Louisiana, with its short one-year tort statute of limitations (in Louisiana called prescription), catches many insurance subrogation professionals unaware. Some may assume that because suit was filed by another party involved in the accident or even by their own insured, the property subrogation claim will relate back to the time of filing of the original petition even if the property subrogation claim is filed after the running of the prescriptive date. It is not an unreasonable assumption, since that’s the way it works for workers’ compensation subrogation in Louisiana. A workers’ compensation carrier can still intervene into a suit filed by its insured for personal injuries against a tort defendant; and the workers’ compensation subrogation claim will not be prescribed because the carrier stepped into the shoes of its insured and the intervention will relate back to the time of filing of the original petition. That’s not always the case with a property subrogation claim. For example, an insurer may pay for the damages to a tractor-trailer rig under its property coverage for a trucking company, and the individual truck driver may bring his own suit against the tort defendant for personal injuries. Simply because the property subrogation claim and the driver’s personal injury claim arise out of the same transaction does not mean that an intervention filed over one year past the date of the accident will automatically relate back to the time of filing of the driver’s original petition. The claims are independent and the parties are different. Unless the trucking company filed its own suit to seek property damages including that paid by the insurance company, an intervention by the property insurer will likely be prescribed.
There is one important caveat to the above. Louisiana Code of Civil Procedure Article 1041[1] provides that an incidental demand is not barred by prescription if it was not barred at the time the main demand was filed and is filed within 90 days of the date of service of the main demand. While initially there was some judicial confusion as to whether an intervention fell under this statute, the Louisiana Supreme Court subsequently clarified this issue by ruling that even an intervention filed by another party for separate damages constitutes an incidental demand within the meaning of Article 1041. Therefore, if you have a property subrogation claim in Louisiana and you are worried that you may have just missed the prescriptive period to file suit, don’t immediately despair. Check the record and see if your insured or another party to the accident has recently filed suit. Depending on the date of service of citation on the defendants, you may be able to still timely intervene by taking advantage of Louisiana Code of Civil Procedure Article 1041.
If you have questions or would like more information about this area of the law, please contact James T. Busenlener at jbusenlener@mwl-law.com.
[1] LA CCP Art. 1041: An incidental demand is not barred by prescription or peremption if it was not barred at the time the main demand was filed and is filed within ninety days of date of service of main demand or in the case of a third party defendant within ninety days from service of process of the third party demand.
