Beverly Smith v. Citadel Insurance Company as Successor to Gramercy Insurance Company and Goauto Insurance Company

Summary

The Louisiana Supreme Court held that a first‑party bad‑faith claim against an insurer is a contractual action subject to the ten‑year liberative prescription of La. C.C. art. 3499, because the insurer’s duty of good faith is an outgrowth of the insurance contract. The Court also affirmed that such a claim may be assigned under La. C.C. art. 2642, and therefore Ms. Smith’s claim was timely. The district court’s overruling of GoAuto’s prescription exception was affirmed.