In the Montgomery County Court of Common Pleas Opinion of Hopkins v. Erie Insurance Company, No. 2010 - CV - 35352 (C.P. Montg. Co. Aug. 12, 2012 Carluccio, J.), Judge Carolyn T. Carluccio addressed the issue of the proper statute of limitation for a underinsured (UIM) claim.
This matter came before the court by way of the Plaintiff's Petition for the Appointment of Arbitrators and Request to Compel Arbitration. The Plaintiff had previously settled her claim against the tortfeasor in June of 2004.
According to the opinion, while the Plaintiff notified the carrier of the settlement at that time by letter and advised the carrier in that letter that she wished to pursue a UIM claim, the Plaintiff took no further action with respect to the UIM carrier other than submitting a demand letter in 2008. The opinion noted that, in addition to the Claimant's counsel speaking with an Erie claims representative about issues pertaining to an arbitration of the matter, Erie also requested medical records and authorizations from the Plaintiff. The opinion confirms that executed authorizations were provided to Erie, some of which were sent out by the carrier to request records.
In March of 2009, the carrier issued a letter to the insured advising that it was closing its file on the basis that the statute of limitations on the UIM claim had passed. The Plaintiff responded by filing the Motion at issue. That Motion was denied and an appeal filed, triggering the issuance of this Pa.R.A.P. 1925 Opinion from the trial court explaining its reasoning for the Superior Court's review.
According to its filings, the Plaintiff argued that the time period for the four year statute of limitations should have been deemed to commence running as of the date of the Plaintiff's 2008 demand letter.
After reviewing the applicable law, the court upheld its own denial of the Plaintiff's Petition for the Appointment of Arbitrators and Request to Compel Arbitration on the basis of the expiration of the statute of limitations. The court found that, under Pennsylvania law, since UIM claims were essentially contract claims, the four year statute of limitations for breach of contract claims applied. In this regard, the court relied upon Boyle v. State Farm Mut. Auto. Ins. Co., 456 A.2d 156, 159-160 (Pa.Super. 1983) and 42 Pa.C.S.A. Section 5525(a)(8).
This court noted in its opinion that there was no "governing precedent" as to when the statute of limitations begins to run in a UIM claim. Reviewing a series of Pennsylvania state and federal trial court opinions, the Hopkins court was persuaded to conclude (1) that the statute of limitations begins to run in a UIM claim when the underlying matter is concluded, and (2) that letters issued by counsel and negotiations with the UIM carrier were not sufficient to overcome the statute of limitations or to excuse plaintiff's counsel from the necessity of filing a petition for the appointment of arbitrators in order to preserve the claim.
Since more than four years had passed between the Plaintiff's settlement of the claim with the tortfeasor back in 2004 and the filing of the petition to appoint arbitrators in this matter, the court denied the Petition at issue as barred by the statute of limitations.
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I send thanks to the prevailing Attorney Joseph Walsh of the Lansdale, PA law firm of Walsh Pancio for bringing this decision to my attention.
It appears well-settled that the applicable statute of limitations for a UIM or UM claim is four years as those claims are considered to be based in contract.
Less settled, but apparently becoming more accepted, is the notion that the filing of a Petition to Compel Arbitration and/or a Petition to Appoint Arbitrators is the proper method to preserve a UM/UIM claim under a policy that calls for Arbitration to resolve any disputes on that type of claim.
Presumably, where the UIM policy instead requires a claimant to file a lawsuit in the court of common pleas as opposed to proceeding to an arbitration, a breach of contract Complaint alleging UIM claims should likewise be filed within four years of a settlement with, or a verdict against, a tortfeasor.
Note also that some UIM policies may provide that the UIM claim should be filed in conjunction with the lawsuit against the third party tortfeasor.
Some practitioners may elect in any event to file both negligence claim against the third party tortfeasor and the breach of contract UIM claim in the same Complaint in order to move forward on all claims at the same time.