# Kronlage Family Limited Partnership v. Eagan Insurance Agency, LLC

> District Court, E.D. Louisiana · February 15, 2023

URL: https://www.frixlaw.com/law-library/cases/10188962

## Case

- **Court:** District Court, E.D. Louisiana
- **Decided:** February 15, 2023
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/10188962

## How later opinions describe it (automated extraction)

- applying the standard for constructive knowledge outlined by the Louisiana Supreme Court in Campo to peremption pursuant to La. Rev. Stat. § 9:5606

## Opinion text

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA

KRONLAGE FAMILY LIMITED CIVIL ACTION
PARTNERSHIP

VERSUS NO. 22-959

EAGAN INSURANCE AGENCY, LLC et al. SECTION: “G”(5)

ORDER AND REASONS
This litigation arises out of alleged damage to Plaintiff Kronlage Family Limited
Partnership’s (“Plaintiff”) properties during Hurricane Ida.1 Plaintiff brings breach of contract and
negligence claims against Defendants Eagan Insurance Agency, LLC (“Eagan”) and Paul
Gremillion (“Gremillion”) (collectively, “Defendants”).2 Plaintiff alleges that Eagan, through
Gremillion as its insurance agent, bound Plaintiff to an inadequate insurance policy containing an
arbitration clause.3 Before the Court is Defendants’ “Motion to Dismiss Pursuant to Rule
12(b)(6).”4 In the motion, Defendants argue that Plaintiff’s claims are perempted by Louisiana
Revised Statute § 9:5606 because Plaintiff had constructive notice of the arbitration clause in June
2021 but did not bring this lawsuit until August 22, 2022.5 In opposition, Plaintiff argues that its
claims are not perempted because Plaintiff did not learn until April 2022 that Gremillion failed to

1 Rec. Doc. 11-3 at 2.
2 Id. at 2–3.
3 See id.

4 Rec. Doc. 11.
5 Rec. Doc. 11-1 at 4–5.
follow through on his assurance that he would remove the arbitration clause.6 Having considered
the memoranda in support and in opposition, the record, and the applicable law, the Court denies
the motion.
I. Background

A. Factual Background
This litigation arises out of alleged damage to Plaintiff’s properties during Hurricane Ida.7
Plaintiff alleges that it hired Eagan to procure an insurance policy for the properties located at 1801
and 1809 S. Sherwood Forest Blvd., Baton Rouge, LA 70816 (the “Properties”).8 Plaintiff avers
that, in May 2021, Gremillion, as Eagan’s insurance agent, procured Policy No. 2021-800905-01
to cover the Properties from all risk of loss (the “Policy”).9 Plaintiff avers that, around that time,
Gremillion “claims to have delivered the [Policy]” to Plaintiff’s corporate representative, Curt
Kronlage (“Kronlage”).10 Plaintiff alleges that, upon reading the Policy and discovering that it
contained an arbitration clause (the “Arbitration Clause”), Kronlage told Gremillion that the
Arbitration Clause was “not acceptable.”11 Plaintiff contends that Gremillion told Kronlage he
“would have the Arbitration [Clause] removed.”12

Plaintiff alleges that, on August 29, 2021, the Properties were severely damaged by
hurricane force winds sustained during Hurricane Ida and Plaintiff submitted claims under the

6 Rec. Doc. 14.
7 See Rec. Doc. 11-3.
8 Id. at 1.
9 Id.
10 Id.
11 Id. at 2.
12 Id.
Policy through Eagan.13 Plaintiff alleges that “[i]t was only after the claim was filed that [Plaintiff]
learned that Defendants . . . did not fix the [Policy] and had sold [Plaintiff] an insurance contract
. . . with a ridiculous Arbitration Clause.”14 Thus, Plaintiff brings breach of contract and negligence
claims against Defendants.15

B. Procedural Background
Plaintiff filed a petition for damages against Defendants in the Twenty-Fourth Judicial
District Court for the Parish of Jefferson on August 22, 2022.16 On November 4, 2022, Defendants
removed the action to this Court, asserting subject matter jurisdiction based on a federal question
under 28 U.S.C. §§ 1441 and 1446.17 In the Notice of Removal, Defendants asserted that removal
was proper because this litigation relates to the Arbitration Clause, which falls under the
Convention Act, 9 U.S.C. § 201, et seq. (the “Convention Act”).18 “Defendants averred in the
Notice of Removal that, because this Court had already determined that this same Arbitration
Clause falls under the Convention Act in Plaintiff’s suit against the insurers of the Policy, Kronlage
Family Limited Partnership v. Independent Specialty Insurance Company, et al. (the “Insurance

13 Id.
14 Id.
15 Id.
16 Id.
17 Rec. Doc. 1 at 3.
18 Id.
Action”),19 and because the Arbitration Clause relates to this dispute, this Court has subject matter
jurisdiction pursuant to the Convention Act.20
The case was originally randomly allotted to Judge Greg Gerard Guidry.21 On November
11, 2022, Plaintiff filed a motion to stay this proceeding pending the potential remand of the
Insurance Action to state court.22 On December 9, 2022, the case was transferred to this Court as

related to the Insurance Action.23 On December 13, 2022, the Court denied Plaintiff’s motion to
stay as moot because the Court had already denied as moot Plaintiff’s motion to remand the
Insurance Action on October 19, 2022.24 On January 18, 2023, the Court stayed and
administratively closed the Insurance Action and compelled Plaintiff to arbitrate its claims against
the insurers of the Policy.25
Meanwhile, on December 2, 2022, Defendants filed the instant motion to dismiss.26
Plaintiff filed an opposition to the motion on January 10, 2023.27 With leave of Court, Defendants

19 No. 22-1013.
20 Rec. Doc. 1 at 7; see also No. 22-1013, Rec. Doc. 25 (denying Plaintiff’s motion to remand its action
against the Policy’s insurers, Independent Specialty Insurance Company and Certain Underwriters at Lloyd’s London,
in part because the Arbitration Clause falls under the Convention Act).
21 Rec. Doc. 3.
22 Rec. Doc. 5.
23 Rec. Doc. 12.
24 Rec. Doc. 13.
25 No. 22-1013, Rec. Doc. 68.
26 Rec. Doc. 11.
27 Rec. Doc. 14.
filed a reply brief in further support of the motion on January 18, 2023.28 On January 19, 2023,
with leave of Court, Plaintiff filed a sur-reply in further opposition to the motion.29
II. Parties’ Arguments
A. Defendants’ Arguments in Support of the Motion to Dismiss

Defendants argue that Plaintiff’s claims should be dismissed because they are perempted
by Louisiana Revised Statute § 9:5606.30 Defendants aver that Section 9:5606 requires a plaintiff
to file suit against an insurance broker “within one year of a plaintiff’s knowledge or constructive
knowledge of the act, omission, or neglect that led to the cause of action.”31 Defendants contend
that the peremption clock in this case began to run “the moment that Plaintiff received the
[Policy].”32 Defendants assert that, “[b]y its own admission [in the Petition], Plaintiff received a
copy of the [Policy] in June 2021.”33 Defendants argue that “it is not conceivable, let alone
plausible, ‘that it was only after the claim was filed that [Plaintiff] learned that [Defendants] did
not fix the policy.”34 Defendants further argue that the Court must presume that Plaintiff read the
Policy, as is its duty under Louisiana law, such that the one-year peremptive period began to run

28 Rec. Doc. 19.
29 Rec. Doc. 21.
30 See Rec. Doc. 11-1 at 6.
31 Id. at 6–7 (quoting La. Rev. Stat. § 9:5606).
32 Id. at 7.
33 Id. at 8.
34 Id. (quoting Rec. Doc. 11-3 at 2).
in June 2021.35 Thus, Defendants conclude that Plaintiff’s claims are time-barred because Plaintiff
did not file suit until fourteen months after receiving a copy of the Policy.36
B. Plaintiff’s Arguments in Opposition to the Motion to Dismiss
In opposition, Plaintiff makes two arguments. First, Plaintiff argues that Defendants’

assertions that Plaintiff is “presumed to have known the contents of his insurance policy” and the
peremptive period “begins to run when the plaintiff receives a copy of the policy” are “not
applicable to the facts of this case.”37 Plaintiff avers that, because the litigation is based on
Defendants’ failure to remove the Arbitration Clause from the Policy or procure a new policy, the
peremptive period does not begin to run until Plaintiff discovered this failure.38 Plaintiff asserts
that it instructed Gremillion to remove the Arbitration Clause upon reading the Policy, and relied
upon Gremillion’s assurance that he would do so.39 Plaintiff contends that the discovery of
Defendants’ failure to remove the Arbitration Clause “did not occur until well after Hurricane
Ida.”40
Second, Plaintiff argues that dismissal of this action is premature because discovery is
ongoing and necessary to help Plaintiff support its claims.41 Plaintiff contends that it has been

“unable to perform additional discovery and take depositions required to support its claims” due

35 Id.
36 Id. (citing Campbell v. Stone Ins., Inc., 509 F.3d 665, 670-71 (5th Cir. 2007)).
37 Rec. Doc. 14 at 4.
38 Id. at 4–5.
39 Id. at 4 (citing Rec. Docs. 11-3; 14-2 (Kronlage’s affidavit)).
40 Id. at 5.
41 See id.
to the Court’s Hurricane Ida Case Management Order.42 Plaintiff avers that it needs to take
Gremillion’s deposition and has already scheduled a Rule 37 discovery conference to determine
possible dates.43
C. Defendants’ Arguments in Further Support of the Motion to Dismiss

In reply to Plaintiff’s opposition, Defendants make three arguments in further support of
the motion. First, Defendants argue that Plaintiff does not dispute that it received a copy of the
Policy in June 2021, and the peremption clock begins “when the policyholder has constructive
knowledge of the agent’s alleged error or omission.”44 Defendants aver that Plaintiff had at least
constructive knowledge when it received a copy of the Policy and so it does not matter when
Plaintiff actually discovered the error.45 Defendants further contend that Kronlage is a licensed
and barred attorney who “should have known to review the policy language to ensure that [the
Arbitration Clause] had been removed.”46
Second, Defendants argue that the Court may consider the signed Policy that Defendants
attach to the instant motion but not Kronlage’s affidavit attached to Plaintiff’s opposition47 because
it “is clearly incorporated by reference into Plaintiff’s petition.”48

42 Id.
43 Id.
44 Rec. Doc. 19 at 2.
45 Id.
46 Id. at 2–3.
47 See id. at 3–4.
48 Id.
Third, Defendants argue that the motion is not premature because “either [Plaintiff] has
submitted facts to survive this Motion to Dismiss or it has not.”49 Defendants assert that the fact
that Plaintiff “concedes [it] require[s] more discovery. . . [highlights] the weakness of Plaintiff’s
case and suggests that . . . Plaintiff has not conducted appropriate due diligence to confirm” that
its claims are viable.50

D. Plaintiff’s Arguments in Further Opposition to the Motion to Dismiss
In the sur-reply brief, Plaintiff argues that Defendants’ reply brief “misinterprets the facts
and confuses the issues.”51 Plaintiff asserts that it received the Policy and instructed Gremillion to
remove the Arbitration Clause before Hurricane Ida and Gremillion responded that he would
follow these instructions.52 Plaintiff contends that it did not learn the Arbitration Clause remained
in the Policy until after it filed the Insurance Action.53 Thus, Plaintiff concludes that its claims are
not time-barred.54
III. Legal Standard
Federal Rule of Civil Procedure 12(b)(6) provides that an action may be dismissed “for
failure to state a claim upon which relief can be granted.”55 A motion to dismiss for failure to state

49 Id. at 5.
50 Id.
51 Rec. Doc. 21 at 1.
52 Id.
53 Id. at 1–2.
54 Id. at 2. Plaintiff also states that “Defendants are attempting to use procedure to prevent Plaintiff from
obtaining [] Gremillion’s deposition despite its relevance” to the peremption issue. Id.
55 Fed. R. Civ. P. 12(b)(6).
a claim is “viewed with disfavor and is rarely granted.”56 “To survive a motion to dismiss, a
complaint must contain sufficient factual matter, accepted as true, to ‘state a claim for relief that
is plausible on its face.’”57 “Factual allegations must be enough to raise a right to relief above the
speculative level.”58 A claim is facially plausible when the plaintiff has pleaded facts that allow
the court to “draw a reasonable inference that the defendant is liable for the misconduct alleged.”59

On a motion to dismiss, asserted claims are liberally construed in favor of the claimant,
and all facts pleaded are taken as true.60 However, although required to accept all “well-pleaded
facts” as true, a court is not required to accept legal conclusions as true.61 “While legal conclusions
can provide the framework of a complaint, they must be supported by factual allegations.”62
Similarly, “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory
statements” will not suffice.63 The complaint need not contain detailed factual allegations, but it
must offer more than mere labels, legal conclusions, or formulaic recitations of the elements of a
cause of action.64 That is, the complaint must offer more than an “unadorned, the defendant-

56 Kaiser Aluminum & Chem. Sales, Inc. v. Avondale Shipyards, Inc., 677 F.2d 1045, 1050 (5th Cir. 1982).
57 Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2008)).
58 Twombly, 550 U.S. at 556.
59 Id. at 570.
60 Leatherman v. Tarrant Cnty. Narcotics Intelligence & Coordination Unit, 507 U.S. 163, 164 (1993); see
also Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322–23 (2007).
61 Iqbal, 556 U.S. at 677–78.
62 Id. at 679.
63 Id. at 678.
64 Id.
unlawfully-harmed-me accusation.”65 From the face of the complaint, there must be enough
factual matter to raise a reasonable expectation that discovery will reveal evidence as to each
element of the asserted claims.66 If factual allegations are insufficient to raise a right to relief above
the speculative level, or if it is apparent from the face of the complaint that there is an “insuperable”
bar to relief, the claim must be dismissed.67

IV. Analysis
In the instant motion, Defendants argue that Plaintiff’s claims should be dismissed because
they are perempted pursuant to Louisiana Revised Statute § 9:5606.68 Specifically, Defendants
assert that the claims are perempted because Plaintiff was aware of the Arbitration Clause upon
receiving a copy of the Policy in June 2021 but did not file the instant lawsuit until August 22,
2022.69 Plaintiff argues that its claims are not perempted because they are based on Defendants’
failure to remove the Arbitration Clause and so the peremption clock did not start until Plaintiff
realized this failure well after Hurricane Ida.70
In relevant part, Louisiana Revised Statute § 9:5606(A) states:

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 jurisdiction and proper venue within
one year from the date of the alleged act, omission, or neglect, or within one year

65 Id.
66 Lormand v. U.S. Unwired, Inc., 565 F.3d 228, 257 (5th Cir. 2009).
67 Carbe v. Lappin, 492 F.3d 325, 328 n.9 (5th Cir. 2007); Moore v. Metro. Human Serv. Dep’t, No. 09-
6470, 2010 WL 1462224, at * 2 (E.D. La. Apr. 8, 2010) (Vance, J.) (citing Jones v. Bock, 549 U.S. 199, 215
(2007)).
68 See Rec. Doc. 11-1 at 6.
69 Id.
70 See Rec. Doc. 14 at 4–5.
from the date that the alleged act, omission, or neglect is discovered or should have
been discovered.

Plaintiff filed the Petition in Louisiana state court on August 22, 2022. Thus, Section 9:5606(A)
perempts any claims against Defendants that Plaintiff discovered or should have discovered before
August 22, 2021.
Defendants argue that the claims are perempted because Plaintiff admits in the Petition that
it was aware of the Arbitration Clause in June 2021.71 However, this argument mischaracterizes
the nature of Plaintiff’s claims against Defendants. The Petition clearly states that Kronlage called
Gremillion “[d]uring the first week of June 2021” and told him that the Arbitration Clause “in the
policy form that was sent to him was not acceptable.”72 The Petition further alleges that Gremillion
told Kronlage that he “would have the Arbitration [Clause] removed” and it was only after Plaintiff
submitted its Hurricane Ida claims to the insurer that it learned that Defendants “did not fix the
policy.”73 Plaintiff’s claims are not based on the initial inclusion of the Arbitration Clause, which
Plaintiff discovered in June 2021, but on Defendants’ failure to remove the Arbitration Clause
upon receiving Kronlage’s instructions. Therefore, because Plaintiff alleges that it did not learn of
this failure until after August 22, 2022, the Petition alleges facts suggesting that Plaintiff filed the
case within one year of its actual discovery of Defendants’ conduct.
However, the peremption clock is also triggered where Plaintiff had “constructive
knowledge” of its claims. The Louisiana Supreme Court has explained that “[c]onstructive

knowledge is whatever notice is enough to excite attention and put the injured party on guard and

71 Rec. Doc. 11-1 at 8.
72 Rec. Doc. 11-3 at 2.
73 Id.
call for inquiry.”74 “[A] plaintiff’s mere apprehension that something may be wrong is insufficient
to commence the running of [peremption] unless the plaintiff knew or should have known [about
the claim] through the exercise of reasonable diligence.”75 Defendants argue that Plaintiff had
constructive knowledge of the claims upon receiving the Policy in June because Plaintiff is
presumed to have knowledge of the contents of the Policy upon receipt.76

The Court finds this argument unavailing. Although Defendants are correct that “Louisiana
law imposes a duty on the insured to read and know his or her insurance policy provisions,”
Plaintiff’s knowledge of the contents of the Policy as provided in June 2021 is not at issue. 77
Plaintiff alleges that Kronlage, as Plaintiff’s corporate representative, read the Policy, knew that
the Policy contained the Arbitration Clause, asked Gremillion to take corrective action, and was
told by Gremillion that the Arbitration Clause would be removed.78 Thus, at issue is whether
Plaintiff should have known prior to August 22, 2021, that Defendants failed to take corrective
action. Accepting these allegations as true, as the Court must on a Rule 12(b)(6) motion to dismiss,
it is plausible that Plaintiff reasonably believed that the Arbitration Clause was removed up until
it had to submit a claim under the Policy after Hurricane Ida.79 Where a statute-of-limitation

defense is raised on a Rule 12(b)(6) motion, the Fifth Circuit in Jamil Abdul-Alim Alim v. Universal

74 Campo v. Correa, 828 So.2d 502, 510–11 (La. 2002); see also Campbell v. Stone Ins., Inc., 509 F.3d 665,
672 (5th Cir. 2007) (applying the standard for constructive knowledge outlined by the Louisiana Supreme Court in
Campo to peremption pursuant to La. Rev. Stat. § 9:5606).
75 Id. at 511.
76 Rec. Doc. 11-1 at 8.
77 Campbell, 509 F.3d at 672.
78 Rec. Doc. 11-3 at 1–2.
79 The Court notes that it is skeptical that Plaintiff was reasonable in believing that the Arbitration Clause
could be removed from the signed Policy without any further action by Plaintiff; however, the Court finds that it is
premature to resolve the issue of Plaintiff’s reasonableness at this stage.
Life Insurance Company instructs that dismissal is improper if a question of fact “not normally
ascertainable from the pleadings,” such as “reasonableness,” is at issue.*° Accordingly, the Court
will not dismiss Plaintiff's claims based on peremption at this time.
¥. Conclusion
For the foregoing reasons, the instant Rule 12(b)(6) motion to dismiss is denied because it
is conceivable, based on the facts alleged in the Petition, that Plaintiff's claims are not perempted.
Accordingly,
IT IS HEREBY ORDERED that Defendants’ “Motion to Dismiss Pursuant to Rule
12(b)(6)*! is DENIED.
_ 15th
NEW ORLEANS, LOUISIANA, this day of February, 2023.

Meant ile BROWN
CHIEF JUDGE
UNITED STATES DISTRICT COURT

80 706 F.2d 638, 641 (5th Cir.1983) (reversing the district court's order dismissing plaintiffs claims where
the prescription issue depended on whether a “reasonable” period of time for performance of the contract at issue had
elapsed and noting that “[a] court should be extremely reluctant to grant a motion to dismiss on a ground that requires
a determination of ... facts that are not normally ascertainable from the pleadings.”).
81 Rec. Doe. 11.

13

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10188962. Public record. Not legal advice.