Pennsylvania Supreme Court Clarifies When Statute of Limitations Begins to Run in Uninsured (UM) Motorists Benefits Claim

In the case of Bristol v. Erie, No. 124 MAP 2016 (Pa. Nov. 22, 2017) (Maj. Op. by Mundy, J.) (Wecht, J., Dissenting) the Pennsylvania Supreme Court held that the statute of limitations in an uninsured motorist case does not begin to run until there is an alleged breach of the insurance contract, i.e., the denial of a claim or a refusal to arbitrate.

 This was a 6-1 decision with Justice David Wecht dissenting on procedural grounds.

The Court delineated the specific issue before it as involving the question of when the statute of limitations begins to runs for a court action in an uninsured (UM) motorist claim arising out of an automobile insurance policy containing an arbitration agreement.

The Pennsylvania Supreme Court noted that this was an issue of first impression.

The Bristol decision reverses the Pennsylvania Superior Court's previous ruling in Hopkins v. Erie, which held that the statute of limitations in an uninsured motorist (UM) benefits claim begins to run on the date of the accident.

In its analysis, the Pennsylvania Supreme Court noted that the mandates of Pennsylvania statute of limitations law provide that the statute of limitations begins to run from the time a cause of action accrues or arises.

The Supreme Court noted that a cause of action in a UM context accrues or arises when a carrier is alleged to have breached its contract of insurance.  The Court more specifically held that an uninsured motorist (UM) claim begins when a carrier denies the claim or refuses to arbitrate.

Given that the carrier had not denied coverage or refused to arbitrate in this particular case, the court ruled that the lower courts had erred in granting summary judgment in favor of the carrier on its statute of limitations argument.

The Majority Opinion from Bristol can be read HERE.

Justice Wecht's Dissenting Opinion can be viewed HERE.

I send thanks to Attorney Scott Cooper for bringing this case to my attention.

Eastern District Federal Court Addresses Statute of Limitations For UM Claims

In the recent case of Liberty Mutual Fire Ins. Co. v. Weisbaum, No. 10-3869 (E.D. Pa. 2011 Schiller, J.), Judge Berle M. Schiller handed down a decision on the rarely seen statute of limitations issue with respect to an uninsured (UM) motorists benefits claim.

In this matter, Liberty Mutual filed a declaratory judgment action seeking a declaration that the claimant was not entitled to UM coverage because the claimant failed to bring his claim before the statute of limitations expired.

The court reaffirmed principle that "[u]nder Pennsylvania law, a UM claim is subject to the four-year statute of limitations for contract claims."  In this regard, the court cited State Farm Mut. Auto. Ins. Co. v. Rosenthal, 484 F.3d 251 (3d Cir. 2007), Boyle v. State Farm Mut. Auto. Ins. Co., 456 A.2d 156, 160-162 (Pa. Super. 1983), and 42 Pa.C.S.A. Section 5525(a)(8).

The court in Liberty Mutual v. Weisbaum also stated that "[a] UM claim accrues when the insured:  (1) is involved in a motor vehicle accident, (2) is injured in the accident, and (3) knows or reasonably should have known of the uninsured status of the owner or operator of the other vehicle involved in the accident." (Citing Clark v. State Farm Mut. Auto. Ins. Co., 599 A.2d 1001, 1005 (Pa. Super.  1991).

In his Opinion, Judge Schiller noted that  the statute of limitations can be officially tolled by the filing of a Petition to Compel Arbitration (citing Boyle, 456 A.2d 162-163).

Interestingly, Judge Schiller stated that the appointment of arbitrators by the parties was not sufficient to automatically toll the statute of limitations (citing with "see" signal Walker v. Providence Ins. Co., Civ. A. No. 97-7455, 1998 WL 195652, at *3 (E.D. Pa. March 31, 1998)(holding that appointment of arbitrator did not toll statute of limitations on underinsured motorist claim)[other citation omitted].

The court separately found that the statute could be tolled where the carrier "fraudulently or deceptively lulled" the insured into inaction on the claim presented.  No such fraud or deception was found to exist in this matter.  Rather, the court found that the facts presented established that the carrier actively sought information from the insured on the UM claim presented and received little cooperation in response.

In ruling in favor of the carrier on the statute of limitations argument in this matter, the court also rejected the claimant's argument of the tolling of the statute of limitations based upon an implied contract to arbitrate as there was no authority to support such an argument.

Anyone desiring a copy of this decision in Liberty Mutual v. Weisbaum, may contact me at dancummins@comcast.net.

Source:  "Case Digests."  Pennsylvania Law Weekly