INSURANCE-RELATED COURT CASES
Digested from case reports published online
COURT DECISIONS
Who wins dispute over UIM benefits?
Shane and Melissa Pelissier insured their automobile with GEICO General Insurance Company. Four and a half years after a motor vehicle accident with an underinsured driver, the plaintiffs filed suit against GEICO, whose policy required that any lawsuit filed by an insured against the defendant for damages caused by an underinsured motorist be filed within three years of the date of the accident. The trial court denied the motion and transferred three interlocutory appeal questions to the New Hampshire supreme court.
The plaintiffs sought compensation for damages arising out of a July 29, 2017, automobile accident. They asserted that the other driver was at fault. The plaintiffs filed suit against the alleged tortfeasor prior to the expiration of the three-year statute of limitations for personal injury claims. The plaintiffs maintained that it was not until November 2021 that they learned during discovery that the defendant’s policy limit was less than the plaintiffs’ accident-related medical expenses. The plaintiffs formally notified the defendant of their intent to file an underinsured motorist claim on November 5, 2021.
On November 30, 2021, the defendant denied the plaintiffs’ underinsured motorist claim, relying on the statute of limitations provision (hereinafter “contractual limitations provision”) in the plaintiffs’ policy that required the plaintiffs to file suit for underinsured motorist benefits within three years of the date of the accident.
On February 19, 2022—four and a half years after the accident but less than three months after the defendant denied their claim—the plaintiffs filed suit against the defendant seeking underinsured motorist benefits. The defendant moved for summary judgment, arguing that it was entitled to judgment as a matter of law because the plaintiffs failed to bring suit within three years of the date of the accident as required by the contractual limitations provision.
The trial court denied the defendant’s motion. The court reasoned that, because there was no breach of contract until the defendant’s purportedly wrongful denial of an underinsured motorist claim, the contractual limitations provision was unenforceable given that it could require insureds to file suit before a justiciable cause of action existed. Additionally, the court found that: (1) using the date of the accident as the triggering event for the contractual limitations provision was contrary to public policy and (2) a material factual dispute existed as to whether the plaintiffs could have discovered the policy limits of the alleged tortfeasor prior to the expiration of the contractual limitations period.
The defendant filed a motion for reconsideration. The trial court denied the motion; it nonetheless granted the defendant’s interlocutory appeal motion. The defendant prepared an interlocutory appeal statement, the trial court signed it, and the defendant submitted the statement to the New Hampshire superior court.
The plaintiffs argued that because the contractual limitations period could run before the insured’s legal claim against the insurer had accrued, the contractual limitations provision impermissibly restricted underinsured motorist coverage and was unenforceable. The court agreed.
The defendant argued that the contractual limitations provision did not violate the public policy underlying the uninsured motorist statute because it provided the plaintiffs the same rights they would have had if the tortfeasor had comparable liability coverage. The court disagreed.
Under the contractual limitations provision, a plaintiff injured by an underinsured motorist in effect will have less than three years in which to file suit against the insurer because the three-year period begins to run before the relevant “injury” occurs. Contrary to the defendant’s contention, the contractual limitations provision does not and cannot change when the cause of action for a suit for underinsured motorist benefits accrues.
Given that the court held that the contractual limitations provision at issue was unenforceable and therefore that summary judgment was not appropriate, the court need not reach the second interlocutory question: whether the trial court erred when it found that there was an issue of material fact as to whether the plaintiffs could have reasonably complied with the contractual limitations provision. The court answered the first and third questions in the negative, need not address the second, and remanded for further proceedings consistent with this opinion.
Shane Pelissier et al. v. GEICO General Insurance Company—Supreme Court of New Hampshire—No. 2022-0714—October 25, 2024.
