NATIONAL COUNCIL ON COMPENSATION INSURANCE
v.
QUIXX TEMPORARY SERVICES, INC., New Orleans Corporation, Inc., David L. Barrios, Pierre C. Barrios and Aparicio, Walker & Seeling, Inc.
Court of Appeal of Louisiana, Fourth Circuit.
*121 Stewart E. Niles, Jr., Edward D. Wegmann, Virginia W. Gundlach, Jones, Walker, Waechter, Poitevent, Carrere & Denegre, New Orleans, for Plaintiffs/Appellants.
Michael R. Allweiss, Max J. Cohen, Lowe, Stein, Hoffman, Allweiss & Hauver, New Orleans, for Appellee, Aparicio, Walker & Seeling, Inc.
Robert E. Leake, Jr., Stanton E. Shuler, Jr., Leake & Andersson, New Orleans, for Defendant, Pierre C. Barrios.
Before BYRNES, PLOTKIN and WALTZER, JJ.
PLOTKIN, Judge.
Appellants appeal the granting of a peremptory exception of liberative prescription dismissing their claim for damages arising from negligent misrepresentation. We affirm the dismissal of appellants' prescribed action.
On January 16, 1989, Pierre Barrios on bеhalf of Quixx Temporary Services (Quixx) applied to the National Council on Compensation Insurance (NCCI) for worker's compensation insurance. Aparicio, Walker & Seeling (AWS) signed Quixx's application as agency and producer. Bаsed upon the information provided by Quixx in its application, the NCCI found Quixx to be eligible for worker's compensation insurance and estimated Quixx's premium. The NCCI then forwarded the application to Aetna Casualty & Surety Company (Aetna), who issued а worker's compensation insurance policy to Quixx. Aetna renewed the policy in 1990, 1991 and 1992.
On February 16, 1990, David Barrios on behalf of the New Orleans Corporation (NOC) applied to the NCCI for worker's compensation insurance. AWS signed NOC's application as agency and producer. Based upon the information provided by NOC in its application, the NCCI found NOC to be eligible for worker's compensation insurance and estimated NOC's premium. The NCCI then forwarded the application to Aetna, who issued a worker's compensation policy to NOC. Aetna renewed the policy in 1991.
NCCI and Aetna allege that Pierre Barrios misrepresented Quixx's payroll and the nature of its business on its NCCI application to obtain worker's compеnsation insurance for a substantially reduced premium. NCCI and Aetna also allege that David Barrios misrepresented NOC as a new business distinct from Quixx on its NCCI application to escape Quixx's risk history and obtain a lower premium based on a lower experience rating. NCCI and Aetna allege that they have suffered damages in excess of $800,000 as a result of these misrepresentations.
On November 27, 1991, NCCI and Aetna filed suit in the United States District Court for the Eastern District of Louisiana. AWS was served through its president with a copy of the summons and complaint in the federal suit on January 24, 1992. Pierre Barrios was served on January 28, 1992. The suit in federal court was ultimately dismissed for lack of diversity jurisdiction. NCCI and Aetna filed suit in Civil District Court for Orleans Parish on March 5, 1992. Defendants' peremрtory exception of liberative prescription was granted on December 20, 1994.
On May 11, 1990, NCCI at the request of Aetna inspected Quixx and NOC at their shared office. The NCCI inspector was informed by David Barrios that Quixx and NOC were commonly owned. The inspection report produced by NCCI indicated the common ownership of Quixx and NOC. NCCI's Experience Rating Plan Manual indicates that business entities are combinable if they have common majority ownership. From this evidence, the trial judge concludеd that the plaintiffs should have discovered sufficient *122 information to start prescription running no later than the May 11, 1990 inspection. The trial judge also concluded that these circumstances did not amount to a continuing tort and that prescription hаd not been suspended by contra non valentem. Therefore, the trial judge ruled that any action for negligent misrepresentation had prescribed eight months before the defendants were properly served in the federal suit.
The delictual action of negligent misreрresentation was recognized by the Louisiana Supreme Court in Devore v. Hobart Mfg. Co.,
Prescription is interrupted by the commencement of an action in a court of competent jurisdiction and venue. La.C.C. art. 3462. If an action is commenced in a court lacking jurisdiction or a court of improper venue, prescription may be interrupted by service of process within the prescriptive period. Id.; see, e.g., Cochren v. Louisiana Power & Light Co., 94-0002, p. 5 (La. App. 4th Cir. 6/15/94),
To decide whether the action was timely, it is first necessary to determine when liberative prescription began to run. Prescription in actions arising ex delicto commences on the day actual and appreciable damage is sustained. La.C.C. art. 3492. The damage need not be calculаble or fully incurred but must not be merely speculative. Harvey v. Dixie Graphics, Inc.,
According to appellants, as a result of misrepresentations made on applications for worker's compensation insurance, they issued polices for substantially reduced premiums. Therefore, they sustained actual and appreciable damage when the policies were issued and the first premium was accepted. This damage, although undetermined, was neither speculative nor contingent upon a subsequent event, unlike the damage sustained in Hero Lands Co. v. Borello,
Appellants claim that the commencement of liberative prescription should be delayed because appellees committed a complex business tort that involved continuous, cumulative misrepresentations analogous to a continuing tort. Liberative prescription does not commence until a continuing tort *123 ceases. See, e.g., South Central Bell Telephone Co. v. Texaco, Inc.,
Appellants, however, claim that appellees were under a continuing duty to provide accurate information to elevate these two alleged misrepresentations into continuing tortious acts sufficient to delay the commencement of prescription. The only authority cited by appellants in favor of this position is readily distinguished. Cagle v. Loyd, supra, unlike the present case, contains continuous and cumulative conduct reminiscent of Bustamento v. Tucker, supra. In Bustamento, a forklift operator subjected a coworker to harassment almost daily for two years. Bustamento, supra, at 534. In Cagle, a banker dominated the economic lives of cattle ranсhers, reassuring the ranchers whenever they began to lose confidence in him:
In short, it was part of Loyd's apparent genius in the field of public relations that, the moment the slightest doubt in his abilities emerged, he could assuage it and renew the plaintiffs' trust аnd confidence in him, and their reliance on his authority. Such was his domination and control that the plaintiffs never knew that the cause of their problems was Loyd himself.
Cagle, supra, at 599. Cagle does not stand for the proposition that the breach of a duty to provide сorrect information on a insurance application is a continuing tort until the misrepresentation is corrected or discovered. Instead, despite the reference to Bustamento in dicta, Cagle was disposed of on the basis of contra non valentem because plaintiffs could not have reasonably bеen expected to have discovered the cause of action. Cagle, supra, at 599-602. No conduct has been alleged by appellants that is comparable to Cagle`s constant manipulation or Bustamento`s continuing harassment.
Finally, appellants invoke the maxim contra non valentem agere nulla currit praescriptio to suspend prescription. In particular, appellants argue that prescription should be suspended becаuse they were prevented from acting by appellees' misrepresentations and by a continuing relationship of trust with appellees.
Under exceptional circumstances, courts dispense with prescription in the interests of justicе. See La.C.C. art. 3467 cmt. (d); see also Hyman v. Hibernia Bank & Trust Co.,
... (3) Where the debtor himself has done some act effectually to prevent the creditor from availing himself of his cause of action.
Modern jurisprudence also recognizes a fourth type of situation where contra non valentem applies so that prescription does not run: Where the cause of aсtion is not known or reasonably knowable by the plaintiff, even though his ignorance is not induced by the defendant. (This principle will not except the plaintiff's claim from the running of prescription if his ignorance is attributable to his own willfulness or neglect; that is, а plaintiff will be deemed to know what he could by reasonable diligence have learned).
Corsey v. State, through Dept. of Corrections,
Appellants dispute the trial judge's finding that they had discovered sufficient information on May 11, 1990 for the cause of action to be known or reasonably knowable. Prescription runs from the time *124 at which the plaintiff has actual or constructive knowledge of the tortious act, which is the time at which the plaintiff has information sufficient to excite attеntion and prompt further inquiry. See, e.g., Adams v. National Bank of Commerce, 93-2346, 94-0486, p. 5 (La.App. 4th Cir. 9/29/94),
We agree that appellants could not have had actual or constructive knowledge of the cause of action at the time the negligent misrepresentations are alleged to have been made. We cannot say, however, that the trial judge's determination that appellant's inaction was unreasonable after May 11, 1990, when the common ownership of the businesses was discovered, was in error. This case is not like Adams, supra, in which the verbal misconduct was tortious on its face. But neither is it like Cagle, supra, in which the tortfeasor engaged in such extensive subterfuge as to make it impossible for the plaintiffs to discover before his suicide that they had been harmed. In this case, appellants are sophisticated entities with expertise in worker's compensation insurance.
Appellants also claim exception to liberative prescriptiоn should be made because they are victims of their relationship of trust with appellees, relying on Plaquemines Parish Comm'n Council v. Delta Development Co.,
Therefore, the granting of the exception of liberative prescription against appellants is affirmed.
AFFIRMED.