Martha Green, George Green, and the Estate of Martha Green Versus Maison Insurance Company and Louisiana Insurance Guaranty Association

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
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SEPTEMBER 4, 2024 TO THE TRIAL JUDGE, CLERK OF COURT, COUNSEL OF RECORD AND ALL PARTIES
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24-C-297
E-NOTIFIED
40TH DISTRICT COURT (CLERK)
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