Cynthia Bryan, Aubry Bryan, Jr., Aunya Bryan, and Glenda Bryan v. Louisiana Citizens Property Insurance Corporation as the Guarantor of the Insolvent Insurance Company, Southern Fidelity Insurance Company

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.

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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

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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

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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

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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.
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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

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“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.

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