INSURANCE-RELATED COURT CASES
Digested from case reports published online
COURT DECISIONS
UIM claim was filed untimely
On February 16, 2016, Melissa Keller and her daughter Caroline Keller, then a minor, were involved in an automobile accident that occurred when their vehicle was hit by Xavier Blanchard, who ran a red light. Melissa and Caroline both suffered injuries. Xavier’s vehicle was owned by his father, Harvey Blanchard. Both the Kellers and Blanchard were insured by State Farm Mutual Automobile Insurance Company.
On January 8, 2018, the Kellers filed a complaint against the Blanchards, alleging negligence and wantonness. The complaint did not state any claim against State Farm. On January 26, 2023, the Kellers settled their claims with the Blanchards and subsequently filed an “Amended Complaint for Underinsured Motorist Coverage” against State Farm on January 27, 2023. By this time Caroline had reached the age of majority.
The statement of facts in the new complaint asserted that the Blanchards had coverage of $50,000 per person and $100,000 per accident. It further asserted that the full limits of that coverage had been tendered in January 2023, that the plaintiffs’ claims exceeded $50,000 per person, that the plaintiffs had been inadequately compensated by the settlement, and that the Blanchards therefore were underinsured. The new complaint asserted that Keller’s own policy with State Farm included underinsured motorist coverage and that she and her daughter were entitled to recovery under the policy.
State Farm moved to dismiss the new complaint, arguing that it was filed outside the six-year statute of limitations period applicable to contract-based claims. The insurer contended that the claim did not relate to the original complaint, as Keller knew or should have known that State Farm was her insurer. Keller, on the other hand, argued that her claim for underinsured motorist coverage did not accrue until the date she settled with the Blanchards.
The trial court denied State Farm’s motion to dismiss on June 12, 2023, without making specific findings of fact or law. State Farm thereafter petitioned the court for a writ of mandamus that directed the trial court to dismiss Keller’s underinsured motorist claim against it. Keller appealed.
The court pointed out that Keller had the right to join State Farm as a defendant in her suit against the Blanchards brought in January 2018. Instead, Keller waited until January 27, 2023—nearly seven years after the date of the accident—to state any claim against State Farm.
Keller urged the court to disregard Ex parte State Farm on the basis that it addressed only relation-back issues and was not of precedential value regarding the date of the accrual of the cause of action.
The Supreme Court of Alabama held that the accrual date for a direct uninsured/underinsured motorist claim against an insurer is the date of the accident. Because Keller did not assert her direct claim for underinsured motorist benefits against State Farm until more than six years after the date of the accident, that claim was time barred.
Ex parte State Farm Mutual Automobile Insurance Company v. Harvey Blanchard, Xavier Blanchard, and State Farm Mutual Automobile Insurance Company—Supreme Court of Alabama—No. SC-2023-0528—April 5, 2024.
