Zalma on Insurance
Education • Business
Insurance Claims professional presents articles and videos on insurance, insurance Claims and insurance law for insurance Claims adjusters, insurance professionals and insurance lawyers who wish to improve their skills and knowledge. Presented by an internationally recognized expert and author.
Interested? Want to learn more about the community?
April 16, 2025
Judgment for Insurer Because Suit Filed Late

Private Limitation of Action Provision Defeats Suit Against Insurer
Post 5049

See the full video at https://lnkd.in/gUFvU7-h and at https://lnkd.in/gH4KgkRd and at https://zalma.com/blog plus more than 5000 posts.

This case involves a contractual statute of limitations in an insurance policy. Sidney and Shatika Davis (together, “Davis”) argue the trial court erroneously granted summary judgment in favor of Homeowners of America Insurance Company (“HAIC”).

In Sidney Davis And Shatika Davis v. Homeowners Of America Insurance Company, No. 05-24-00035-CV, Court of Appeals of Texas, Fifth District, Dallas (April 7, 2025) because: (i) the contractual limitations period was valid (ii) the limitations was not tolled, (iii) HAIC did not breach the contract by failing to pay the amounts claimed, and (iv) HAIC addressed the fraud claim in its summary judgment motion.

BACKGROUND

HAIC issued an insurance policy for the Davis property (the “Property”). The Policy includes a contractual limitations period that requires suit to be filed by the earlier of two years and one day from the date the claim is accepted or rejected by HAIC or three years and one day from the date of the loss.

HAIC’s independent adjuster (the “IA”) met with the Davis contractor to inspect the Property. The inspection revealed hail damage to the roof, gutters/downspouts, and a storage shed. No interior damage was claimed or found. Additionally, inspection of the attic revealed foam insulation in the attic on the underside of the roof decking and framing. The foam insulation was intact, fully adhered, and undamaged and Davis did not claim that the foam insulation was damaged by the storm.

HAIC accepted the Claim on November 20, 2017 based on the IA’s findings which estimated $19,662.75 for storm damage repairs to the roof, gutters/downspouts, and shed. HAIC issued payment on the Claim in the amount of $6,612.75.

On March 1, 2018, HAIC issued a supplemental payment of $11,591.53 on the Claim. In issuing the supplemental payment, HAIC made clear that the payment was based on the contractor’s higher estimate and its position on coverage for foam insulation remained unchanged.

Davis attempted to invoke appraisal sometime between March 14, 2018, and April 27, 2018. There is no evidence that either party followed through or attempted to timely pursue, engage in, or complete the appraisal process in 2018 or 2019.

In an August 5, 2020 e-mail to Davis’s counsel, HAIC declined to reopen the Claim for further action because the appraisal request was made outside the two-years-and-one-day period required by the Policy for filing suit.

Davis sued HAIC on August 5, 2020, asserting claims for breach of contract, anticipatory breach, violations of the Insurance Code and Deceptive Trade Practices Act (“DTPA”), breach of the duty of good faith and fair dealing, fraud, and conspiracy. The court entered an order granting HAIC’s summary judgment motion on limitations in its entirety and dismissing the case with prejudice.

ANALYSIS

The Contractual Limitations Period

Davis argued the contractual limitations period is invalid because it has the effect of imposing a limitations period of less than two years as proscribed by the Texas code.

Generally, the limitations period for a breach of contract cause of action is four years after the day the cause of action accrues. In the context of insurance policies, insurance provisions that limit the time within which to file a suit to two years and a day are valid and binding.

The two-year period expired before the three-year period, and therefore, the two years and a day provision applied. Moreover, even if the three-year period applied, Davis’s August 5, 2020 suit was not timely filed.
Did the Supplemental Payment or the Appraisal Process Toll Limitations?

Appraisal under an insurance policy involves a contractual process by which the insurer and the insured select third parties to determine the amount of a claimed loss when the insurer and the insured cannot agree what the amount of loss.

In the present case, the November 20, 2017 letter was an unambiguous denial of coverage for foam insulation.

An insurer’s consideration of additional information from the insured after denying coverage does not alter the finality of an otherwise unambiguous decision to deny coverage.

Although Davis adduced no evidence to controvert HAIC’s denial of his claim for foam insulation on November 20, 2017, he suggests that limitations began to run when HAIC made the supplemental payment on March 1, 2018. The supplemental payment, however, did not include payment for the foam insulation and HAIC made clear that its position on that aspect of the Claim remained unchanged. The supplemental payment did not restart the limitations period and even if the limitations period began to run on March 1, 2018, Davis would have been required to file suit by March 2, 2020, and his August 5, 2020 petition is still untimely.

The nature of the appraisal process is such that it would typically not come into play until a claim is denied. With the claim denied there would be no disputed amount to appraise.

CONDITION PRECEDENT

A condition precedent in a contract is an event which must occur or an act that must be performed before a right can accrue to enforce an obligation. A cause of action for breach of contract does not accrue until all conditions precedent to the parties’ right to file suit have been satisfied. Therefore, the insurer’s interpretation of the Policy to require performance of the condition precedent before a cause of action accrues is not unreasonable.

The evidence shows that the Policy condition requiring demand for appraisal was met. The undisputed evidence established that, at best, the appraisal process was demanded but never commenced.

THE FRAUD CLAIM.

HAIC specifically identified fraud as one of Davis’s claims, and throughout the motion argued that the Policy’s limitations period applied to all of Davis’s claims. Since the breach of contract claim was time barred by the Policy’s two years and a day limitations period the extra-contractual claims were also time barred.

The judgment of the trial court was AFFIRMED.

ZALMA OPINION

As the court clearly stated an insurance policy is a contract. Failure to comply with a policy condition – file suit within two years and one day – is clear, unambiguous and enforceable. HAIC established that the suit was filed more than two years and one day after the claim was unambiguously denied for amounts greater than that already paid. Every policyholder and policy holder lawyer that wishes to sue an insurer must read and understand the policy and when it has a private limitation of action provision must file suit before the limitation provision expires.

(c) 2025 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 to my substack at https://barryzalma.substack.com/subscribe

Go to X @bzalma; Go to Newsbreak.com https://www.newsbreak.com/@c/1653419?s=01; Go to Barry Zalma videos at Rumble.com at https://rumble.com/account/content?type=all; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg

Go to the Insurance Claims Library – https://lnkd.in/gwEYk

00:10:32
Interested? Want to learn more about the community?
What else you may like…
Videos
Posts
20 hours ago
Allegations That Establish Breach of a Condition Defeats Suit

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 ...

00:08:31
June 02, 2025
Zalma’s Insurance Fraud Letter – June 1, 2025

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 ...

00:08:42
placeholder
May 30, 2025
Plain Language of Policy Enforced

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 ...

00:06:50
May 15, 2025
Zalma's Insurance Fraud Letter - May 15, 2025

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 ...

May 15, 2025
CGL Is Not a Medical Malpractice Policy

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 ...

April 30, 2025
The Devil’s in The Details

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...

post photo preview
See More
Available on mobile and TV devices
google store google store app store app store
google store google store app tv store app tv store amazon store amazon store roku store roku store
Powered by Locals