Tag: prescription

Louisiana Legislature Sets New Prescription Period for Tort Claims

The Louisiana legislature recently enacted laws that set new prescription periods for most delictual/tort actions and claims for damage caused to immovable property. Civil Code articles 3492 and 3493 previously established a prescription period of one year for these types of claims. The legislature repealed these articles and enacted Louisiana Code Articles 3493.11 and 3493.12 in their place.

Louisiana Code Article 3493.11 now establishes a prescriptive period of two (2) years for delictual actions/tort claims that runs from the day injury occurred or damage is sustained. It contains language previously included in Louisiana Civil Code Article 3492, which states that prescriptive period does not run against minors or interdicts in actions involving permanent disability and brought pursuant to the Louisiana Products Liability Act or state law governing product liability actions in effect at the time of the injury or damage.

Louisiana Civil Code Article 3493.12 also establishes a prescriptive period of two (2) years when damage is caused to immovable property. This prescriptive period runs from the day the owner of the immovable acquired, or should have acquired, knowledge of the damage.

These changes went into effect of July 1, 2024. Louisiana Civil Code Articles 3493.11 and 3493.12 apply prospectively only and apply to delictual actions arising after July 1, 2024.

Louisiana Supreme Court Vacates Prior Decision and Finds Prescriptive Periods for Child Abuse Claims Can Be Revived

In 2021, the Louisiana Legislature amended La. R.S. 9:2800.9 to provide that a legal action against a person for sexual abuse of a minor, if barred by liberative prescription prior to the effective date of the amendment, is revived for a three-year period after the effective date of the amendment.  In 2022, La. R.S. 9:2800.9 was amended again to specifically state the Legislature’s intent to revive any cause of action related to sexual abuse of a minor that previously prescribed under any Louisiana prescriptive period.

On March 22, 2024, the Louisiana Supreme Court issued its decision in Douglas Bienvenu, et al. v. Defendant 1 and Defendant 2, and found the statute was unconstitutional because it conflicted with due process protections set forth in the Louisiana Constitution. Specifically, the Court found that a defendant has a vested property right in accrued prescription and that revival of a prescribed cause of action violated due process.

However, the Louisiana Supreme Court granted the plaintiffs’ request for rehearing, and on June 12, 2024, the Court vacated its prior ruling and found that the amendments to La. R.S. 9:2800.9 were constitutional.

On rehearing, the court agreed that a defendant has a vested property right in accrued prescription but found another step in constitutional analysis was required— examination of whether the legislature’s revival of prescribed causes of action for sexual abuse of minors “comports with substantive due process.” The Court noted, “The essence of substantive due process is protection from arbitrary and capricious action.”

In Bienvenu, the defendants’ right to plead prescription was an economic interest that did not implicate fundamental rights. The statute at issue was social welfare legislation, enacted to address societal costs of child sexual abuse. Therefore, the Court found the applicable due process test was whether the legislation was reasonable in relation to the goal to be attained and was adopted in the interest of the community as a whole. The statute needed only to have a rational relationship to a legitimate governmental interest to survive due process scrutiny.

The Court found the amendments to La. R.S. 9:2800.9 passed this test because (1) the provision assists in identifying hidden child predators so children will not be abused in the future; (2) shifts the costs of the abuse from the victims and society to those who actually caused it; and (3) educates the public about the prevalence and harm from child sexual abuse to prevent future abuse. These interests were found legitimate and compelling. Thus, the statute was constitutional and could be applied retroactively “to revive, for the period stated, all causes of action related to sexual abuse of a minor that previously prescribed under any Louisiana prescriptive period.”

References:

Bienvenu v. Defendant 1, 2023-01194 (La. 3/22/24), 382 So. 3d 38, reh’g granted, 2023-01194 (La. 5/10/24), and opinion vacated on reh’g, 2023-01194 (La. 6/12/24).

Bienvenu v. Defendant 1, 2023-01194 (La. 6/12/24).

Bad Faith Action Brought Against an Insurer Less than Ten Years after the Date of Loss Dismissed As Prescribed

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.