Filing a Day Late Leaves Insurer Short Under Mississippi’s Statute of Limitations

The Mississippi Supreme Court has ruled that an insurer misunderstood when a three-year statute of limitations begins in dismissing the insurer’s claims relating to a fire on an insured’s property.

The high court affirmed that a statute of limitations begins when the cause of action accrues, in this case a fire that started July 12, 2018, and not later. Thus under the state’s three-year statute of limitations, any negligence claim had to be filed by July 12, 2021.

Western World Insurance Group filed its negligence and contract claims a day late, on July 13, 2021. It argued that the filing was still timely within the three year window because the fire was not extinguished and the cause and extent of the damage as well as any negligence were not known until July 13, 2018. But the state’s high court effectively said anything learned after the day the fire started is irrelevant to when the statute of limitations begins.

On July 12, 2018, Sunbelt Shavings requested that an employee from KC Welding come repair the door of a box containing wood chips. Sunbelt manufactures and sells wood shavings used as bedding for horses, livestock, and other outdoor pets. The shavings are stored in metal bins with doors at the bottom.

According to Western World’s complaint, on the night of July 12, 2018, “apparently as a result of smoldering wood shavings inside the bin, the storage bin ignited, creating a fire that subsequently spread through the Sunbelt Shavings property.” The fire burned throughout the night of July 12, and it was finally extinguished in the early morning hours of July 13, 2018.

Three years later, on July 13, 2021, Western World, as the subrogee of Sunbelt, sued KC Welding for breach of contract and negligence related to the fire.

Western World alleged that Sunbelt employees “discovered that KC Welding employees were welding on the storage bin that had not been emptied” of the wood chips. Upon this discovery, Sunbelt employees asked the KC Welding employee to “leave the premises immediately, and the Sunbelt employees attempted to soak the area where he had been working with water.”

KC Welding moved to dismiss Western World’s case as untimely. The company argued that under Mississippi case law, a claim accrues on the day all elements are present, which it said was July 12, 2018.

Western World maintained 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 and the elements of both causes of actions were not present until July 13, 2018.

On May 2, 2022, the trial court granted KC Welding’s motion to dismiss “due to the applicable statute of limitations.” Western World appealed.

Mississippi code states that all actions for which no other period of limitation is prescribed shall be commenced within three years next after the cause of such action accrued, and not after. In its appeal, Western World maintained 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 high court said the specific facts of this case indicate that the cause of action accrued on July 12, 2018, and not when the blaze was extinguished some five to six hours later on July 13, 2018. Therefore, Western World had until July 12, 2021, to bring a timely claim against KC Welding.

The law also provides for latent injuries and the discovery rule: “In actions for which no other period of limitation is prescribed and which involve latent injury or disease, the cause of action does not accrue until the plaintiff has discovered, or by reasonable diligence should have discovered, the injury.”

Western World maintained the trial court erred by determining that the fire was not a latent injury. The insurer said that the discovery rule applied to toll the accrual of its action. Western World asserted that “in situations where a fire destroys or causes damage to certain property and the cause is not immediately known, whether the property owner has suffered a legal injury . . . is not always apparent while the structure is still burning.”

However, the high court rejected the notion that the inability to immediately know the cause of the fire created a latent injury. The high court noted that it has previously held that “’causes of action accrue upon discovery of the injury, not discovery of the injury and its cause.” Knowledge of the cause of the injury is irrelevant to the analysis, the court said.

“The fact that Western World did not know every precise detail about the fire on July 12, 2018, does not show a latent injury nor did it toll the statute of limitations,” the court stated.

Therefore, the court ruled, the fire was not a latent injury that would require the statute of limitations to be tolled.