An Update on Prescription – The Most Important Issue

In Madden v. Fairburn, the plaintiff amended her petition to assert a UM claim against an insurer based upon the alleged negligence of a new defendant not named in the original petition. The amended petition asserted a new theory of liability but sought the same recovery under the same UM policy.

The issue presented to the Louisiana Court of Appeal for the First Circuit was whether the original petition interrupted prescription for the claim brought against the UM insurer. Because the insurer did not receive notice in the original petition that it could be liable for damages based upon the new defendant’s fault, the court found prescription could not be interrupted.

Madden was a passenger in a vehicle driven by John Seibert that collided with Steven Ray Fairburn. Madden timely filed suit against Fairburn and Capitol Specialty Insurance Corporation (Capitol Specialty), claiming uninsured motorist (UM) coverage under its policy. The Trial Court later dismissed Madden’s claims against Fairburn. While the appeal of that ruling was pending, and over five years after the accident, Madden amended her petition to allege Seibert was at fault and sought the same UM coverage any damages he caused. Capitol Specialty argued the claim brought against it in the amended petition had prescribed.

At the time of the accident, claims for torts/delictual actions had a one-year prescriptive period that commenced from the date of the injury or damage sustained* Claims to recover damages under a UM policy are subject to a prescription period of two years.^ Madden argued her original claim against Capitol Specialty interrupted prescription because her amended claim arose from the same accident and sought to recover damages under the same UM policy.

La. C.C. art. 3462 states that prescription is interrupted when an obligee (Madden) commences an action against an obligor (Capitol Specialty) in a court of competent jurisdiction and venue. However, in Kling v. Hebert, the Louisiana Supreme Court has clarified that the “essence of interruption of prescription by suit is notice to the defendant of the legal proceedings based on the claim involved.” The Kling judges emphasized that prescription serves to protect defendants from unexpected liability years after an event, particularly when a new legal theory or a different alleged tortfeasor is introduced.

The court also considered Trahan v. Liberty Mutual Insurance Company, which held that a claim against an insurer based on one party’s negligence does not interrupt prescription for a later claim against the same insurer based on another party’s negligence. Because Madden’s original suit was based on Fairburn’s negligence, Capitol Specialty did not receive timely notice that she would later seek UM coverage based on Seibert’s alleged fault. Thus, the appellate court ruled in favor of the insurer, affirming the prescription of the plaintiff’s claims.

References:

Madden v. Fairburn, 2024-0513 (La. App. 1 Cir. 12/27/24), --- So.3d ---, 2024 WL 5232995.

Kling v. Hebert, 23- 00257, p. 4 (La. 1/ 26/24), 378 So. 3d 54.

Trahan v. Liberty Mutual Insurance Company, 314 So. 2d 350 (La. 1975).

*La. C.C. art. 3492. See As of July 1, 2024, delictual actions are subject to a two-year liberative prescriptive period, applying to delictual actions that arose or after the effective date.

^ La. R.S. 9:5629.

For medical malpractice claims in Louisiana, the general rule is that a plaintiff has one year from the date of the alleged malpractice to bring his claim for damages. However, La. R.S. 9:5628 also recognizes an exception to this one-year prescription period, when the plaintiff claims he was unaware of the malpractice and there was a delay in the discovery of the alleged malpractice. This is known as the “discovery rule.”

Under the discovery rule, the prescriptive period begins to run on the date the injured party obtains actual or constructive knowledge of facts “indicating to a reasonable person that he or she is the victim of a tort.”^ Constructive knowledge is “whatever notice is enough to excite attention and put the injured person on guard and call for inquiry.”^ When a plaintiff has knowledge of facts strongly suggesting that the complaint may be the result of improper treatment, and the medical provider has not misled the patient, then “the cause of action is reasonably knowable to plaintiff.”*

The court recently examined these principles in In re Singleton, where the plaintiff relied upon the discovery rule to assert a malpractice claim against his medical provider. The plaintiff alleged his physician negligently performed a lumbar procedure in May 2017. The plaintiff initiated proceedings against the medical provider on February 6, 2019, alleging he did not discover the alleged malpractice until February 10, 2018, when he experienced a “sudden onset of excruciating pain.”

In response to the plaintiff’s claim, the medical provider produced evidence to show the plaintiff went to the emergency room on November 21, 2017, with complaints of severe lower back pain that radiated into his hips and legs. Based upon this evidence, the defendant doctor argued the actual date of delayed discovery was November 21, 2017, and that the plaintiff’s claims prescribed because they were filed more than one year after that date.

The court agreed. It held the medical provider met his burden of proof when he presented evidence that “severe” or “excruciating” pain, which allegedly advised plaintiff of his claim, was first experienced in November 2017, not February 2018 as alleged in plaintiffs’ complaint. The plaintiff was unable to produce any evidence to support the allegations in his complaint about the timing of his episode of pain or to refute the medical provider’s arguments. Therefore, the plaintiff could not show his claim of delayed discovery until February 2018 was “reasonable.” The court affirmed that the date of discovery was in November 2017, and therefore the plaintiff’s claims prescribed before suit was filed in February 2019.

References:

In re Singleton, 23-190 (La. App. 5 Cir. 2/28/24), 2024 WL 826169.

^Campo v. Correa, 01-2707 (La. 6/21/02), 828 So.2d 502.

*Carter v. Haygood, 892 So.2d 1261, 1273 (La. 2005).

The Louisiana Supreme Court recently ruled a plaintiff’s bad faith insurance claim was prescribed where the policy at issue required actions to be brought within two years after the date of loss.

In Phyllis Wilson v. Louisiana Citizens Property Insurance Corporation, the plaintiff asserted a bad faith claim against an insurer. The applicable policy of insurance provided “[n]o action can be brought unless the policy provisions have been complied with and the action is started within two years after the date of loss.” The plaintiff alleged that the insurer failed to timely tender payments for losses that occurred on August 27, 2020 and October 20, 2020. However, the plaintiff did not file her suit unit January 9, 2023.

Prior to the Wilson decision, courts frequently relied on the Louisiana Supreme Court’s decision in Smith v. Citadel Ins. Co., which held that actions against insurers under Louisiana’s bad faith statutes are subject to a ten-year prescriptive period. In Smith, the Supreme Court addressed the issue of whether a bad faith action against an insurer was a delictual or tort action subject to a one-year prescriptive period, or a contractual action, which is subject to a ten-year prescriptive period under Louisiana law. The Smith court concluded that the duty of good faith owed by the insurer to the insured “emanates from the contract between the parties” such that the “insured’s cause of action is personal and subject to a ten-year prescriptive period.”

In Wilson, the Louisiana Supreme Court examined whether Smith required the Court to uphold a ten-year prescriptive period for bad faith actions even though the insurance policy at issue prohibited actions brought more than two years after the date of loss. The Wilson court ultimately concluded that an action against an insurer brought more than two years after the date of loss is prescribed where the applicable insurance policy set a term of two years for filing a claim against the insurer.

To reach this conclusion, the Wilson court cited Taranto v. Louisiana citizens Prop. Ins. Corp., which held “in the absence a statutory prohibition, a clause in an insurance policy fixing a reasonable time to institute suit is valid.” The Wilson court then turned to the applicable statute and noted that La. R.S. 22:868(B) “expressly provides that no policy ‘shall contain any condition, stipulation, or agreement limiting right of action against the insurer to a period of less than twenty-four months next after the inception of the loss when the claim is a first-party claim…’” The Wilson court noted the two-year limitation in the applicable policy was consistent with La. R.S. 22:868(B).

The court’s ruling supports the argument that policy provisions requiring actions to be filed within two years of the date of loss are enforceable. However, the Court did not disturb its holding in Smith, noting the Smith case was factually distinguishable because it did not involve a policy that contained a contractual limitation on the insured’s institution of suits.

References:

Phyllis Wilson v. Louisiana Citizens Property Insurance Corporation, No. 2023-CC-01320 (La. 1/10/2024) (per curiam), 2024 WL 108714.

Smith v. Citadel Ins. Co., 2019-00052 (La. 10/22/19), 285 So.3d 1062.

Taranto v. Louisiana citizens Prop. Ins. Corp., 2010-0105 (La. 3/15/11), 62 So.3d 721, 728.