INSURANCE-RELATED COURT CASES
Digested from case reports published online
On July 12, 2018, Sunbelt Shavings, LLC, contacted KC Welding, LLC, and requested that someone repair a metal storage bin, the door of which had become stuck. A KC Welding employee arrived later that day and welded the broken bin, which contained wood shavings. Later that night, a fire began in the bin that KC Welding’s employee had welded, spreading across Sunbelt’s property. The fire burned throughout the night of July 12 and was finally extinguished in the early morning hours of July 13.
Three years later, on July 13, 2021, Western World, as the subrogee of Sunbelt, Shuqualak Lumber Company, and Wood Carriers, Inc., filed a complaint against KC Welding, alleging negligence and breach of contract.
On September 8, 2021, KC Welding filed a “motion to dismiss, or in the alternative, motion for summary judgment.” KC Welding argued that Western World failed to file its lawsuit before the three-year statute of limitation expired and that this failure required the trial court to dismiss Western World’s complaint with prejudice.
Specifically, KC Welding argued that the fire started on July 12, 2018, so the latest date Western World could have filed its lawsuit against KC Welding was July 12, 2021. Western World responded to KC Welding’s motion, arguing that its complaint should not be barred by the statute of limitations “because the injury was not discovered until the fire was extinguished on July 13, 2018.” Further, Western World argued that the elements of both causes of actions were not present until July 13, 2018.
Western World argued that a reading of a Mississippi rule of civil procedure suggested that the statute of limitations could not have begun running on July 12 when the fire began because it continued burning until July 13. It further argued that if July 13, 2018, was the day the claim accrued, the statute of limitations would actually begin running on July 14, 2018. KC Welding argued that Mississippi case law states that a claim accrues on the day all elements are present. KC Welding also informed the court that Western World’s argument that the statute of limitations should actually begin running on July 14, 2018, was not briefed.
The trial court found “as a matter of fact … the cause of action accrued on July the 12th and not from the date of discovery.” The court also found that the fire was not a latent injury. Based on the court’s reading of the rule of civil procedure, it determined that the cause of action accrued on July 12, 2018, but the statute of limitations began running on July 13, 2021. The court denied KC Welding’s motion to dismiss because Western World filed its complaint before the statute of limitations had expired.
A hearing to reconsider was held on April 25, 2022. Western World argued that the statute of limitations did not begin running until July 13, 2018, because that was the earliest date that every element of the alleged torts was present. Therefore, Western World argued, the statute of limitations had not run when the complaint was filed on July 13, 2021.
KC Welding responded, arguing that the three-year statute of limitations began running when the cause of action accrued. Further, it argued, “courts have held that the cause of action accrues when it comes into existence as an enforceable claim.” KC Welding also stated, “The moment the fire occurred, there was damage.” Therefore, the statute of limitations began running on July 12, 2018.
Western World disagreed with KC Welding’s stance. Western World further argued that a cause of action cannot accrue until a plaintiff has discovered or should have discovered an injury. Western World could not have discovered the full injury until July 13, 2018, because the fire “continued raging” through the night of July 12, 2018, and into the morning hours of July 13, 2018.
On May 2, 2022, the trial court issued its final judgment, granting KC Welding’s motion to dismiss with prejudice “due to the applicable statute of limitations.” Western World appealed.
On appeal, it raised two issues: (1) the trial court erred by determining that the fire was not a latent injury to which the discovery rule applied, which would toll the accrual of this action; and (2) the trial court erred by determining the cause of action accrued on July 12, 2018, when the fire started, and not when the fire was extinguished on July 13, 2018.
The supreme court of Mississippi affirmed the trial court’s dismissal of Western World’s complaint with prejudice because the statute of limitations had expired.
Western World Insurance Group v. KC Welding, LLC—Supreme Court of Mississippi—October 12, 2023—No. 2022-CA-00527-SCT.