INSURANCE-RELATED COURT CASES
Digested from case reports published online
COURT DECISIONS
Unhappy motorist
On February 3, 2018, Teresa Rose was injured when the vehicle she was driving was struck by an underinsured motorist. Rose was commuting to her workplace in Omaha, Nebraska, from her home in Carter Lake, Iowa, where she lived with her sister, Shauna Bosques.
At the time of the collision, Rose had an Iowa driver’s license but did not own a vehicle. The car in which she was struck was borrowed from her boyfriend, Christopher Stark. Stark was a Nebraska resident, and the car was licensed and registered in the state of Nebraska. Stark lent the car to Rose approximately every other weekend so she could commute to work.
After the collision, Rose was hospitalized for several days. She ultimately settled with the auto insurer of the at-fault motorist for the liability limit of $25,000 and settled with Stark’s auto insurer for the underinsured motorist limit of $25,000. Rose claimed underinsured motorist benefits under an American Family auto policy issued to Rose’s sister, Shauna.
The policy extended coverage to certain relatives of Bosques. The Carter Lake residence was owned by the father of Rose and Shauna. The policy was issued in Iowa. It contained a “choice of law” provision that stated: “Any disputes as to the coverage provided or the provisions of this policy will be governed by the laws of the state shown in the Declarations as your residence.” The residence in the declarations showed the Iowa address of the Carter Lake residence.
On November 15, 2019, American Family determined that Rose had been fully compensated by her prior settlements and denied her claim for underinsured motorist benefits.
Rose sued American Family in the district court for Douglas County, Nebraska, on September 3, 2020. American Family moved for summary judgment based on a limitations of action provision in the policy regarding underinsured motorist coverage that stated: “any suit against [American Family] will be barred unless commenced within two years from the date of the accident.” American Family asserted that Iowa law applied to the policy and that the two-year contractual limitation in the policy barred Rose’s action.
The district court concluded that, under Iowa law, Rose’s claim was time barred. The district court granted American Family’s motion for summary judgment and dismissed the action. Rose appealed.
On appeal, Rose contended that because this matter flowed from an auto accident, Nebraska’s four-year statute of limitations for torts controlled the outcome of this case. The supreme court disagreed.
Under the law of Iowa at the time the policy was executed, the two-year limitation period was reasonable. The time limitation did not require Rose to wait to bring her underinsured motorist suit, and under Iowa law she could have pursued her underinsured motorist claim simultaneously with her claim against the at-fault motorist. The supreme court affirmed the order of the district court.
Rose v. American Family Insurance Company—Nebraska Supreme Court—October 6, 2023—No. S-22-898. n
