Flowers v. U.S. Fidelity & Guaranty Co.

• Decision Date: 04 September 1979
• Docket Number: No. 64196,64196
• Citation: 381 So.2d 378
• Court: Louisiana Supreme Court
• Parties: Mr. and Mrs. Ernest FLOWERS v. UNITED STATES FIDELITY & GUARANTY COMPANY et al.

Page 378

381 So.2d 378

Mr. and Mrs. Ernest FLOWERS v. UNITED STATES FIDELITY & GUARANTY COMPANY et al.

No. 64196.

Supreme Court of Louisiana.

Sept. 4, 1979.

On Rehearing March 3, 1980.

Rehearing Denied April 7, 1980.

Dissenting Opinion April 9, 1980.

Frederick P. Heisler, Heisler, Wysocki & DeLaup, New Orleans, for plaintiffs-applicants.

Peter A. Feringa, Jr., James A. Babst, Chaffe, McCall, Phillips, Toler & Sarpy, New Orleans, for defendants-respondents.

BLANCHE, Justice.

The principal issue is whether the claim for plaintiff's personal injuries has prescribed.

On January 11, 1976, plaintiff, Mrs. Flowers, was injured when the defendant's insured struck the Flowers family vehicle. Mr. Leon A. Aucoin, also made a defendant, was a claims adjuster for defendant United States Fidelity & Guaranty Company, and entered into negotiations with Mr. and Mrs. Flowers with regard to the settlement of their claims arising out of the accident. Concerning Mrs. Flowers' claim for personal injuries, Aucoin requested that she obtain final medical reports so that they could reach an agreement as to the amount to be paid, and further indicated that he did not want to make an appointment at his office until she had the reports to bring with her. With regard to Mr. Flowers' claim as head and master of the community, United States Fidelity & Guaranty Co. paid him for the damages to the family automobile and all but $175 of the medical expenses. Negotiations for payment of these amounts extended for over one year.

Finally, on January 14, Mrs. Flowers, then in possession of all medical reports, telephoned Aucoin in order to make an appointment to discuss the final terms of the settlement. As one may guess, this little narrative concludes with Aucoin telling Mrs. Flowers that she was too late, and that her claim had prescribed.

Mrs. Flowers then contacted a lawyer and filed suit. The suit was met with a peremptory exception of prescription insofar as it asserted a claim on the underlying automobile accident; a peremptory exception of no cause of action insofar as plaintiffs' claim purported to assert a claim against defendants in tort arising out of their conduct of settlement negotiations; and, a motion for summary judgment as to plaintiffs' claim for damages arising out of breach of contract. The trial judge ruled in defendant's favor on all counts, and dismissed plaintiffs' suit. The Fourth Circuit Court of Appeal affirmed. We reverse, finding that prescription was interrupted by the acknowledgment of defendant's representative Aucoin that he would settle with Mrs. Flowers as soon as all of her medical reports were available.

Civil Code Article 3520 provides as follows:

"Prescription ceases likewise to run whenever the debtor, or possessor, makes acknowledgment of the right of the person whose title they prescribed."

On its face, all that is required is a simple acknowledgment by the party who owes the debt; neither does the Code require that the acknowledgment be in any particular form; nor does it require that anything beyond the "right" of the obligee be recognized by the acknowledgment of the obligor.

The Court of Appeal relied on the case of Tassin v. Allstate Ins. Co., 310 So.2d 680, La.App. 4th Cir., Writ Ref., 313 So.2d 836 (La.1975), which we observe is indistinguishable in principle from the present case. In Tassin, the trial judge accepted the testimony of the attorney representing the plaintiff and who was attempting to negotiate a settlement with defendant Allstate's representative, that it was not necessary for him to file suit, and that the case would definitely be settled as soon as the medical reports were assembled. The decision reports that the claim adjuster asked the attorney to "hold out" in addition to leading him to believe that the claim would be amicably settled. Tassin, supra, at 686. The only distinguishable difference between this case and the Tassin case is that Mrs. Flowers did not have a lawyer and consequently, Aucoin's agreement was directly with plaintiff to settle when all of the medical was assembled. The crucial finding in Tassin of this issue is as follows:

"At no time did plaintiffs and defendants ever arrive at the amount of the settlement nor was the amount even discussed since Allstate's personnel were unwilling to evaluate the claim until such time as the medical reports were available.

"We have concluded that this article of the Civil Code has reference to those situations where there is an acknowledgment of a note or an account where the amount of the claim is liquidated and not to be negotiated as in the instant case."

The "right" which resided with Mrs. Flowers was to be compensated for her injuries. The acknowledgment of that right was unquestionably recognized when defendant's agent made it clear to her that all of the medical reports must be assembled and made available before an amount could be determined.

Despite the holding in Tassin, supra, the acknowledgment need not have been an amount certain. Once recognized, there would be no prohibition for the parties to have agreed that the exact amount could be determined after a certain condition or event had been complied with (in this case, the furnishing of the medical reports).

We therefore determine that a debtor may acknowledge owing a debt without knowing the exact amount, and accordingly, overrule Tassin v. Allstate Ins. Co., 310 So.2d 680 (1975), holding to the contrary.

Having decided that plaintiffs' claim on the underlying accident has not prescribed, it is unnecessary to decide the other issues raised by plaintiffs on this appeal.

For the above reasons, we reverse the decision of the Court of Appeal and remand the case to the District Court for further proceedings in accordance with law.

REVERSED AND REMANDED.

MARCUS, J., dissents and assigns reasons.

MARCUS, Justice (dissenting).

I disagree with the finding of the majority that prescription was interrupted by the acknowledgement of defendant's representative Aucoin that he would settle with Mrs. Flowers as soon as all of her medical reports were available. To constitute an acknowledgement, the actions of the defendant must clearly and specifically indicate that the defendant accepts liability. See La.Civil Code art. 3520. Such was not the case here. I agree with the majority in overruling Tassin v. Allstate Ins. Co., 310 So.2d 680 (La.App. 4th Cir.), writ refused, 313 So.2d 836 (La.1975), to the extent that Tassin held that unliquidated debts could not be acknowledged. Accordingly, I respectfully dissent.

ON REHEARING

DENNIS, Justice.^*

On rehearing we uphold the basic rule of law stated in our original opinion but resolve the case differently, primarily due to a corrected factual finding. We continue to hold that prescription of an unliquidated claim for damages may be interrupted by the tacit acknowledgment of the debtor. After reconsidering the evidence, however, we find that the insurance company's adjuster did not tacitly acknowledge the wife's tort claim by either his offer to negotiate settlement or his payment of medical expenses. Although prescription of the claim for medical expenses by the husband as head of the community was interrupted, the wife's claim for damages prescribed.

Nora Flowers sustained injuries in an automobile accident with the defendant insurance company's insured on January 11, 1976. Over one year following the accident, on February 3, 1977, she and her husband filed suit against defendant, praying for damages because of her bodily injuries and medical expenses. After a hearing, the trial court sustained the defendant's exception of prescription. The court of appeal affirmed, and we granted certiorari.

The plaintiffs argue that their lower courts suits were timely filed because prescription was interrupted by several events. The evidence reflects that in January or February, 1976, the defendants' insurer paid Mr. Flowers for the damages to the family automobile. By April or May, 1976 the defendant insurer paid for most of Nora Flowers' medical expenses resulting from the accident. On two occasions Mrs. Flowers discussed her claim for damages with defendants' adjuster. She first telephoned him in April or May, 1976 to set up a meeting, but he told her it would be pointless to meet until she had all of her medical reports. Shortly after being released by her doctors on November 14, 1976, Mrs. Flowers again requested an appointment. But the adjuster, as before, told her that she would need to obtain reports from her doctors. Finally, after she had received the reports Mrs. Flowers called the adjuster on January 14, 1977, but was told that her claim had prescribed.

We find from the evidence that the insurance company, which paid Mr. Flowers for all but $175 of Mrs. Flowers' medical expenses intended to acknowledge its indebtedness for all of these expenses. There is no evidence that the company sought merely to compromise this claim. Contrary to our finding on original hearing, however, the evidence does not disclose that the insurance company ever admitted that it owed Mrs. Flowers for her personal injuries. It is true that its adjuster expressed a willingness to discuss her claims and to try to reach a compromise with her. But his statements and actions did not manifest an intention to admit the company's indebtedness to her.

The questions presented, therefore, are (1) whether liberative prescription of an action for delictual damages may be interrupted tacitly by the actions of the debtor, and, if so, (2) whether the company's acknowledgment of its indebtedness for medical expenses to Mr. Flowers interrupted prescription of Mrs. Flowers' action for damages due to her personal injuries.

1. Acknowledgment of Delictual Responsibility

Prescription of a right to damages for personal injuries or medical expenses arising from an offense or quasi-offense may be interrupted by either an express or a tacit...