INSURANCE-RELATED COURT CASES
Digested from case reports published online
COURT DECISIONS
Jet ski claim is time barred
The owner of A.C. Watercraft Rental, Sayed Mohammed, had sought liability insurance for all his business-owned watercraft through Farm Bureau Property and Casualty Insurance Company, which connected him with Great Divide Insurance Company. A Yamaha watercraft involved in a fatal accident was not listed in the policy schedule. After the accident, Mohammed filed a claim with Great Divide for defense and indemnification, which was denied because of the jet ski not being listed in the policy. Subsequently, the deceased’s father, Garbis Satamian, sued A.C. Watercraft, which had to bear its own defense costs.
The Superior Court in Maricopa County dismissed Satamian’s claims against Great Divide, Farm Bureau, and Risk Placement Services on the grounds that the statute of limitations had expired. The court found that A.C. Watercraft learned of the negligent procurement of insurance when Great Divide denied coverage in January 2016 and that it “sustained injury in May 2017, when [A.C. Watercraft] incurred attorneys’ fees and costs defending itself.” The court ruled that both the negligent procurement of insurance claim and the promissory estoppel claim were time barred because each accrued no later than May 2017, arguing that the discovery rule should have tolled the statute of limitations and that the claims could not have accrued until Satamian’s underlying action against A.C. Watercraft was final and non-appealable. The Arizona Court of Appeals rejected Satamian’s arguments and affirmed the lower court’s decision.
The Supreme Court of the State of Arizona affirmed the lower courts’ decisions, holding that the negligent procurement of insurance and promissory estoppel claims accrued when an insured incurs its own litigation costs for defense against a claim because of an insurer’s negligent failure to obtain insurance coverage. The court found that A.C. Watercraft knew or should have known both the “who” and the “what” of the negligent procurement cause of action by May 2017. The promissory estoppel claim began to accrue by May 2017 and expired by May 2020. Because Satamian filed this lawsuit in June 2021, both claims were time barred.
Satamian v. Great Divide Insurance Company—Supreme Court of the State of Arizona—No. CV-23-0085-PR—April 9, 2024.
