Insurance Dispute Lawyer Blog
While Louisiana law has not always been a beneficial reliance for residents to fall back on, changes in the last 5 years have helped change that and make financial recovery in the wake of a disaster possible. The previous law in Louisiana stated that, after a fire to a home, the homeowner had 12 months in which to bring a case against the insurance company. A new law passed in mid-2007 extended the period to 24 months. This is a break for many families who felt the impact of such a disastrous event. It will give these individuals and families more time to figure out whether the insurance company’s offer is sufficient. As with every time a new law is passed, there are certain questions that remained to be answered as the situations arise. One such question is how the new legislation impacts those whose claim arose prior to the enactment of the law and had not expired by the time the law was enacted.
In Eric Holt vs. State Farm Fire Casualty Co., such a situation arose for Mr. Holt (Holt). In January 2007, Holt’s home was damaged in a fire. He was insured by State Farm Casualty Co. (State Farm). State Farm refused to pay for any of the damages under the policy. In February of 2008, Holt sued State Farm due to dissatisfaction with its ultimate decision. State Farm filed for summary judgment arguing that (1) the claim was barred because state law, at the time the claim arose, allowed only 12 months in which the claim could be filed for fire damage to a home and (2) the claim was barred because the policy stated that any claim must be filed within 12 months. State Farm argued that because of these two reasons, and the fact that the claim was filed more than 12 months after the fire, the claim is barred by the prescriptive period. The trial court refused to grant summary judgment and State Farm appealed.
In terms of State Farm’s claim that the policy between it and Holt barred any claim beyond a 12 month period, the policy also states that if the policy conflicts with state law, state law will control the issue. The appellate court then had to figure what state law governed the issue at hand. Act 43 of 2007 was enacted On August 15, 2007. The act increased the time in which to bring a home damage claim, including fire damage, from 12 months to 24 months. State Farm argued that because the act was enacted after the damage to Holt’s home, the act did not apply to Holt. Under Louisiana law, the difference comes down to (1) whether the legislature clearly identified if an act will apply retrospectively and (2) if the act does not clearly so state, if the act is substantive in nature, meaning that it creates or impacts a cause of action, it will only apply proscriptively, on the other hand, if the act is procedural in nature, meaning it impacts only how a cause of action can be brought, it can apply retrospectively.
Act 43 does not clearly state whether it applied retrospectively. The Appellate Court concluded that because the act only increased the time in which to bring a claim, and not the type of claim or any elements of the claim, that the act was procedural in nature. Under Louisiana law, it is a well settled issue that procedural acts can be applied retrospectively. The only exceptions to this are that if applying an act retrosepctively (1) impacts a vested cause of action, or (2) revives an already expired cause of action, the retrospective application would violate constitutional rights and would be unjust to apply. However, neither of these exceptions apply in the application of the law in Holt’s case. Therefore, the Court decided that Holt’s claim was not time barred by the prescriptive period.
It is essential that if you have a claim, or your think you have a claim, you should seek the advice of legal counsel as soon as possible so that time does not run out on your ability to take any kind of action on your claim .
If you think you have a claim, or you have been injured in any way, contact the Berniard Law firm at 504-521-6000 to speak with an attorney who can help.