Tuesday, July 23, 2019

Carrier Need Not Show Prejudice to Enforce Limitations of Action Provision

In the case of Mail Quip v. Allstate Ins. Co., No. 19-223 (E.D. Pa. May 23, 2019 Kenney, J.)(Mem. Op.), the court held that a carrier was not required to show prejudice to enforce a suit limitations provision of the policy.

In this case, the Plaintiff sued the carrier for breach of the insurance contract and for bad faith.  Allstate filed a motion to dismissed based upon its two year limitation of actions provision in the policy.  The Plaintiff had filed suit almost four years after the loss.

The federal district court noted that there was no Pennsylvania Supreme Court precedent on point but that the Third Circuit had issued decisions predicting that the Pennsylvania Supreme Court would rule that a showing of prejudice was not required for a carrier to enforce its limitation of actions provision.  As such, this court followed that precedent and dismissed the claims.

The court additionally held that the Plaintiff's bad faith claims were also barred by the two year statute of limitations applicable to those types of claims.

Anyone wishing to review this decision may click this LINK.

Source: Article:  "Court:  Insurer May Enforce Policy's Suit Limitations Provision" by Steven A. Meyerowitz in the Pennsylvania Law Weekly (June 18, 2019).

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