State high court rules against insurer over statute of limitations

A divided Mississippi Supreme Court on Thursday decided against an insurer in coverage litigation over a fire, ruling it had filed its lawsuit a day late.

On July 12, 2018, Shuqualak, Mississippi-based Sunbelt Shavings LLC asked that an employee of Shuqualak-based KC Welding LLC come to repair the door of a box containing wood chips, according to the ruling in Western World Insurance Group as subrogee of Sunbelt Savings LLC, Shuqualak Lumber Co. Inc., and Wood Carriers Inc. KC Welding welded the box containing the wood chips.

Later that night, a fire started on Sunbelt’s property and was extinguished on July 13. Three years later, on July 13, 2021, Western World, as subrogee of Sunset, Shuqualak Lumber and Wood Carriers, sued KC Welding in state court for breach of contract and negligence.

KC Welding argued the insurer’s lawsuit was “untimely” because it was filed a day past when the statute of limitations expired. The court agreed, and dismissed the case.

A state supreme court majority agreed with the lower court in a 5-3 ruling. Western World’s “knowledge of a fire on July 12, 2018, and the facts surrounding KC Welding’s actions on the Sunbelt property earlier that day provide Western World with the requisite knowledge for a cause of action to accrue, causing the statute of limitations to begin running on July 12, 2018,” it said, in ruling against the insurer.

The dissenting opinion states, “that the legal injury was latent during the time the ongoing conflagration precluded investigation of the fire’s origin” and the statute of limitations began to run the day the fire was extinguished, on July 13, 2018.

Attorneys in the case did not respond to requests for comment.