Suit Limitation

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Although we cover a wide variety of topics and issues on this blog, one issue that recurs with some frequency is the appropriate application of suit limitation provisions that are found in most property policies. The latest case to confirm that suit limitation provisions are valid and enforceable, and to highlight the peril an insured may encounter by not recognizing or addressing those provisions during the course of a claim, is Consolidated Rail Corp. v. Aspen Spec. Ins. Co., et al., 2019 WL 2417704 (D.N.J. June 10, 2019). That case involved a dispute between Consolidated Rail Corporation, otherwise known as “Conrail,” and Hudson Specialty Insurance Company (among other defendants), one of Conrail’s three excess layer insurance carriers.
Continue Reading The District of New Jersey Affirms Application of Suit Limitation Provision in Train Derailment

The terms and conditions of the Standard Flood Insurance Policy (“SFIP”) are specified by regulations promulgated under the National Flood Insurance Act (“NFIA”). One of the terms in the SFIP provides that the insured cannot sue the flood carrier unless the insured has complied with all requirements of the policy and the insured must “start the suit within one year after the date of the written denial of all or part of the claim, and . . . file the suit in the United States District Court of the district in which the covered property was located at the time of the loss.”

The Fourth Circuit recently determined that an SFIP insured is time barred from filing suit if the date that the suit was filed in federal court is more than the allowable year specified in the SFIP even if the insured filed an action in state court within the one-year period. Woodson v. Allstate Ins. Co., Docket No. 16-1935 (May 3, 2017). In Woodson, the insureds suffered damages to their home as a result of Hurricane Irene, and submitted a claim to Allstate for flood damages pursuant to their SFIP.  Allstate denied the Woodsons’ claim for flood damage on February 28, 2012, and the Woodsons filed suit in in state court on February 27, 2013 alleging breach of contract, and violation of the North Carolina Unfair and Deceptive Trade Practices Act.
Continue Reading Suit Limitation Period In Standard Flood Insurance Policy Is Not Tolled By Filing In State Court: Hurricane Irene Claim Dismissed By Fourth Circuit

Suit limitation provisions in insurance policies shorten the statutory period of time that a plaintiff may bring a suit against an insurer for certain causes of action. A New York court recently held that an appraisal award issued a few months after the suit limitation expired was unenforceable where the insured failed to file suit before the suit limitation expired. MZM Real Estate Corp. v. Tower Ins. Co. of New York, 2017 N.Y. Misc. LEXIS 1292 (Apr. 7, 2017). MZM incurred damages as a result of Storm Sandy on October 29, 2012. The Tower insurance policy contained a typical suit limitation provision stating that no one may bring action against the insurer unless suit is filed within two years “after the date on which the direct physical loss or damage occurred.” In November 2012, Tower Insurance paid $4,000, the undisputed amount of the claim. On October 28, 2013, over a year after the date of the loss, MZM demanded appraisal. On February 2, 2015, an unsigned appraisal award was issued in the amount of $170,129. Tower refused to pay the appraisal award on various grounds, including that the award included amounts that were not covered by the insurance policy.
Continue Reading Appraisal Award Unenforceable Where Suit Limitation Period Expired Prior To Filing Suit: New York County Dismisses Storm Sandy Coverage Suit

We have previously featured New Jersey District Court decisions addressing “unequivocal” denials in the context of policies’ suit limitation provisions. In the latest, Ryan v. Liberty Mut. Fire Ins. Co., No. 14-6308 (WHW)(CLW), 2017 U.S. Dist. LEXIS 6716, at *3 (D.N.J. Jan. 17, 2017), the Court found Liberty Mutual’s letter explaining both covered and excluded damages to constitute a “clear and unequivocal” denial.

In Ryan, the day after their home was damaged by Hurricane Sandy, the Ryans notified Liberty Mutual of a claim for the damage.  Liberty Mutual sent an independent adjuster to the property and determined that it owed the Ryans $4,784.14 for covered damages. Liberty Mutual explained the payment of policy benefits in a November 30, 2012 letter, which the Ryans received on December 10, 2012. The letter explained that Liberty Mutual would not be issuing payment for damage to a living room wall because the Ryans had been paid for damage to the wall after a previous storm, and the inspection showed that they had not repaired the damage. The letter also stated that no coverage was available for flood-related damages. 
Continue Reading Unequivocal Denial: District of New Jersey Court Outlines What is Not Necessary

A recent New Jersey Federal District Court decision provides a good example of how an insurance policy’s Suit Limitation period may be “stopped” and “re-started” by equitable tolling during the adjustment of a property insurance claim

As we explained in an earlier post, New Jersey permits parties to an insurance contract to shorten (or…

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,…

The Second Circuit recently certified an important question to the New York State Court of Appeals, which, while presented in a remarkably straightforward manner, will likely have anything but a straightforward answer:

If a fire insurance policy contains

(1)  a provision allowing reimbursement of replacement costs only after the property was replaced and requiring the…

The statute of limitations for bringing suit against a property insurer may be far shorter for policies issued after May 17, 2011, under Florida law. As a Florida federal court recently explained in West Palm Gardens Villas Condo Assn v. Aspen Specialty Ins Co., 2012 U.S. Dist. LEXIS 104861 (S.D. Fla. June 25, 2012),…