MARTHA GREEN, GEORGE GREEN, AND NO. 24-C-297 THE ESTATE OF MARTHA GREEN FIFTH CIRCUIT VERSUS COURT OF APPEAL MAISON INSURANCE COMPANY AND LOUISIANA INSURANCE GUARANTY STATE OF LOUISIANA ASSOCIATION
ON APPLICATION FOR SUPERVISORY REVIEW FROM THE FORTIETH JUDICIAL DISTRICT COURT PARISH OF ST. JOHN THE BAPTIST, STATE OF LOUISIANA NO. 80,620, DIVISION "A" HONORABLE VERCELL FIFFIE, JUDGE PRESIDING
September 04, 2024
JOHN J. MOLAISON, JR. JUDGE
Panel composed of Judges Stephen J. Windhorst, John J. Molaison, Jr., and Amanda L. Calogero, Pro Tempore
WRIT GRANTED; JUDGMENT DENYING EXCEPTION OF PRESCRIPTION REVERSED; EXCEPTION OF PRESCRIPTION GRANTED; PETITION DISMISSED WITH PREJUDICE JJM SJW ALC COUNSEL FOR PLAINTIFF/RESPONDENT, MARTHA GREEN, ET AL Zachary Delerno Charles L. Gowland, Jr.
COUNSEL FOR DEFENDANT/RELATOR, LOUISIANA INSURANCE GUARANTY ASSOCIATION Sidney W. Degan, III Genevieve K. Jacques Paul R. Wegmann Alina Pagani Travis L. Bourgeois Candace C. Chauvin MOLAISON, J.
The relator, Louisiana Insurance Guaranty Association (“LIGA”), seeks a
review of the April 30, 2024 judgment that denied its Exception of Prescription.
For the following reasons, we grant this writ application, reverse the trial court
ruling, grant the exception of prescription, and dismiss the plaintiffs’ petition with
prejudice.
Law and Discussion
On August 28, 2023, the plaintiffs, Martha Green, George Green, and the
estate of Martha Green (“the Greens”), filed a petition for damages against Maison
Insurance Company (“Maison”). The petition alleged that Maison provided
property insurance to their property and that their property sustained damage
caused by Hurricane Ida. On November 21, 2023, the Greens filed a First
Amended Petition for Damages, adding LIGA as a defendant.
LIGA answered the petition and filed an exception for prescription, among
other things. The trial court denied the exception after the April 30, 2024 hearing.
An exception of prescription is a type of peremptory exception. The
function of the peremptory exception is to have the plaintiff’s action declared
legally nonexistent or barred by the effect of law; this exception tends to dismiss or
defeat the action. Ruffins v. HAZA Foods of Louisiana, LLC, 21-619 (La. App. 5
Cir. 5/25/22), 341 So.3d 1259, 1262. The party asserting an exception of
prescription has the burden of proof; however, where the petition shows on its face
that it is prescribed, the burden shifts to the opposing party to prove the
prescriptive period has been interrupted or suspended. McClellan v. Premier
Nissan, L.L.C., 14-726 (La. App. 5 Cir. 2/11/15), 167 So.3d 934, 935. The
standard of review of a trial court’s ruling on a peremptory exception of
prescription is determined by whether evidence is introduced. Wells Fargo
Financial Louisiana, Inc. v. Galloway, 17-0413 (La. App. 4 Cir. 11/15/17), 231
24-C-297 1 So.3d 793, 800. If evidence is not introduced, appellate courts review judgments
sustaining an exception of prescription de novo. DeFelice v. Federated Nat’l Ins.
Co., 18-374 (La. App. 5 Cir. 7/9/19), 279 So.3d 422, 426. However, when
evidence is introduced at a hearing on an exception of prescription, the trial court’s
findings of fact are reviewed under the manifest error standard. Id.
The transcript of the hearing on the exception of prescription is included in
this writ application. The transcript indicates that evidence was not introduced at
the hearing, so we will review this matter de novo.
Hurricane Ida made landfall in Louisiana on August 29, 2021. The deadline
for filing all lawsuits for damage caused by Hurricane Ida was August 29, 2023.
La. R.S. 22:868. The Greens filed a Petition for Damages against Maison on
August 28, 2023. Maison was declared insolvent on September 27, 2022.1 The
original petition filed by the Greens does not mention Maison’s insolvency or
LIGA. This petition was served on Maison through the Louisiana Secretary of
State. The Greens did not request that LIGA or Maison’s receiver be served.
The Greens filed a First Amended Petition for Damages naming LIGA as an
additional defendant on November 21, 2023. Service of the First Amended
Petition for Damages was requested on LIGA through its registered agent. Service
of the original petition was not requested on LIGA.
Generally, according to La. C.C.P. articles 3462 and 3464, prescription is
interrupted by filing a suit or acknowledgment. Prescription runs against all
persons unless there is a legislative exception. La. C.C.P. art. 3467. The failure to
file suit on time bars the action. La. C.C. art. 3447.
The prescriptive period for a property owner to file a suit against its property
insurer for property damage arising from a named storm under a Louisiana
1 On August 11, 2022, Maison merged with FedNat Insurance Company and on September 27, 2022, pursuant to an order issued by the Second Judicial Circuit Court for Leon County, Florida, FedNat was declared insolvent. Chatman v. Maison Ins. Co., 22-01055, 2024 WL 347889, (M.D. La. Jan. 30, 2024).
24-C-297 2 insurance policy is two years. La. R.S. 22:868. No legislative exception exists to
the prescriptive period in suits against an insolvent insurer. La. R.S. 22:2068,
which requires an automatic stay of 180 days in proceedings against insolvent
insurers, is not a prohibition on filing a suit but rather a stay of certain proceedings.
It does not interrupt or suspend prescription against an insolvent insurer. Grelle v.
Youngblood, 94-397 (La. App. 4 Cir. 4/14/94) 635 So.2d 1291, 1292.
The First Amended Petition for Damages filed against LIGA is prescribed
on its face. Hence, the Greens have the burden of proving that prescription was
interrupted or suspended. The Greens argued that the timely original petition
against Maison relates back to the First Amended Petition for Damages filed
against LIGA.
The Greens’ original petition was filed against Maison, which had been
declared insolvent. Maison ceased to exist upon entry of the Order of Liquidation
on September 27, 2022, almost a year before the filing of the original petition. See
Tyburczy v. Graham, 91-1978, 1994 WL 150724, (E.D. La. Mar. 30, 1994)
(“When an insurer such as Alliance becomes insolvent, it ceases to exist, and the
liquidator or receiver becomes its legal successor, not LIGA.”). La. C.C.P. art.
740. See also Stephanie Laborde, et al., The DEF’s of LIGA: An Update to the
ABC’s of LIGA, 77 La. L. Rev. 997 (2017), at 1001 (“When a court of competent
jurisdiction declares an insurer insolvent, the insurer effectively ceases to exist. A
new entity arises – the insurer in liquidation or receivership. This new entity, rather
than LIGA, is the insolvent insurer’s legal successor.”) Hence, prescription was
not interrupted by filing a suit against the nonexistent defendant, Maison. In
addition, service of the original petition was not requested upon LIGA or the
receiver.
Because an insolvent insurer no longer exists, it cannot be a solidary obligor
with LIGA. See, Tyburczy, supra. Thus, LIGA is not a solidary obligor of
24-C-297 3 Maison. LIGA is an entity created by the legislature with specific statutory
mandates; claims against LIGA are limited to “covered claims” under La. R.S.
22:2055(6). Any claim outside the scope of coverage under the LIGA statutes or
that exceeds the powers and duties of LIGA is not a covered claim. It follows that
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MARTHA GREEN, GEORGE GREEN, AND NO. 24-C-297 THE ESTATE OF MARTHA GREEN FIFTH CIRCUIT VERSUS COURT OF APPEAL MAISON INSURANCE COMPANY AND LOUISIANA INSURANCE GUARANTY STATE OF LOUISIANA ASSOCIATION
ON APPLICATION FOR SUPERVISORY REVIEW FROM THE FORTIETH JUDICIAL DISTRICT COURT PARISH OF ST. JOHN THE BAPTIST, STATE OF LOUISIANA NO. 80,620, DIVISION "A" HONORABLE VERCELL FIFFIE, JUDGE PRESIDING
September 04, 2024
JOHN J. MOLAISON, JR. JUDGE
Panel composed of Judges Stephen J. Windhorst, John J. Molaison, Jr., and Amanda L. Calogero, Pro Tempore
WRIT GRANTED; JUDGMENT DENYING EXCEPTION OF PRESCRIPTION REVERSED; EXCEPTION OF PRESCRIPTION GRANTED; PETITION DISMISSED WITH PREJUDICE JJM SJW ALC COUNSEL FOR PLAINTIFF/RESPONDENT, MARTHA GREEN, ET AL Zachary Delerno Charles L. Gowland, Jr.
COUNSEL FOR DEFENDANT/RELATOR, LOUISIANA INSURANCE GUARANTY ASSOCIATION Sidney W. Degan, III Genevieve K. Jacques Paul R. Wegmann Alina Pagani Travis L. Bourgeois Candace C. Chauvin MOLAISON, J.
The relator, Louisiana Insurance Guaranty Association (“LIGA”), seeks a
review of the April 30, 2024 judgment that denied its Exception of Prescription.
For the following reasons, we grant this writ application, reverse the trial court
ruling, grant the exception of prescription, and dismiss the plaintiffs’ petition with
prejudice.
Law and Discussion
On August 28, 2023, the plaintiffs, Martha Green, George Green, and the
estate of Martha Green (“the Greens”), filed a petition for damages against Maison
Insurance Company (“Maison”). The petition alleged that Maison provided
property insurance to their property and that their property sustained damage
caused by Hurricane Ida. On November 21, 2023, the Greens filed a First
Amended Petition for Damages, adding LIGA as a defendant.
LIGA answered the petition and filed an exception for prescription, among
other things. The trial court denied the exception after the April 30, 2024 hearing.
An exception of prescription is a type of peremptory exception. The
function of the peremptory exception is to have the plaintiff’s action declared
legally nonexistent or barred by the effect of law; this exception tends to dismiss or
defeat the action. Ruffins v. HAZA Foods of Louisiana, LLC, 21-619 (La. App. 5
Cir. 5/25/22), 341 So.3d 1259, 1262. The party asserting an exception of
prescription has the burden of proof; however, where the petition shows on its face
that it is prescribed, the burden shifts to the opposing party to prove the
prescriptive period has been interrupted or suspended. McClellan v. Premier
Nissan, L.L.C., 14-726 (La. App. 5 Cir. 2/11/15), 167 So.3d 934, 935. The
standard of review of a trial court’s ruling on a peremptory exception of
prescription is determined by whether evidence is introduced. Wells Fargo
Financial Louisiana, Inc. v. Galloway, 17-0413 (La. App. 4 Cir. 11/15/17), 231
24-C-297 1 So.3d 793, 800. If evidence is not introduced, appellate courts review judgments
sustaining an exception of prescription de novo. DeFelice v. Federated Nat’l Ins.
Co., 18-374 (La. App. 5 Cir. 7/9/19), 279 So.3d 422, 426. However, when
evidence is introduced at a hearing on an exception of prescription, the trial court’s
findings of fact are reviewed under the manifest error standard. Id.
The transcript of the hearing on the exception of prescription is included in
this writ application. The transcript indicates that evidence was not introduced at
the hearing, so we will review this matter de novo.
Hurricane Ida made landfall in Louisiana on August 29, 2021. The deadline
for filing all lawsuits for damage caused by Hurricane Ida was August 29, 2023.
La. R.S. 22:868. The Greens filed a Petition for Damages against Maison on
August 28, 2023. Maison was declared insolvent on September 27, 2022.1 The
original petition filed by the Greens does not mention Maison’s insolvency or
LIGA. This petition was served on Maison through the Louisiana Secretary of
State. The Greens did not request that LIGA or Maison’s receiver be served.
The Greens filed a First Amended Petition for Damages naming LIGA as an
additional defendant on November 21, 2023. Service of the First Amended
Petition for Damages was requested on LIGA through its registered agent. Service
of the original petition was not requested on LIGA.
Generally, according to La. C.C.P. articles 3462 and 3464, prescription is
interrupted by filing a suit or acknowledgment. Prescription runs against all
persons unless there is a legislative exception. La. C.C.P. art. 3467. The failure to
file suit on time bars the action. La. C.C. art. 3447.
The prescriptive period for a property owner to file a suit against its property
insurer for property damage arising from a named storm under a Louisiana
1 On August 11, 2022, Maison merged with FedNat Insurance Company and on September 27, 2022, pursuant to an order issued by the Second Judicial Circuit Court for Leon County, Florida, FedNat was declared insolvent. Chatman v. Maison Ins. Co., 22-01055, 2024 WL 347889, (M.D. La. Jan. 30, 2024).
24-C-297 2 insurance policy is two years. La. R.S. 22:868. No legislative exception exists to
the prescriptive period in suits against an insolvent insurer. La. R.S. 22:2068,
which requires an automatic stay of 180 days in proceedings against insolvent
insurers, is not a prohibition on filing a suit but rather a stay of certain proceedings.
It does not interrupt or suspend prescription against an insolvent insurer. Grelle v.
Youngblood, 94-397 (La. App. 4 Cir. 4/14/94) 635 So.2d 1291, 1292.
The First Amended Petition for Damages filed against LIGA is prescribed
on its face. Hence, the Greens have the burden of proving that prescription was
interrupted or suspended. The Greens argued that the timely original petition
against Maison relates back to the First Amended Petition for Damages filed
against LIGA.
The Greens’ original petition was filed against Maison, which had been
declared insolvent. Maison ceased to exist upon entry of the Order of Liquidation
on September 27, 2022, almost a year before the filing of the original petition. See
Tyburczy v. Graham, 91-1978, 1994 WL 150724, (E.D. La. Mar. 30, 1994)
(“When an insurer such as Alliance becomes insolvent, it ceases to exist, and the
liquidator or receiver becomes its legal successor, not LIGA.”). La. C.C.P. art.
740. See also Stephanie Laborde, et al., The DEF’s of LIGA: An Update to the
ABC’s of LIGA, 77 La. L. Rev. 997 (2017), at 1001 (“When a court of competent
jurisdiction declares an insurer insolvent, the insurer effectively ceases to exist. A
new entity arises – the insurer in liquidation or receivership. This new entity, rather
than LIGA, is the insolvent insurer’s legal successor.”) Hence, prescription was
not interrupted by filing a suit against the nonexistent defendant, Maison. In
addition, service of the original petition was not requested upon LIGA or the
receiver.
Because an insolvent insurer no longer exists, it cannot be a solidary obligor
with LIGA. See, Tyburczy, supra. Thus, LIGA is not a solidary obligor of
24-C-297 3 Maison. LIGA is an entity created by the legislature with specific statutory
mandates; claims against LIGA are limited to “covered claims” under La. R.S.
22:2055(6). Any claim outside the scope of coverage under the LIGA statutes or
that exceeds the powers and duties of LIGA is not a covered claim. It follows that
coverage for a claim by LIGA exists under the statutory mandate rather than the
terms of the policy. See Laborde, supra, at 1007-09. The Greens’ original Petition
against Maison, filed after Maison was declared insolvent, did not interrupt
prescription against LIGA. The original Petition does not name LIGA as a
defendant or entity. The petition does not allege that their insurer, Maison, is
insolvent. Without service of the original petition on LIGA or its receiver, LIGA
did not have notice of the filing of the original petition.
In opposition, the Greens argued that prescription was interrupted because of
solidary liability between LIGA and the insolvent insurer. However, there is no
legislative exception suspending prescription, nor is there a solidary obligation
between Maison and LIGA. The Greens have the burden of proving solidary
liability. Rizer v. Am. Sur. & Fidelity Ins. Co., 95-1200 (La. 3/8/96), 669 So.2d
387, 388.
A lawsuit timely filed against one solidary obligor interrupts
prescription against other solidary obligors. La. C.C. arts. 1799 and 3503.
However, where no joint or solidary obligation exists, a suit timely filed against
one defendant does not interrupt prescription against other defendants not timely
sued. Renfroe v. State of Louisiana ex rel. Dept. of Transp. and Dev., 01-1646
(La. 2/26/02), 809 So.2d 947, 950.
In the case before us, the suit was filed against Maison on time, but Maison
had ceased to be a legal entity when it was declared insolvent on or around
September 27, 2022. At the time the original petition was filed, there was no
solidary obligation between Maison and LIGA because (1) obligations of the
24-C-297 4 insolvent insurer are assumed by the receiver or liquidator, not LIGA; and (2)
LIGA’s obligations are statutorily created and are not solidary with the insolvent
insurer. There is no legislative exception suspending prescription for suits against
LIGA. Because there is no solidary relationship between Maison and LIGA,
prescription against LIGA was not interrupted by the filing of the original petition.
Conclusion
For the preceding reasons, we grant this writ application and reverse the
April 30, 2024 judgment denying the Exception of Prescription filed by LIGA. We
grant the Exception of Prescription filed by LIGA and dismiss the First Amended
Petition for Damages filed on November 21, 2023 with prejudice.
WRIT GRANTED; JUDGMENT DENYING EXCEPTION OF PRESCRIPTION REVERSED; EXCEPTION OF PRESCRIPTION GRANTED; PETITION DISMISSED WITH PREJUDICE
24-C-297 5 SUSAN M. CHEHARDY CURTIS B. PURSELL
CHIEF JUDGE CLERK OF COURT
SUSAN S. BUCHHOLZ FREDERICKA H. WICKER CHIEF DEPUTY CLERK JUDE G. GRAVOIS MARC E. JOHNSON STEPHEN J. WINDHORST LINDA M. WISEMAN JOHN J. MOLAISON, JR. FIRST DEPUTY CLERK SCOTT U. SCHLEGEL TIMOTHY S. MARCEL FIFTH CIRCUIT MELISSA C. LEDET JUDGES 101 DERBIGNY STREET (70053) DIRECTOR OF CENTRAL STAFF POST OFFICE BOX 489 GRETNA, LOUISIANA 70054 (504) 376-1400
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24-C-297 E-NOTIFIED 40TH DISTRICT COURT (CLERK) HONORABLE VERCELL FIFFIE (DISTRICT JUDGE) VERCELL FIFFIE (RESPONDENT) ZACHARY DELERNO (RESPONDENT) CANDACE C. CHAUVIN (RELATOR) PAUL R. WEGMANN (RELATOR) TRAVIS L. BOURGEOIS (RELATOR)
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