52 So. 3d 1103
La. Ct. App.2010Background
- TCC Contractors, Inc. and Thompson Construction Co., Inc. contracted with Hospital Service District No. 3 (Thibodaux Regional Medical Center) for a hospital expansion; project delayed beyond January 2005.
- The contract required the Hospital to procure builder’s risk insurance naming TCC, Thompson, and others as loss payees or insureds; Continental issued a builder’s risk/property policy to the Hospital but did not name TCC/Thompson as insureds or loss payees.
- Katrina (Aug 2005) and Rita (Sept 2005) caused water intrusion and alleged construction deficiencies; Continental’s builder’s risk coverage was deleted as of Aug 24, 2005 after completion determination.
- Continental denied any coverage or rights for plaintiffs; Hospital assigned its rights against Continental to TCC on Feb. 6, 2008; plaintiffs filed suit Aug. 18, 2006 against Hospital, architects, and insurers including Continental.
- April 15, 2009 amending petition added claims as assignee of Hospital; May 15, 2009 Continental joined peremptory exception of prescription; Nov. 20, 2009 trial court granted new trial and sustained prescription, dismissing plaintiffs’ claims with prejudice.
- Court affirms dismissal on prescription grounds, holding that the assignee did not relate back and the Hospital’s unexercised “strictly personal” right to sue could not interrupt prescription.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether prescription was validly interrupted | Plaintiffs contend earlier suit interrupted prescription | Continental argues no interruption since Hospital failed to sue timely; assignment ineffective | Prescription not interrupted; dismissal affirmed |
| Effect of Hospital’s assignment to TCC on rights against Continental | Assignment should transfer rights to pursue policy claims | Policy anti-assignment clause and lack of consent controls; assignment ineffective | Assignment ineffective to grant action against Continental for plaintiffs; rights not sufficiently transferred |
| Whether Amending Petition relates back to original petition | Amendment relates back as part of original dispute | Amendment is new claim not arising from original pleading; does not relate back | Amendment did not relate back; derivative policy claims prescribed and cannot be revived |
| Whether plaintiffs had any right of action against Continental at time of original petition | Plaintiffs argued loss payee/third-party beneficiary status | Continental policy did not name plaintiffs as insureds/loss payees; no direct action | No right of action against Continental at time of original petition; claim dismissed |
Key Cases Cited
- Demma v. Auto. Club Inter-Insurance Exch., 15 So.3d 95 (La. 2009) (interruption requires admission of liability or undisputed portion of claim)
- Kinchen v. Metro. Prop. & Cas., Ins. Co., 923 So.2d 678 (La. App. 1st Cir. 2005) (relation back not applicable where new claim arises from different transaction)
- Taylor v. Babin, 13 So.3d 633 (La. App. 1st Cir. 2009) (amendment not relating back when new claims; malpractice context)
- Ray v. Alexandria Mall, 434 So.2d 1083 (La. 1983) (relation back doctrine governs amended petitions)
- Giroir v. S. La. Med. Ctr., 475 So.2d 1040 (La. 1985) (relation back criteria for amendments/supplements)
- King v. Ill. Nat'l Ins. Co., 9 So.3d 780 (La. 2009) (strictly personal right to file suit; inchoate rights not seizable)