Blanchard v. Geico Gen. Ins. Co.

375 So.3d 723

Succession of Paul BLANCHARD, Appellant

v.GEICO GENERAL INSURANCE COMPANY, Appellee

No. 2021-CA-00883-COA

Court of Appeals of Mississippi.

12/05/2023

HARRISON COUNTY CIRCUIT COURT, FIRST JUDICIAL DISTRICT, HON. LAWRENCE PAUL BOURGEOIS JR., JUDGE

ATTORNEY FOR APPELLANT: JOHN PAUL BARBER, Biloxi

ATTORNEYS FOR APPELLEE: EDWARD C. TAYLOR, KATIE RYAN VAN CAMP, Gulfport

EN BANC.

WILSON, P.J., FOR THE COURT:

¶1. Although Paul Blanchard¹ lived and worked in New Orleans, he obtained a Mississippi automobile insurance policy from GEICO. During the policy period, Blanchard was involved in a car wreck in Louisiana. Blanchard alleged that an unidentified hit-and-run driver caused the wreck. Just less than three years after the wreck, Blanchard sued GEICO in Mississippi circuit court, alleging that GEICO had denied his claim for uninsured motorist (UM) benefits in bad faith. The circuit court granted summary judgment in favor of GEICO, holding that Blanchard’s claims accrued in Louisiana, that they were barred by the applicable one-year and two-year prescriptions in Louisiana,² and that Mississippi’s borrowing statute³ barred Blanchard from bringing the claims in Mississippi. Blanchard appealed.

¶2. The circuit court correctly held that Blanchard’s claim for UM benefits accrued in Louisiana and is barred by the applicable two-year prescription in Louisiana and this State’s borrowing statute. Accordingly, we affirm the grant of summary judgment with respect to that claim. However, in Louisiana, the prescriptive period for first-party bad faith claims is ten years, not one year as the circuit court mistakenly believed. Therefore, the circuit court erred by holding that Blanchard’s bad faith claim is time-barred. Accordingly, we reverse the grant of summary judgment and remand as to Blanchard’s bad faith claim.

¶3. In a supplemental brief on appeal, GEICO argues that Blanchard’s claim for bad faith denial of UM benefits fails as a matter of law because his underlying claim for benefits is time-barred. However, because GEICO did not move for summary judgment on that ground, the issue is not before us on appeal.

FACTS AND PROCEDURAL HISTORY

¶4. On December 5, 2015, Blanchard was involved in a car wreck on Desire Street in New Orleans, Louisiana. Blanchard alleges that his car "was struck by an unknown and speeding hit-and-run driver, which caused his [car] to swerve and hit a parked car." Blanchard was injured, and his car was totaled.

¶5. At the time of the car wreck, Blanchard lived, worked, was registered to vote, and filed his homestead exemption in New Orleans. In addition, his car was registered in Louisiana, he had a Louisiana driver’s license, and his minor child attended school in New Orleans. Blanchard owned ten rental properties, including nine in New Orleans and one on Township Road in Gulfport, Mississippi. Blanchard testified that he rented the upstairs apartment of the Gulfport property, but the down-stairs area was his "personal place." Blanchard testified that he considered his Gulfport property "another residence." But when he was asked how often he stayed in Gulfport, he said he did not "know how to answer that question" and then declined to answer because he might say "something that’s wrong."

¶6. Prior to the subject car wreck, Blanchard used his Gulfport property’s address to apply for and obtain a Mississippi auto insurance policy from GEICO. After the wreck, Blanchard filed a claim for damage to his vehicle and personal injuries under his UM coverage. On December 24, 2015, GEICO notified Blanchard that his "uninsured motorist property coverage [was] applicable and in effect for this loss," and on January 6, 2016, GEICO issued Blanchard a check for $22,893.20 for his property damage. The check was mailed to Blanchard’s Gulfport address with the comment "Uninsured Motorist Coverage."

¶7. On March 30, 2016, GEICO notified Blanchard by email that its "investigation indicate[d] that damages occurred because [Blanchard] failed to maintain control of [his] vehicle and struck a parked vehicle." GEICO further stated that "[b]ased on [its] investigation, the percentage of negligence apportioned to [Blanchard was] 100 percent." Therefore, GEICO stated that it "agreed to handle damage to the other vehicle" and would handle Blanchard’s "damage under [his] collision coverage."

¶8. The next day, Blanchard sent GEICO a letter in response. Blanchard characterized GEICO’s email as "pretty much stating that GEICO was denying my UIM CLAIM and changing my UIM CLAIM to a collision claim." Blanchard "vehemently disagree[d]" with GEICO’s position and provided additional information in support of his claim.

¶9. On April 6, 2016, a GEICO claims representative responded by acknowledging that Blanchard had made a UM claim. The representative stated she would review the information Blanchard had submitted and contact him with any questions or updates regarding the status of his claim.

¶10. Blanchard later hired a Louisiana attorney to pursue his claim, and the attorney continued to communicate with GEICO on Blanchard’s behalf. According to the attorney, on November 16, 2018, a GEICO claims adjuster finally informed her "that the most GEICO would pay to settle … Blanchard’s UM bodily injury claim was a total of $500.00."

¶11. On December 4, 2018, Blanchard filed suit against GEICO in the Harrison County Circuit Court. Blanchard alleged that he had been injured as a result of the negligence of the unidentified hit-and-run driver and that GEICO had refused in "bad faith" to pay his UM claim. Blanchard demanded consequential, general, and special damages, as well as punitive damages and attorney’s fees.

¶12. GEICO answered the complaint and subsequently moved for summary judgment. In its summary judgment motion, GEICO argued that Blanchard’s claims accrued in Louisiana, that his claims were time-barred in Louisiana, and that Mississippi’s "borrowing statute," Miss. Code Ann. § 15-1-65, barred him from pursuing his claims in Mississippi. GEICO relied on section 9:5629 of the Louisiana Revised Statutes Annotated, which provides, "Actions for the recovery of damages sustained in motor vehicle accidents brought pursuant to uninsured motorist provisions in motor vehicle insurance policies are prescribed by two years reckoning from the date of the accident in which the damage was sustained."

¶13. In response, Blanchard argued that Mississippi’s borrowing statute did not apply because his claim for bad faith denial of his UM bodily injury claim under his Mississippi insurance policy accrued in Mississippi, not in Louisiana. Blanchard further argued that he filed his claim within Mississippi’s applicable three-year statute of limitations, Miss. Code Ann. § 15-1-49 (Rev. 2019).

¶14. At the hearing on GEICO’s motion for summary judgment, GEICO argued that Blanchard’s claim for "bad faith" also accrued in and was time-barred in Louisiana. Specifically, GEICO cited Fils v. Starr Indemnity & Liability Ins. Co., 263 So. 3d 1157 (La. App. 3 Cir. 2018), for the proposition that bad faith claims are subject to the one-year prescription in Louisiana Civil Code article 3492.

¶15. The circuit court granted GEICO’s motion for summary judgment, holding that "the statute of limitations applicable to [Blanchard’s] claims is the Louisiana prescription, whether the 1 year prescription for his bad faith claim under Louisiana law or the 2 year prescription applicable to his claim for [UM] benefits available under the GEICO policy." The circuit court also cited Fils for the proposition that Blanchard’s bad faith claim was subject to a one-year prescription. Blanchard filed a motion to alter or amend the judgment, which was denied, and a notice of appeal.

¶16. On appeal, Blanchard continued to argue that he filed suit within Mississippi’s three-year statute of limitations and that the borrowing statute is inapplicable because his claim accrued in Mississippi.⁴ Blanchard also briefly argued that his claim was timely filed even if it is subject to the one-year prescription in Louisiana Civil Code article 3492. Specifically, he contended that he filed suit less than one month after GEICO finally denied his claim—when a claims adjuster allegedly told his lawyer that GEICO would pay no more than $500 to settle the claim. Finally, Blanchard argued that GEICO is barred by the doctrine of equitable estoppel from asserting a statute of limitations defense because he delayed in filing suit based on GEIGO’s "ambiguous and contradictory communications."

¶17. In response, GEICO continued to argue that Blanchard’s claims accrued in Louisiana and are barred by Louisiana’s two-year prescription for UM claims and one-year prescription for bad faith claims. GEICO again cited Fils for the proposition that Blanchard’s bad faith claim is subject to the one-year prescription in Louisiana Civil Code article 3492. GEICO also argued that Blanchard’s equitable estoppel argument is procedurally barred because he did not timely raise the issue in the circuit court.

¶18. After this case was submitted on appeal, this Court realized that GEICO’s arguments and the circuit court’s decision relied in part on a fundamental mistake regarding Louisiana law. GEICO relied on the original opinion in Fils, and GEICO failed to notice that the Fils court granted rehearing. On rehearing, the court held that "the appropriate prescriptive period for bad faith claims arising out of a contract of insurance is the ten-year prescriptive period found in [Louisiana Civil Code article] 3499." Fils, 263 So. 3d at 1163 (emphasis added). Moreover, in 2019, the Louisiana Supreme Court adopted the reasoning of the Fils rehearing opinion and held that "a ten-year prescriptive period [applies] to first-party bad faith claims." Smith v. Citadel Ins. Co., 285 So. 3d 1062, 1072 (La. 2019).

¶19. After noticing the parties’ and circuit court’s mistake regarding Louisiana law, this Court ordered supplemental...