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October 25, 2022
SLOTH IN LITIGATION FATAL TO CASE

No UM/UIM Coverage Supports Denial & Starts Running of Limitations
Barry Zalma

Read the full article at https://www.linkedin.com/pulse/sloth-litigation-fatal-case-barry-zalma-esq-cfe and see the full video at https://rumble.com/v1p2adq-sloth-in-litigation-fatal-to-case.html and at
and at https://zalma.com/blog plus more than 4350 posts.

In Glenna L. Novak And Estate Of Jeffery Leonard Novak, A/K/A Estate Of Jeffery L. Novak By And Through Glenna L. Novak, Executrix v. Mutual Benefit Insurance Company, No. 1592 MDA 2021, No. J-S23016-22, Superior Court of Pennsylvania (October 14, 2022) when the plaintiffs lawyer admitted a letter was a denial of a UM/UIM claim that denial started the running of the statute of limitations.

Glenna L. Novak and the Estate of Jeffrey Leonard Novak (collectively “Appellants”) appealed from the order granting summary judgment in favor of Mutual Benefit Insurance Company (“MBIC”).

FACTS

In June 2011, Jeffrey Leonard Novak (“Decedent”) was operating a motorcycle when a vehicle driven by Roy E. Wright made a left turn across Decedent’s lane of travel, causing the motorcycle to strike the vehicle. Decedent was thrown from his motorcycle and sustained injuries, including severe head trauma, which resulted in death.

Appellants sought recovery from Wright, who had an insurance policy through Progressive Specialty Insurance Company (“PSIG”). Wright’s policy had a bodily injury limit of $50,000, which PSIG tendered. Appellants also submitted a claim for underinsured motorist (“UIM”) coverage under Decedent’s motorcycle policy (“motorcycle policy”). The motorcycle policy was issued by Progressive Advanced Insurance Company (“PAIC”). PAIC informed Appellants that Decedent had rejected UIM coverage. Appellants sued, contending the UIM rejection was ineffective, and they eventually reached an agreement to resolve the suit for $20,000.

Appellants’ counsel wrote to MBIC, which had issued insurance on two of Appellants’ other vehicles, a car and a truck, seeking consent to settle the two claims. In a letter dated October 3, 2012, MBIC stated the motorcycle that Decedent was driving at the time of the accident was not insured by MBIC. Therefore, MBIC explained, UIM coverage was not available under its policy and its consent was not required for settlement.

Appellants later made a claim to MBIC for UIM coverage under the personal auto policy. MBIC denied UIM coverage, stating it had previously denied coverage in the October 2012 letter, when it explained that its consent was unnecessary for the settlements. Appellants sued in February 2018 (six years after the first denial), and they filed a complaint in May 2019. They alleged breach of contract, sought a declaratory judgment, and requested damages for bad faith.

MBIC ultimately filed a motion for summary judgment arguing, in part, that Appellants’ claims were barred by the statute of limitations.

DISCUSSION

Appellants maintain the accrual date for the action could not have occurred before August 2017, when they submitted a UIM claim to MBIC. Appellants contended that an unsolicited opinion or observation by an insurer that it may or may not have coverage applicable to a particular matter is different from an insurer processing a claim affirmatively stated and submitted by an insured to the insurer for action and denying that insured the specific benefits claimed.

Pennsylvania law provides for a four-year statute of limitations on breach of contract actions and related declaratory judgment actions. In this case the trial court concluded the limitations period began to run when MBIC denied coverage in the October 2012 letter and therefore the current case, commenced in 2018, was barred by the statute of limitations.

It cannot genuinely be disputed that MBIC denied coverage of the subject accident by letter dated October 3, 2012. Although Appellants had not yet made a claim under their MBIC Policy, a plain reading of the 2012 letter makes clear that MBIC was denying coverage for the subject accident. In order to file a timely breach of contract claim, Appellants should have filed their action no later than October 3, 2016, which they did not do.

Therefore, the Court of Appeal concluded that Appellants’ claims were untimely, and summary judgment should be entered in favor of MBIC on all claims.

The October letter stated that UIM coverage is not available under the policy. Even Appellants’ counsel admitted that upon receipt of the letter in 2012, he interpreted the letter as a denial of coverage. Therefore, the record supported the finding of a concession by counsel and an obvious failure to sue timely which defeated the suit.

ZALMA OPINION

When the lawyer for the plaintiff concedes that there was a denial in 2012 and the suit was not filed until 2018 he has conceded the statute of limitations applied and the suit was untimely probably because he agreed there was no coverage under the MBIC policy. When a plaintiff has a viable cause of action against an insurer there is no excuse for failing to sue within a four year statute of limitations.

(c) 2022 Barry Zalma & ClaimSchool, Inc.

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 54 years in the insurance business. He is available at http://www.zalma.com and [email protected] and receive videos limited to subscribers of Excellence in Claims Handling at locals.com https://zalmaoninsurance.locals.com/subscribe.Subscribe to Excellence in Claims Handling at https://barryzalma.substack.com/welcome.
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Now available Barry Zalma’s newest book, The Tort of Bad Faith, and “How to Acquire, Understand, and Make a Successful Claim on a Commercial Property Insurance Policy: Information Needed for Individuals and Insurance Pros to Deal With Commercial Property Insurance” the New Books are now available as a Kindle book here, paperback here and as a hardcover here available at amazon.com.

Write to Mr. Zalma at [email protected]; http://www.zalma.com; http://zalma.com/blog; daily articles are published at
Zalma on Insurance
Insurance, insurance claims, insurance law, and insurance fraud .

By Barry Zalma

Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma; Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library

00:08:27
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See the full video at https://lnkd.in/gyxQfnUz and at https://lnkd.in/gAd3wqWP, and at https://zalma.com/blog plus more than 5150 posts.

Go to X @bzalma; Go to Barry Zalma videos at Rumble.com at https://lnkd.in/gRthzSnT; Go to Barry Zalma on YouTube- https://lnkd.in/g2hGv88; Go to the Insurance Claims Library – https://lnkd.in/gwEYk.
Interpleader Protects All Claimants Against Life Policy and the Insurer

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Read the full article at https://lnkd.in/gfbwAsxw, See the full video at https://lnkd.in/gea_hgB3 and at https://lnkd.in/ghZ7gjxy, and at https://zalma.com/blog plus more than 5150 posts.

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This appeal arises from a coverage dispute under a Directors & Officers (D&O) insurance policy. Jeffrey B. Scott, the plaintiff-appellant, was terminated from his role as CEO, President, and Secretary of Gemini Financial Holdings, LLC in October 2019. Following his termination, Scott threatened legal action against Gemini, and ...

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Read the full article at https://lnkd.in/gfbwAsxw, See the full video at https://lnkd.in/gea_hgB3 and at https://lnkd.in/ghZ7gjxy, and at https://zalma.com/blog plus more than 5150 posts.

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When I finished my three year enlistment in the US Army as a Special Agent of US Army Intelligence in 1967, I sought employment where I could use the investigative skills I learned in the Army. After some searching I was hired as a claims trainee by the Fireman’s Fund American Insurance Company. For five years, while attending law school at night while working full time as an insurance adjuster I became familiar with every aspect of the commercial insurance industry.

On January 2, 1972 I was admitted to the California Bar. I practiced law, specializing in insurance claims, insurance coverage and defense of claims against people insured and defense of insurance companies sued for breach of contract and breach of the implied covenant of good faith and fair dealing. After 45 years as an active lawyer, I asked that my license to practice law be declared inactive ...

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When I finished my three year enlistment in the US Army as a Special Agent of US Army Intelligence in 1967, I sought employment where I could use the investigative skills I learned in the Army. After some searching I was hired as a claims trainee by the Fireman’s Fund American Insurance Company. For five years, while attending law school at night while working full time as an insurance adjuster I became familiar with every aspect of the commercial insurance industry.

On January 2, 1972 I was admitted to the California Bar. I practiced law, specializing in insurance claims, insurance coverage and defense of claims against people insured and defense of insurance companies sued for breach of contract and breach of the implied covenant of good faith and fair dealing. After 45 years as an active lawyer, I asked that my license to practice law be declared inactive and became a consultant and expert witness for lawyers representing insurers and lawyers ...

post photo preview
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See the full video at https://rumble.com/v6yd2z0-evidence-required-to-prove-breach-of-contract.html and at https://youtu.be/2ywEjs3hZsw, and at https://zalma.com/blog plus more than 5150 posts.

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