Private Limitations of Action Provision of Policy Defeats Late Law Suit
Barry Zalma
Aug 11, 2023
Read the full article at https://lnkd.in/g2zYPjtD and see the full video at https://lnkd.in/gmVG6xze and at https://lnkd.in/giq-n7Ck at https://zalma.com/blog plus more than 4550 posts.
Knox Mediterranean Foods, Inc. (Knox) appealed the trial court’s grant of Appellee Amtrust Financial Services (Amtrust)’s motion for traditional summary judgment on Amtrust’s affirmative defense of limitations. In one issue, Knox contends that summary judgment was improper because there was a genuine issue of material fact as to when its claim accrued.
In Knox Mediterranean Foods, Inc. v. Amtrust Financial Services, No. 05-21-00296-CV, Court of Appeals of Texas, Fifth District, Dallas (July 28, 2022) the Court of Appeals interpreted the private limitations of action provision in the Amtrust policy.
BACKGROUND
Knox owns and operates a restaurant in Dallas, Texas. Knox purchased an insurance policy from Amtrust that covered various losses, including theft. The policy provides that any claim for breach of the policy must be brought “within two years and one day from the date the cause of action accrues.” The policy defines accrual of a cause of action as “the date of the initial breach of [Amtrust’s] contractual duties as alleged in the action.”
On June 16, 2016, Knox was burgled. Knox submitted a claim to Amtrust under the policy and provided a list of damaged and stolen property. On March 15, 2017, Amtrust issued a check to Knox in the amount of $8,547.65, along with a letter from an Amtrust claim adjuster stating that the check covered stolen camera equipment. On June 13, 2017, Amtrust sent a follow-up letter. This letter states, in relevant part: “We have requested supporting documentation for the other items you claimed multiple times. At this time, it has become apparent you do not intend to provide any additional documentation. Pursuant to my letter of 3/15/2017 we are closing this claim for possible contents damage with no additional payment.”
On May 20, 2020, almost three years later, Knox filed suit against Amtrust. Amtrust defended claiming that Knox’s claims were barred by the private limitations of action provision set forth in the policy. Amtrust argued that Knox’s cause of action accrued on June 13, 2017 when Amtrust notified Knox that it was “closing this claim for possible contents damage with no additional payment.”
The trial court entered a written order granting summary judgment and ordering that Knox take nothing on its claims.
DISCUSSION
While Knox’s brief wholly fails to cite the record, the record comprises 425 pages, roughly 300 of which is the insurance policy. The sole issue in this appeal required the Court of Appeals to consider whether Amtrust’s June 13 letter constituted a denial of Knox’s claim. That letter is a little over a page long and easily located in the record.
LIMITATIONS
The time in which a plaintiff must file suit is defined, as the name suggests, by statute. Parties may contract for a shorter limitations period, provided that the contractual limitations period is not shorter than two years.
A cause of action accrues, and the limitations period begins to run when facts come into existence that authorize a party to seek a judicial remedy. In first-party insurance actions, the insured’s cause of action accrues when the insurer denies a claim.
There is no dispute that the insurance policy at issue sets a limitations period of two years and one day from the date of accrual. Although an insurer’s denial must be in writing to trigger the statute of limitations, there are no magic words that must be used to deny a claim. Any statements or activity on the part of the insurance company after the fact involving the claim do not forestall or renew the limitations period.
When an insurer denies a claim, its mere willingness to reconsider that denial does not restart the limitations period.
Therefore, Amtrust’s June 13 letter to Knox unequivocally communicated a decision to deny coverage.
Amtrust established as a matter of law that Knox’s claim accrued-and the contractual limitations period began to run-on June 13, 2017. Because Knox filed this lawsuit on May 20, 2020, nearly three years after its claim accrued, its claim was time-barred.
ZALMA OPINION
The covenant of good faith and fair dealing applies to the insurer and the insured equally. When an insured fails or refuses to prove its loss it leaves the insurer no choice but to deny the claim rather than continue to beg the insured to fulfill its promises. Since Knox did nothing for almost three years after it was told Amtrust would pay no more its suit was time barred.
(c) 2023 Barry Zalma & ClaimSchool, Inc.
Please tell your friends and colleagues about this blog and the videos and let them subscribe to the blog and the videos.
Subscribe and receive videos limited to subscribers of Excellence in Claims Handling at locals.com https://zalmaoninsurance.locals.com/subscribe.
Consider subscribing to my publications at substack at https://barryzalma.substack.com/publish/post/107007808
Go to Newsbreak.com https://www.newsbreak.com/@c/1653419?s=01
Follow me on LinkedIn: www.linkedin.com/comm/mynetwork/discovery-see-all?usecase=PEOPLE_FOLLOWS&followMember=barry-zalma-esq-cfe-a6b5257
Daily articles are published at https://zalma.substack.com. Go to the podcast Zalma On Insurance at https://podcasters.spotify.com/pod/show/barry-zalma/support; 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\
Please tell your friends and colleagues about this blog and the videos and let them subscribe to the blog and the videos.
Consider subscribing to my publications at substack at https://lnkd.in/gcZKhG6g
Go to Newsbreak.com https://lnkd.in/g8azKc34
Follow me on LinkedIn: https://lnkd.in/guWk7gfM
Go to the Insurance Claims Library – https://lnkd.in/gBPMEyqr
Notice of Claim Later than 60 Days After Expiration is Too Late
Post 5089
Injury at Massage Causes Suit Against Therapist
Read the full article at https://lnkd.in/gziRzFV8, see the full video at https://lnkd.in/gF4aYrQ2 and at https://lnkd.in/gqShuGs9, and at https://zalma.com/blog plus more than 5050 posts.
Hiscox Insurance Company (“Hiscox”) moved the USDC to Dismiss a suit for failure to state a claim because the insured reported its claim more than 60 days after expiration of the policy.
In Mluxe Williamsburg, LLC v. Hiscox Insurance Company, Inc., et al., No. 4:25-cv-00002, United States District Court, E.D. Missouri, Eastern Division (May 22, 2025) the trial court’s judgment was affirmed.
FACTUAL BACKGROUND
Plaintiff, the operator of a massage spa franchise, entered into a commercial insurance agreement with Hiscox that provided liability insurance coverage from July 25, 2019, to July 25, 2020. On or about June 03, 2019, a customer alleged that one of Plaintiff’s employees engaged in tortious ...
ZIFL – Volume 29, Issue 11
The Source for the Insurance Fraud Professional
Posted on June 2, 2025 by Barry Zalma
Post 5087
See the full video at and at
Read the full article and the full issue of ZIFL June 1, 2025 at https://zalma.com/blog/wp-content/uploads/2025/05/ZIFL-06-01-2025.pdf
Zalma’s Insurance Fraud Letter – June 1, 2025
See the full video at https://lnkd.in/gw-Hgww9 and at https://lnkd.in/gF8QAq4d, and at https://zalma.com/blog plus more than 5050 posts.
ZIFL – Volume 29, Issue 11
The Source for the Insurance Fraud Professional
Read the full article and the full issue of ZIFL June 1, 2025 at https://lnkd.in/gTWZUnnF
Zalma’s Insurance Fraud Letter (ZIFL) continues its 29th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year by ClaimSchool and is written by Barry Zalma. It is provided FREE to anyone who visits the site at ...
No Coverage if Home Vacant for More Than 60 Days
Failure to Respond To Counterclaim is an Admission of All Allegations
Post 5085
See the full video at https://lnkd.in/gbWPjHub and at https://lnkd.in/gZ9ztA-P, and at https://zalma.com/blog plus more than 5050 posts.
In Nationwide Mutual Insurance Company v. Rebecca Massey, Civil Action No. 2:25-cv-00124, United States District Court, S.D. West Virginia, Charleston Division (May 22, 2025) Defendant Nationwide Mutual Insurance Company's (“Nationwide”) motion for Default Judgment against Plaintiff Rebecca Massey (“Plaintiff”) for failure to respond to a counterclaim and because the claim was excluded by the policy.
BACKGROUND
On February 26, 2022, Plaintiff's home was destroyed by a fire. At the time of this accident, Plaintiff had a home insurance policy with Nationwide. Plaintiff reported the fire loss to Nationwide, which refused to pay for the damages under the policy because the home had been vacant for more than 60 days.
Plaintiff filed suit ...
ZIFL Volume 29, Issue 10
The Source for the Insurance Fraud Professional
See the full video at https://lnkd.in/gK_P4-BK and at https://lnkd.in/g2Q7BHBu, and at https://zalma.com/blog and at https://lnkd.in/gjyMWHff.
Zalma’s Insurance Fraud Letter (ZIFL) continues its 29th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year by ClaimSchool and is written by Barry Zalma. It is provided FREE to anyone who visits the site at http://zalma.com/zalmas-insurance-fraud-letter-2/ You can read the full issue of the May 15, 2025 issue at http://zalma.com/blog/wp-content/uploads/2025/05/ZIFL-05-15-2025.pdf
This issue contains the following articles about insurance fraud:
Health Care Fraud Trial Results in Murder for Hire of Witness
To Avoid Conviction for Insurance Fraud Defendants Murder Witness
In United States of America v. Louis Age, Jr.; Stanton Guillory; Louis Age, III; Ronald Wilson, Jr., No. 22-30656, United States Court of Appeals, Fifth Circuit (April 25, 2025) the Fifth Circuit dealt with the ...
Professional Health Care Services Exclusion Effective
Post 5073
See the full video at https://lnkd.in/g-f6Tjm5 and at https://lnkd.in/gx3agRzi, and at https://zalma.com/blog plus more than 5050 posts.
This opinion is the recommendation of a Magistrate Judge to the District Court Judge and involves Travelers Casualty Insurance Company and its duty to defend the New Mexico Bone and Joint Institute (NMBJI) and its physicians in a medical negligence lawsuit brought by Tervon Dorsey.
In Travelers Casualty Insurance Company Of America v. New Mexico Bone And Joint Institute, P.C.; American Foundation Of Lower Extremity Surgery And Research, Inc., a New Mexico Corporation; Riley Rampton, DPM; Loren K. Spencer, DPM; Tervon Dorsey, individually; Kimberly Dorsey, individually; and Kate Ferlic as Guardian Ad Litem for K.D. and J.D., minors, No. 2:24-cv-0027 MV/DLM, United States District Court, D. New Mexico (May 8, 2025) the Magistrate Judge Recommended:
Insurance Coverage Dispute:
Travelers issued a Commercial General Liability ...
A Heads I Win, Tails You Lose Story
Post 5062
Posted on April 30, 2025 by Barry Zalma
"This is a Fictionalized True Crime Story of Insurance Fraud that explains why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The story is designed to help everyone to Understand How Insurance Fraud in America is Costing Everyone who Buys Insurance Thousands of Dollars Every year and Why Insurance Fraud is Safer and More Profitable for the Perpetrators than any Other Crime."
Immigrant Criminals Attempt to Profit From Insurance Fraud
People who commit insurance fraud as a profession do so because it is easy. It requires no capital investment. The risk is low and the profits are high. The ease with which large amounts of money can be made from insurance fraud removes whatever moral hesitation might stop the perpetrator from committing the crime.
The temptation to do everything outside the law was the downfall of the brothers Karamazov. The brothers had escaped prison in the old Soviet Union by immigrating to the United...
