The Virginia Supreme Court recently clarified that, even if the suit limitation in a standard fire insurance policy incorporates the language required by Virginia Code, the suit limitation language is not subject to statutory tolling of statutory limitation periods. In Allstate Property and Casualty Ins. Co. v. Ploutis, 2015 Va. LEXIS 109 (Sept. 17, 2015), the insured claimed water damage to his home, which occurred on March 19, 2010. On March 6, 2012, the insured sued Allstate for breach of contract, but then at the request of the Plaintiff, the original action was nonsuited. The insured then filed suit again on August 21, 2013.
Allstate filed a demurrer arguing that the 2013 action was barred by the suit limitation provision in the policy, stating that “No one may bring an action against us . . . unless . . . the action is commenced within two years after the inception of the loss or damage.” In response, the insured argued that a specific section of the Virginia Code (Code § 8.01-229(E)(3)) allowed tolling of “the statute of limitations” (emphasis added) for nonsuited actions.
The circuit court denied Allstate’s demurrer. The circuit court reasoned that the insurance policy incorporated the suit limitation provision included in the 172 lines of standard provisions for fire insurance policies cited in Virginia’s Code § 38.2-2105(A), and therefore essentially adopted “the Virginia statute of limitations for fire insurance policies.” The Virginia Supreme Court reversed, stating that the circuit court’s description of the Code section incorporating the 172 lines as “the Virginia statute of limitations for fire insurance policies” was “faulty.” The Virginia Supreme Court stressed that the Code provision itself “does not bar” the insured’s action. Rather, the insured voluntarily entered into a contract that included a contractual suit limitation provision. Concluding that the insured failed to file suit in accordance with the policy terms, the Virginia Supreme Court entered final judgment in favor of Allstate.
The Virginia Supreme Court recognized that this is not the first time that an insured has unsuccessfully argued that the inclusion of statutory language in a fire insurance policy converts the contractual suit limitation period into a statute of limitations. (citing Bocchino v. Nationwide Mutual Fire Ins. Co., 246 Conn. 378 (Conn. 1998)). In deciding Ploutis, Virginia joins the majority view on this issue