until the underlying judgment was final/enforceable (Nov. 5, 2018 denial of writ).	Prescription began when plaintiffs learned of the JOA (Mar. 6, 2017) and suffered appreciable damage.	Prescription began Mar. 6, 2017; suit filed Dec. 12, 2018 was prescribed.
Does contra non valentem delay accrual because plaintiffs lacked knowledge earlier?	Plaintiffs argued they reasonably could not know the claim before final judgment.	Defendants argued plaintiffs had actual/constructive knowledge by JOA production.	Court held plaintiffs obtained actual knowledge on JOA production, so contra non valentem did not delay accrual.
Are Smith and Belanger (excess-judgment accrual rule) controlling?	Plaintiffs relied on those cases to support accrual at finality of underlying judgment.	Defendants argued those cases involved excess-judgment liability and are inapposite.	Court distinguished them: here plaintiffs never faced an enforceable excess judgment, so Smith/Belanger do not apply.

Wolcott v. Sebelius, 635 F.3d 757 (5th Cir. 2011) (standard of review for Rule 12(b)(6) dismissal)
Brown v. Slenker, 220 F.3d 411 (5th Cir. 2000) (de novo review of prescription rulings)
Richard v. Wal-Mart Stores, Inc., 559 F.3d 341 (5th Cir. 2009) (prescriptive statutes construed narrowly against prescription)
Harvey v. Dixie Graphics, Inc., 593 So.2d 351 (La. 1992) (damages must be more than speculative to trigger art. 3492 accrual)
Eldredge v. Martin Marietta Corp., 207 F.3d 737 (5th Cir. 2000) (contra non valentem stops prescription until plaintiff has actual/constructive knowledge)
Terrebonne Par. Sch. Bd. v. Mobil Oil Corp., 310 F.3d 870 (5th Cir. 2002) (burden shifts to plaintiff to prove suspension/interruption after one year elapses)
Smith v. Citadel Ins. Co., 285 So.3d 1062 (La. 2019) (excess-judgment accrual rule; distinguished here)
Belanger v. Geico Gen. Ins. Co., [citation="623 F. App'x 684"] (5th Cir. 2015) (similar excess-judgment context; distinguished here)