Limitation of Actions Provision in Property Insurance Policy Upheld and Applied to Dismiss Claim

In the case of Gonzales v. Nazareth Mut. Ins. Co., No. 412-CV-2019 (C.P. Monroe Co. July 13, 2020 Williamson, J.), the court upheld a limitation of action provision contained in a property insurance policy.

According to the Opinion, the Plaintiff owned a rental property that was insured by the carrier. After the Plaintiff discovered damage on the property, a claim was submitted to the insurance carrier for a recovery. The carrier denied the claim because the damage had been caused by a former tenant, which loss was not covered under the policy. 

Over two (2) years later, the Plaintiff filed an initial action against the carrier alleging bad faith. A year after that, the Plaintiff sought to amend the Complaint to add a breach of contract action.

The Defendant carrier filed a Motion for Judgment on the Pleadings in which it argued that the bad faith claim was untimely because the policy contained a two (2) year statute of limitations provision. 

The court agreed and granted the Motion for Judgment on the Pleadings. The court noted that the addition of a breach of contract claim would not necessarily create an additional cause of action because the bad faith claim was based upon the same facts and theory as the breach of contract claim. The court upheld and found the two (2) limitation period contained in the insurance policy to be valid. 

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Source: “Digest of Recent Opinions.” Pennsylvania Law Weekly (Aug. 18, 2020).