Rizer v. American Sur. and Fidelity Ins. Co.

• Decision Date: 08 March 1996
• Citation: 669 So.2d 387
• Parties: 95-1200 La
• Court: Louisiana Supreme Court

Page 387

669 So.2d 387

95-1200 La. 3/8/96

Richard A. RIZER and Cherice R. Baldwin v. AMERICAN SURETY AND FIDELITY INSURANCE COMPANY, et al.

No. 95-C-1200.

Supreme Court of Louisiana.

March 8, 1996.

Rehearing Denied April 19, 1996.

On Writ of Certiorari to the Court of Appeal, First Circuit, Parish of East Baton Rouge.

Daniel Alexander Reed, Seale, Smith, Zuber & Barnette, for Applicant.

Steven A. Adams, McGlinchey, Stafford, Lang, Kirk Albert Patrick, III, for Respondent.

James Elwood Moore, Jr., for Rachel C. Moore (amicus curiae).

[95-1200 La. 1] JOHNSON, Justice. ^*

On March 30, 1990, a vehicle owned by Gregory W. Baldwin and driven by Richard A. Rizer was allegedly struck from the rear by a vehicle driven by Jerry W. Boudinot, Jr. On July 27, 1990, Rizer and his guest passenger, Cherice W. Baldwin, filed suit against Boudinot's liability carrier, American Surety & Fidelity Insurance Company (American Surety). Subsequently, American Surety was ordered into liquidation. On August 5, 1992, plaintiffs amended their petition to name Louisiana Insurance Guaranty Association (LIGA) and State Farm Insurance Company (State Farm), Gregory Baldwin's liability carrier and uninsured and/or underinsured carrier, as defendants. On October 15, 1992, over two years after the accident, plaintiffs filed a supplemental and amending petition naming Boudinot as a defendant. On January 7, 1993, almost three years after the accident, Rizer filed a second supplemental and amending petition adding United Services Automobile Association ¹ (USAA), Rizer's uninsured motorist carrier, as a defendant.

[95-1200 La. 2] USAA filed an exception of prescription contending that it was not timely sued within the two year prescriptive period pursuant to La.R.S. 9:5629 and that prescription was not interrupted because USAA was not solidarily liable with any of the parties sued within the prescriptive period. The trial judge maintained the exception of prescription. The court of appeal reversed finding that American Surety and USAA were solidary obligors and, thus, timely suit against American, the tortfeasor's liability carrier, interrupted prescription as to USAA, Rizer's uninsured motorist carrier. ² Relying, in part, on Hoefly v. Government Employees Ins. Co., 418 So.2d 575 (La.1982), the court of appeal reasoned that solidarity existed because both American Surety and USAA were "obliged to compensate plaintiff for the same damage, i.e., his personal injuries resulting from the March 1990 accident." The court of appeal found it irrelevant that American Surety and USAA were "contractually liable for different dollar portions of the same damage, i.e., the uninsured motorist insurer is liable to plaintiff only for the amount of his damages above the liability insurer's policy limits...." We granted certiorari to review the correctness of this decision. ³

The issue presented for our consideration is whether an accident victim's uninsured motorist carrier is solidarily obligated with the tortfeasor's liability carrier so that the victim's timely suit against the latter interrupts prescription with regard to the victim's uninsured motorist carrier.

Actions against a underinsured/uninsured carrier are subject to a two year prescriptive period under La.R.S. 9:5629 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.

Prescription is interrupted by the filing of suit in a court of competent jurisdiction. La.Code Civ.P. art. 3462. The interruption of prescription against one solidary obligor is [95-1200 La. 3] effective against all solidary obligors. La.Civ.Code art. 1799 and 3503. Ordinarily, the burden of proof is on the party pleading prescription; however, when the plaintiff's petition has clearly prescribed on its face, as here, the burden shifts to the plaintiff to prove that prescription has been suspended or interrupted. Younger v. Marshall Industries, Inc., 618 So.2d 866, 869 (La.1993); Williams v. Sewerage & Water Bd. of New Orleans, 611 So.2d 1383 (La.1993). Additionally, if the plaintiff's basis for claiming interruption of prescription is solidary liability between two or more parties, then the plaintiff bears the burden of proving that solidarity exists. Younger, 618 So.2d at 869.

In Hoefly v. Government Employees Insurance Co., 418 So.2d 575 (La.1982), this court held that an automobile accident victim's uninsured motorist carrier was solidarily obligated with the tortfeasor so that the victim's timely suit against the tortfeasor interrupted prescription with regard to the insurer. In Hoefly, this court set forth the elements for determining the existence of a solidary obligation; specifically, this court stated that "[a]n obligation is solidary among debtors when they are obliged to the same thing, so that each may be compelled for the whole, and when payment by one exonerates the other toward the creditor." Id. at 576; La.Civ.Code art. 1794. In Hoefly, this court made it clear that the sources of the obligations are irrelevant so long as the obligors are obligated to repair the same damage. Id. at 579.

The first element of solidarity delineated in Hoefly is that the obligors must be "obliged to the same thing." In Narcise v. Ill. Central Gulf Railroad, 427 So.2d 1192 (La.1983), this court found that a railroad company liable to its employee under the Federal Employer's Liability Act was solidarily liable with a third party tortfeasor. This court explained that it is the coextensiveness of the obligations for the same thing that determines the existence of solidary liability. That is, once the extent of each debtor's liability has been determined, there is a solidary obligation to the extent that they have common liability to the injured party. Id. at 1195. It is the extent of the common liability that determines whether the obligors are obliged for the same thing.

Moreover, in Hoefly and in Narcise, this court explained that the sources of the [95-1200 La. 4] obligors' debts are irrelevant so long as the obligors are obligated to repair the same damage. Hoefly, 418 So.2d at 579; Narcise 427 So.2d at 1195. Consequently, different sources of liability would not "preclude an in solido obligation to the extent that each is liable for certain damages sustained by plaintiff." Narcise, 427 So.2d at 1195.

In light of these precepts, our inquiry must focus on the obligations of a tortfeasor's liability carrier and a victim's uninsured/underinsured motorist carrier. Every self-propelled motor vehicle registered in this state, with limited exceptions defined by statute, must be covered by an automobile liability policy or by some other form of security. La.R.S. 32:861. A motor vehicle liability policy insures "against loss from the liability imposed by law for damages arising out of the ownership, maintenance, or use of such motor vehicle" subject to monetary limits set by statute. La.R.S. 32:900B. Moreover, "[t]he liability of the insurance carrier with respect to the insurance [provided by the required motor vehicle liability policy] shall become absolute whenever injury or damage covered by said motor vehicle liability policy occurs...." La.R.S. 32:900F(1).

The obligations of an uninsured motorist vehicle carrier are defined, in part, by La.R.S. 22:1406D which provided in pertinent part at the time of the accident:

D. The following provisions shall govern the issuance of uninsured motorist coverage in this state.

(1)(a)(i) No automobile liability insurance covering liability arising out of the ownership, maintenance, or use of any motor vehicle shall be delivered or issued for delivery in this state with respect to any motor vehicle designed for use on public highways and required to be registered in this state or as provided in this Subparagraph unless coverage is provided therein or supplemental thereto, in not less than the limits of bodily injury liability provided by the policy, under provisions filed with and approved by the commissioner of insurance, for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured or underinsured motor vehicles because of bodily injury, sickness, or disease, including death, resulting therefrom....

* * * * * *

(ii) With respect to bodily injury to an injured party while occupying an automobile not owned by said injured party, resident spouse, or resident relative, the following priorities of recover under uninsured motorist coverage shall apply:

[95-1200 La. 5] (aa) The uninsured motorist coverage on the vehicle in which the injured party was an occupant is primary;

(bb) Should that primary uninsured motorist coverage be exhausted due to the extent of damages, then the injured occupant may recover as excess from other uninsured motorist coverage available to him. In no instance shall more than one coverage from more than one uninsured motorist policy be available as excess over and above the primary coverage available to the injured occupant.

* * * * * *

(2)(a) For the purpose of this coverage, the terms "uninsured motor vehicle" shall, subject to the terms and conditions of such coverage, be deemed to include an insured motor vehicle where the liability insurer thereof is unable to make payment with respect to the legal liability of its insured within the limits specified therein because of insolvency.

(b) For the purposes of this coverage the term uninsured motor vehicle shall, subject to the terms and conditions of such coverage, also be deemed to include an insured motor vehicle when the automobile liability insurance coverage on such vehicle is less than the amount of damages suffered by an insured and/or the passengers in the insured's vehicle at the time of an accident, as...