Claim and Suit Time Barred by Private Limitation of Action
Post number 5370
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Suit Fails Because the Plaintiffs Ignored the Policy’s Private Limitation of Action
In Shree Ugtai Express, Inc. d/b/a Hollday Express Shop v. West Bend Insurance Company, No. 1:26-cv-01050-STA-jay, United States District Court, W.D. Tennessee, Eastern Division (June 9, 2026) Shree Ugtai Express, Inc., doing business as Holladay Express Shop, sued West Bend Insurance Company for wrongful denial of insurance benefits after property damage allegedly caused by a burst water heater pipe on December 25, 2022.
The insurance policy required any suit to be brought within two years of the date of direct physical loss or damage. Plaintiff filed its complaint in Tennessee state court on December 17, 2024, which was within that two-year period.
FACTS
However, although a summons issued the same day, it was never served and never returned. Plaintiff did not obtain an alias summons until February 6, 2026, more than one year later. Plaintiff also asserted a statutory bad-faith claim under Tennessee law, alleging that it had made a formal demand on December 7, 2023 and that West Bend failed to pay within sixty days.
LAW
Under Tennessee Rule of Civil Procedure 3, filing a complaint commences an action for statute-of-limitations purposes, but if process is not served within 90 days, the plaintiff cannot rely on the original filing date to toll the statute unless new process is obtained within one year of the prior process (or filing, if no process issued).
Tennessee law also permits insurance policies to impose contractual limitations periods, and such provisions are enforceable. Here, the policy imposed a two-year contractual limitations period for the breach-of-contract claim.
For the bad-faith claim under Tenn. Code Ann. § 56-7-105, Tennessee courts apply a one-year statute of limitations, which begins to run sixty days after formal demand or upon refusal to comply with the demand.
DISCUSSION / ANALYSIS
The court held that Plaintiff’s filing of the complaint on December 17, 2024 did not toll the limitations period because Plaintiff failed to comply with Rule 3. The original summons was issued on the filing date but was never served or returned within ninety days, and Plaintiff did not obtain new process within one year. Because the alias summons was not issued until February 6, 2026, Plaintiff could not rely on the original filing date as the commencement date.
As a result, the breach-of-contract action was deemed commenced, at the earliest, on February 6, 2026, which was outside the policy’s two-year limitations period running from the December 25, 2022 loss. The breach-of-contract claim was time-barred.
The same procedural failure doomed the bad-faith claim. Because the complaint filing did not toll the statute, the bad-faith claim also was not timely commenced within its one-year statute of limitations, which had accrued no later than sixty days after the December 7, 2023 demand. Thus, that claim too was barred as a matter of law.
CONCLUSION
The court granted West Bend’s motion to dismiss. It held that Plaintiff failed to comply with Tennessee Rule 3, so the complaint did not toll the limitations periods. Consequently, the breach-of-contract claim was not commenced within the policy’s two-year limitations period, and the bad-faith claim was not commenced within the applicable one-year statute of limitations. Both claims were dismissed with prejudice.
In summary, the failure to comply with Tenn. R. Civ. P. 3 means that the filing of the complaint did not toll the statute of limitations. Accordingly, the the breach of contract claim was not commenced within two years of the loss, and the bad faith claim was not commenced within one year of accrual. Defendant’s motion to dismiss was GRANTED, and Plaintiff’s claims were dismissed with prejudice.
ZALMA OPINION
Whenever a person insured is unhappy with an insurer’s claims handling and decides to sue the insured and the insured’s counsel must first read the insurance policy to determine if it contains a private limitation of action provision limiting the time available to sue different from state statutes of limitations. Shree Ugtai Express, Inc’s counsel first filed suit within the two year limit but failed to serve it promptly and fell to the private limitations of action because state law did not recognize the suit until it was served. The lesson is don’t sit on your rights or you will lose them.
(c) 2026 Barry Zalma & ClaimSchool, Inc.
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Policy Limits Demand Accepted Settles Claim
Post 5434
Posted on August 26, 2026 by Barry Zalma
See the full video at https://lnkd.in/g-ZtsSgK and at https://lnkd.in/ghMBdYWR
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FACTUAL BACKGROUND
Archer rear-ended Kathleen Ann Wood at a red light, causing Wood to assert a bodily injury claim against him. Wood’s counsel sent Farmers a pre-litigation settlement demand offering to resolve Wood’s claim for the available policy limits, stating that if the $100,000 demand exceeded the policy, the offer was for the policy limits.
Farmers timely responded in writing, agreed to pay Wood the $15,000 per-person policy limit, and provided the requested ...
Policy Limits Demand Accepted Settles Claim
Post 5434
Posted on August 26, 2026 by Barry Zalma
See the full video at https://lnkd.in/g-ZtsSgK and at https://lnkd.in/ghMBdYWR
A Contingent Offer Accepted Ends the Dispute
In Farmers Insurance Exchange, a California Reciprocal Insurance Exchange, The Superior Court For The County Of San Bernardino, Kathleen Ann Wood, E087128, California Court of Appeals, (July 9, 2026) Farmers Insurance Exchange insured Doyle Archer under an automobile policy with bodily injury limits of $15,000 per person and $30,000 per accident.
FACTUAL BACKGROUND
Archer rear-ended Kathleen Ann Wood at a red light, causing Wood to assert a bodily injury claim against him. Wood’s counsel sent Farmers a pre-litigation settlement demand offering to resolve Wood’s claim for the available policy limits, stating that if the $100,000 demand exceeded the policy, the offer was for the policy limits.
Farmers timely responded in writing, agreed to pay Wood the $15,000 per-person policy limit, and provided the requested ...
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Posted on July 22, 2026 by Barry Zalma
See the full video at https://lnkd.in/gWQQEySW and at https://lnkd.in/gyhdK6wv
This is a Fictionalized True Crime Story of Insurance Fraud explaining why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The story is one of a collection designed to help 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.
This is a Fictionalized True Crime Story of Insurance Fraud explaining why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The story is one of a collection designed to help 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.
After ...
Referral of Claims to its SIU Is Not Bad Faith
Post 5487
Posted on September 10, 2026 by Barry Zalma
In WIZ Collision, LLC, on behalf of itself and as assignee of Jawara Small, Chester Street LLC, and Aziz Brooks v. GEICO Corporation, No. 25-cv-4201 (KAM)(JAM), United States District Court, E.D. New York (August 28, 2026) Wiz Collision, a New York City auto-body shop, regularly repaired vehicles and submitted insurance claims for customers. It alleged that GEICO repeatedly approved claims and repairs, then referred certain claims to its Special Investigations Unit, stopped issuing payments, and delayed resolution despite ultimately finding no fraud.
Wiz Collision sued on its own behalf and as purported assignee of three customers, asserting contract, good-faith, consumer-protection, and injunctive claims. GEICO removed the case and moved to dismiss under Rule 12(b)(6).
LAW
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CONVICTION
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Post 5486
Posted on September 9, 2026 by Barry Zalma
Mr. Baiyewu Is Liable For The Loss Resulting From Acts Directly Attributable To Him And For The Loss Resulting From The Reasonably Foreseeable Acts Of Others Taken In Furtherance of the Criminal Activity
In United States Of America v. Oluwasegun Baiyewu, CRIMINAL No. 21-395 (RAM), United States District Court, D. Puerto Rico (August 26, 2026) the court dealt with a case after on October 20, 2021, a grand jury in the District of Puerto Rico returned a single-count Indictment charging Mr. Baiyewu with conspiracy to commit money laundering, in violation of 18 U.S.C. § 1956(h). About a year and a half later, on March 31, 2023, a grand jury returned a single-count Superseding Indictment charging Mr. Baiyewu and four co-defendants with conspiracy to commit money laundering, in violation of 18 U.S.C.
CONVICTION
Baiyewu was convicted by a jury of conspiracy to commit money laundering under 18 U.S.C. § 1956(h). The charged conspiracy, ...
