CYNTHIA BRYAN, AUBRY * NO. 2024-C-0694 BRYAN, JR., AUNYA BRYAN, AND GLENDA BRYAN * COURT OF APPEAL
VERSUS * FOURTH CIRCUIT
LOUISIANA CITIZENS * STATE OF LOUISIANA PROPERTY INSURANCE CORPORATION AS THE * GUARANTOR OF THE INSOLVENT INSURANCE * COMPANY, SOUTHERN ******* FIDELITY INSURANCE COMPANY
NEK ERVIN-KNOTT, J., DISSENTS AND ASSIGNS REASONS
I respectfully dissent from the Majority’s decision to deny LIGA’s writ
application. I would grant LIGA’s writ application and find that Plaintiff’s suit is
prescribed. To hold otherwise allows for insureds to bring forth stale suits long
after their claims under their insurer’s policies have prescribed. In its opinion, the
Majority only addresses one of the issues raised by LIGA in its writ application.1
As this case involves a multi-faceted issue, I find it necessary to address all the
assigned errors to conclude that Plaintiffs’ suit is prescribed.
Prescription is a legal concept that bars the institution of suits “as a result of
inaction for a period of time.” La. C.C. art. 3447. “Prescription begins to run from
the date of loss.” Crescent City Prop. Redevelopment Assocs., LLC v. S. Fid. Ins.,
Inc., 2014-0862, p. 5 (La. App. 4 Cir. 12/17/14), 158 So. 3d 100, 103 (first citing
La. C.C. art. 3454; and then citing Lila, Inc. v. Underwriters at Lloyd’s, London,
2008-0681, p. 4 (La App. 4 Cir. 9/10/08), 994 So. 2d 139, 142). At the outset, I
note that Plaintiffs’ petition is prescribed on its face. Hurricane Ida damaged their
1 In its writ application, LIGA raised the following issues:
(1)Whether a two-year or ten-year prescriptive period applied to Plaintiffs’ claim against LIGA; (2) Whether Southern Fidelity’s order of insolvency interrupted prescription against LIGA; (3) Whether Southern Fidelity’s partial tender interrupted prescription against LIGA; and (4) Whether Plaintiffs’ amended petition related back to their original petition for damage, such that prescription was interrupted against LIGA.
1 property on August 29, 2021, and Plaintiffs did not add LIGA to this suit until
October 23, 2023, over two years after the loss occurred.
Preliminarily, I agree with the Majority that a two-year prescriptive period
applies to Plaintiffs’ claim in this case. Very recent jurisprudence affirms that
claims involving hurricane damage are subject to a two-year prescriptive period
commencing from the date of loss as provided for under La. R.S. 22:868. Green v.
Maison Ins. Co., 2024-297, pp. 2-3 (La. App. 5 Cir. 9/4/24), 398 So. 3d 231, 234
(citing La. R.S. 22:868); Ardoin v. Certain Underwriters at Lloyd’s of London,
2023-719, p. 11 (La. App. 3 Cir. 4/3/24), 387 So. 3d 676, 683 (citing Phyllis
Wilson v. La. Citizens Prop., 2023-1320 (La. 1/10/2024), 375 So. 3d 961). Further,
LIGA is limited by statute to only provide coverage for “covered claims” as
provided by La. R.S. 22:2055(6). Green, 2024-297, p. 4, 398 So. 3d at 234; see
also La. R.S. 22:2052. A covered claim is an unpaid claim arising out of and is
within the coverage of an insolvent insurer’s policy. La. R.S.
22:2055(6)(a)(emphasis added). Thus, as set forth by statute, a covered claim
comes from the policy of the insolvent insured and that policy dictates the terms of
the claim’s coverage. In this case, Southern Fidelity’s policy dictated a two-year
prescriptive period from the date of loss to bring a claim. Therefore, I agree that a
two-year prescriptive period applies to Plaintiffs’ claim.
Nevertheless, the Majority’s opinion solely focuses on the issue of whether
Southern Fidelity’s order of insolvency interrupted the tolling of prescription
against LIGA. The Majority finds that Plaintiffs’ cause of action did not arise until
Southern Fidelity went insolvent and, thus, prescription was interrupted. I disagree.
Prescription may be interrupted by the filing of a lawsuit or by an
acknowledgment by the defendant. La. C.C. arts. 3462, 3464. Neither of these
situations occurred here. Plaintiffs’ claim began to accrue from the date of loss,
and they failed to file suit against either Southern Fidelity or LIGA for a claim
2 under their policy within the applicable prescriptive period. The stay order issued
against Southern Fidelity provides that it prohibits “[t]he commencement or
continuation of judicial, administrative, or other action or proceeding against the
insurer or against its assets or any part thereof . . . .” (Emphasis added). The plain
language of the stay order makes clear that it only applied to actions against
Southern Fidelity. Plaintiffs failed to show how they were prevented from filing
suit against LIGA. Thus, I find Plaintiffs’ claim for damages arising under their
policy is prescribed.
In reaching its conclusion that prescription was interrupted by the insolvency
order, the Majority relies on Rey v. Guidry, 618 So. 2d 425 (La. App. 5th Cir.
1993). However, Rey is inapplicable to this case. Rey focused on whether new
amendments to the statutes governing LIGA applied retroactively such that the
plaintiff had to exhaust coverage under his UM insurer before proceeding against
LIGA. Rey, 618 So. 2d at 427. In reaching its determination, the Fifth Circuit
found that liability against LIGA is determined as of the date of the member
insurer’s insolvency, such that a plaintiff’s recovery against the entity is dictated
by the statute in effect at the time of insolvency. Id. I agree that LIGA’s liability is
dictated by statute. However, as already discussed herein, the relevant statute
provides that LIGA’s liability is dictated by the terms of the insolvent insurer’s
policy, and Southern Fidelity’s policy gave the Plaintiffs a two-year prescriptive
period to file suit for a claim under that policy. See La. R.S. 22:2055(6). Notably,
in Rey, the plaintiff had timely filed suit against his general liability insurer and
amended his suit to include LIGA after his general liability insurer became
insolvent. Rey, 618 So. 2d at 426.
Additionally, the Majority notes in its opinion that it declines to follow the
ruling of the Fifth Circuit in Green v. Maison Ins. Co. on the basis that the case did
not consider whether an insolvency order interrupted the prescriptive period
3 against LIGA. 2024-297, 398 So. 3d 231. Yet, there is jurisprudence supporting the
conclusion that an insolvency order does not interrupt prescription against LIGA.
Specifically, in Castaneda v. Louisiana Ins. Guaranty Ass’n, the Louisiana Fifth
Circuit held that an insolvency order that issued an injunction against all
proceedings involving an insolvent insured did not suspend prescription against
LIGA. 1995-29, p. 4 (La. App. 5 Cir. 5/30/95), 657 So. 2d 338, 340-41, writ denied
1995-2097 (La. 11/17/95), 663 So. 2d 715. In White v. Haydel, the Louisiana First
Circuit held that a stay order did not prevent a plaintiff from filing suit against
LIGA. 593 So. 2d 421, 422 (La. App. 1st Cir. 1991). Furthermore, the Fourth
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CYNTHIA BRYAN, AUBRY * NO. 2024-C-0694 BRYAN, JR., AUNYA BRYAN, AND GLENDA BRYAN * COURT OF APPEAL
VERSUS * FOURTH CIRCUIT
LOUISIANA CITIZENS * STATE OF LOUISIANA PROPERTY INSURANCE CORPORATION AS THE * GUARANTOR OF THE INSOLVENT INSURANCE * COMPANY, SOUTHERN ******* FIDELITY INSURANCE COMPANY
NEK ERVIN-KNOTT, J., DISSENTS AND ASSIGNS REASONS
I respectfully dissent from the Majority’s decision to deny LIGA’s writ
application. I would grant LIGA’s writ application and find that Plaintiff’s suit is
prescribed. To hold otherwise allows for insureds to bring forth stale suits long
after their claims under their insurer’s policies have prescribed. In its opinion, the
Majority only addresses one of the issues raised by LIGA in its writ application.1
As this case involves a multi-faceted issue, I find it necessary to address all the
assigned errors to conclude that Plaintiffs’ suit is prescribed.
Prescription is a legal concept that bars the institution of suits “as a result of
inaction for a period of time.” La. C.C. art. 3447. “Prescription begins to run from
the date of loss.” Crescent City Prop. Redevelopment Assocs., LLC v. S. Fid. Ins.,
Inc., 2014-0862, p. 5 (La. App. 4 Cir. 12/17/14), 158 So. 3d 100, 103 (first citing
La. C.C. art. 3454; and then citing Lila, Inc. v. Underwriters at Lloyd’s, London,
2008-0681, p. 4 (La App. 4 Cir. 9/10/08), 994 So. 2d 139, 142). At the outset, I
note that Plaintiffs’ petition is prescribed on its face. Hurricane Ida damaged their
1 In its writ application, LIGA raised the following issues:
(1)Whether a two-year or ten-year prescriptive period applied to Plaintiffs’ claim against LIGA; (2) Whether Southern Fidelity’s order of insolvency interrupted prescription against LIGA; (3) Whether Southern Fidelity’s partial tender interrupted prescription against LIGA; and (4) Whether Plaintiffs’ amended petition related back to their original petition for damage, such that prescription was interrupted against LIGA.
1 property on August 29, 2021, and Plaintiffs did not add LIGA to this suit until
October 23, 2023, over two years after the loss occurred.
Preliminarily, I agree with the Majority that a two-year prescriptive period
applies to Plaintiffs’ claim in this case. Very recent jurisprudence affirms that
claims involving hurricane damage are subject to a two-year prescriptive period
commencing from the date of loss as provided for under La. R.S. 22:868. Green v.
Maison Ins. Co., 2024-297, pp. 2-3 (La. App. 5 Cir. 9/4/24), 398 So. 3d 231, 234
(citing La. R.S. 22:868); Ardoin v. Certain Underwriters at Lloyd’s of London,
2023-719, p. 11 (La. App. 3 Cir. 4/3/24), 387 So. 3d 676, 683 (citing Phyllis
Wilson v. La. Citizens Prop., 2023-1320 (La. 1/10/2024), 375 So. 3d 961). Further,
LIGA is limited by statute to only provide coverage for “covered claims” as
provided by La. R.S. 22:2055(6). Green, 2024-297, p. 4, 398 So. 3d at 234; see
also La. R.S. 22:2052. A covered claim is an unpaid claim arising out of and is
within the coverage of an insolvent insurer’s policy. La. R.S.
22:2055(6)(a)(emphasis added). Thus, as set forth by statute, a covered claim
comes from the policy of the insolvent insured and that policy dictates the terms of
the claim’s coverage. In this case, Southern Fidelity’s policy dictated a two-year
prescriptive period from the date of loss to bring a claim. Therefore, I agree that a
two-year prescriptive period applies to Plaintiffs’ claim.
Nevertheless, the Majority’s opinion solely focuses on the issue of whether
Southern Fidelity’s order of insolvency interrupted the tolling of prescription
against LIGA. The Majority finds that Plaintiffs’ cause of action did not arise until
Southern Fidelity went insolvent and, thus, prescription was interrupted. I disagree.
Prescription may be interrupted by the filing of a lawsuit or by an
acknowledgment by the defendant. La. C.C. arts. 3462, 3464. Neither of these
situations occurred here. Plaintiffs’ claim began to accrue from the date of loss,
and they failed to file suit against either Southern Fidelity or LIGA for a claim
2 under their policy within the applicable prescriptive period. The stay order issued
against Southern Fidelity provides that it prohibits “[t]he commencement or
continuation of judicial, administrative, or other action or proceeding against the
insurer or against its assets or any part thereof . . . .” (Emphasis added). The plain
language of the stay order makes clear that it only applied to actions against
Southern Fidelity. Plaintiffs failed to show how they were prevented from filing
suit against LIGA. Thus, I find Plaintiffs’ claim for damages arising under their
policy is prescribed.
In reaching its conclusion that prescription was interrupted by the insolvency
order, the Majority relies on Rey v. Guidry, 618 So. 2d 425 (La. App. 5th Cir.
1993). However, Rey is inapplicable to this case. Rey focused on whether new
amendments to the statutes governing LIGA applied retroactively such that the
plaintiff had to exhaust coverage under his UM insurer before proceeding against
LIGA. Rey, 618 So. 2d at 427. In reaching its determination, the Fifth Circuit
found that liability against LIGA is determined as of the date of the member
insurer’s insolvency, such that a plaintiff’s recovery against the entity is dictated
by the statute in effect at the time of insolvency. Id. I agree that LIGA’s liability is
dictated by statute. However, as already discussed herein, the relevant statute
provides that LIGA’s liability is dictated by the terms of the insolvent insurer’s
policy, and Southern Fidelity’s policy gave the Plaintiffs a two-year prescriptive
period to file suit for a claim under that policy. See La. R.S. 22:2055(6). Notably,
in Rey, the plaintiff had timely filed suit against his general liability insurer and
amended his suit to include LIGA after his general liability insurer became
insolvent. Rey, 618 So. 2d at 426.
Additionally, the Majority notes in its opinion that it declines to follow the
ruling of the Fifth Circuit in Green v. Maison Ins. Co. on the basis that the case did
not consider whether an insolvency order interrupted the prescriptive period
3 against LIGA. 2024-297, 398 So. 3d 231. Yet, there is jurisprudence supporting the
conclusion that an insolvency order does not interrupt prescription against LIGA.
Specifically, in Castaneda v. Louisiana Ins. Guaranty Ass’n, the Louisiana Fifth
Circuit held that an insolvency order that issued an injunction against all
proceedings involving an insolvent insured did not suspend prescription against
LIGA. 1995-29, p. 4 (La. App. 5 Cir. 5/30/95), 657 So. 2d 338, 340-41, writ denied
1995-2097 (La. 11/17/95), 663 So. 2d 715. In White v. Haydel, the Louisiana First
Circuit held that a stay order did not prevent a plaintiff from filing suit against
LIGA. 593 So. 2d 421, 422 (La. App. 1st Cir. 1991). Furthermore, the Fourth
Circuit has recognized that “court issued stays do not suspend prescription, prevent
the filing of a lawsuit, or implicate the doctrine of contra non valentem.” Doe v.
La. Bd. Of Ethics, 2012-1169, p. 14 (La. Ap. 4 Cir. 3/13/13), 112 So. 3d 339, 347,
n. 9 (citations omitted). I note that the facts in the Green case are similar to the
ones before this Court—namely, an insured filed a stale claim against LIGA over
two years after Hurricane Ida and almost a year after its original insurer had been
declared insolvent.
Moreover, the Majority opines that the Plaintiffs’ case against LIGA may
have been unfairly barred if Southern Fidelity had been declared insolvent on
August 28, 2023, just one day prior to the end of the original prescriptive period
against Southern Fidelity. The Majority overlooks the fact that Plaintiffs still had
not filed suit against their insurer in that hypothetical scenario, which meant
Plaintiffs only had a day left to seek recourse against their original insurer as well.
Once that one day had passed, any claim under the policy would have been
extinguished regardless of whether the Plaintiffs decided to file against their
original insurer or LIGA. Plaintiffs echo a similar hypothetical in their
memorandum. However, the hypothetical advanced by the Plaintiffs and the
Majority never came to pass. The Majority’s and the Plaintiffs’ argument fails in
4 light of the fact the Plaintiffs were aware of Southern Fidelity’s insolvency and had
sufficient time to file suit against LIGA prior to the prescriptive period lapsing.
Southern Fidelity was declared insolvent on June 15, 2022—one year, two months,
and fourteen days prior to the prescriptive deadline to file suit. Therefore, for the
above stated reasons, I find that the insolvency order did not interrupt prescription
Due to its determination that prescription was interrupted by the insolvency
order, the Majority’s opinion does not address the issue of whether South Fidelity’s
partial tender interrupted prescription. However, as this issue is relevant to the
ultimate outcome, I will address it here.
This Circuit is rife with jurisprudence holding that an insurer’s partial tender
related to a first-party property damage claim does not constitute an
acknowledgement and does not interrupt prescription.2 To support their argument
against prescription, Plaintiffs rely on the holding in Demma, wherein the
Louisiana Supreme Court found that an unconditional payment made pursuant to
an uninsured/underinsured motorist insurance policy constituted an
acknowledgment sufficient to interrupt prescription. Demma v. Auto. Club Inter-
Ins. Exch., 2008-2810, p. 1 (La. 6/26/09), 15 So. 3d 95, 96-97. The Fourth Circuit
jurisprudence holds that Demma does not apply in this context. Shortly after the
Louisiana Supreme Court’s decision in Demma, the Fourth Circuit upheld its long-
standing jurisprudence that “an unconditional tender does not interrupt prescription
on a first party claim.” La. Joint Underwriters, 2009-0336, p. 4, 20 So. 3d at 531
(citation omitted) (“Because this is a first party suit for breach of an insurance
contract . . . prior payments do not interrupt prescription.”). Notably, the Louisiana
Supreme Court denied the writ application on that issue. La. Joint Underwriters,
2 E.g., Crescent City, 2014-0862, 158 So. 3d 100; see also Wolfe World, LLC v. Stumpf, 2010-0209 (La. App. 4 Cir. 7/7/10), 43 So. 3d 311, writ denied 2010-1834 (La. 10/29/10), 48 So. 3d 1092; see also La. Joint Underwriters of Audubon Ins. Co. v. Johnson, 2009-0336 (La. App. 4 Cir. 9/2/09), 20 So. 3d 528, writ denied 2009-2611 (La. 2/5/10), 27 So. 3d 306; see also Lila, 2008-0681, 994 So. 2d 139. 5 2009-2611, 27 So. 3d 306. Thereafter, the Fourth Circuit specifically held that the
Demma rationale did not apply to first party claims against a homeowner’s
insurance policy. See Wolfe World, 2010-0209, p. 8, 43 So. 3d at 316 (“[T]here is a
difference between the nature of the claim involved herein and that involved in
Demma. This case involves an insured's first-party claim against his homeowner’s
insurer.”). Again, the Louisiana Supreme Court denied the writ application on that
issue. Wolfe World, 2010-1834, 48 So. 3d 1092.
In the matter herein, Plaintiffs are making a first party claim against their
homeowner’s insurance policy. Nothing in this case suggests that Southern
Fidelity’s tender constituted an acknowledgment sufficient to interrupt
prescription. As such, in accordance with this Circuit’s jurisprudence, I find that
Demma does not apply to the facts of this case.
Finally, the last issue raised by the parties that needs to be addressed is
whether the Plaintiffs’ amended petition related back to their original petition. An
amended petition adding or substituting a defendant may relate back to the filing of
the date of the original petition. See La. C.C.P. art. 1153; see also Carter v. Pointe
Coupee Par. Sch. Bd., 2018-1035, p. 4 (La. App. 1 Cir. 12/21/18), 268 So. 3d
1064, 1068 (noting that La. C.C. art. 1153 applies to claims but not to parties). In
determining whether an amendment should relate back, one of the factors that
should be considered is whether the substituted defendant is a wholly new or
unrelated defendant. Ray v. Alexandria Mall, 434 So. 2d 1083, 1087 (La. 1983).
An amended defendant is not “wholly new or unrelated” if there is an
identity of interests between him and the improperly named defendant. See Hardy
v. A+ Rental Inc., 1995-2176, p. 3 (La. App. 4 Cir. 5/8/96), 674 So. 2d 1155, 1157
(citing Findley v. City of Baton Rouge, 570 So. 2d 1168, 1171 (La. 1990)). This
identity of interests depends on the relationship between the parties in their
business operations and other activities. Id. The relationship between the parties
6 “must be of such a close nature that there is an inference of notice.” Taylor-Haynes
v. Tropicana Ent. LLC, 2023-0558, p. 8 (La. App. 1 Cir. 11/15/23), 379 So. 3d
688, 695 (citation omitted). If such a close relationship exists, the court will
consider the institution of suit against one to provide notice of litigation to the
other. Id.
In this case, I do not find an identity of interests between Louisiana Citizens
and LIGA. Louisiana Citizens is a last resort insurance company tasked with
providing policies to Louisiana residents who are unable to procure insurance
elsewhere. On the other hand, LIGA is not an insurance company issuing policies.
Rather, it is an association created by statute that is mandated to pay certain
covered claims if one of its members becomes insolvent. As such, I cannot infer
that LIGA received notice of Plaintiffs’ action when they named Louisiana
Citizens, a wholly different entity, as the defendant in their case.
For all of the foregoing reasons, I would grant LIGA’s writ application,
reverse the judgment of the district court, and find that Plaintiffs’ suit is prescribed.