Case Bulletin – Pennsylvania Supreme Court holds that statute of limitations for an uninsured motorist claim begins to run upon “an alleged breach of a contractual duty” by the insurer.
Erie Ins. Exch. v. Bristol., No. 124 MAP 2016 (Pa., Nov. 22, 2017).
In July 2005, Michael Bristol was injured in a hit-and-run accident while working as a lineman for RCC, Inc. RCC was insured though a policy issued by Erie Insurance that contained an Uninsured/Underinsured Motorist Coverage Endorsement. That endorsement contained an arbitration clause.
Bristol, through his attorney, notified Erie of his uninsured motorist (UM) claim in June 2007. Erie then reserved its rights and both parties selected arbitrators. The arbitration proceedings eventually stalled as a result of Bristol’s unrelated incarceration.
In September 2012, Erie filed a declaratory-judgment action in the Montgomery County Court of Common Pleas—and ultimately a motion for summary judgment—asking the Court to dismiss Bristol’s action on the ground that the applicable four-year statute of limitations started to run on the date of the accident. The trial court granted Erie’s motion, and the Superior Court affirmed, concluding that “the statute limitations for [Bristol’s] UM claim began to run on the date of the accident.”
The Supreme Court granted allowance of appeal to resolve this statute-of-limitations question. Justice Mundy, writing for the majority, began her analysis by observing that the applicable statute of limitations (42 Pa. Cons Stat. § 5502(a)) located the starting point for computation at “the time the cause of action accrued.” Acknowledging that the question of when an UM claim accrues was one of first impression in Pennsylvania, the Court observed that the majority view in other jurisdictions is that a claim accrues on “the date of any breach by the insurer.”
The Court ultimately adopted that view, and in doing so, concluded that Erie’s public-policy arguments-—about the negative effects of insured’s delaying submission of UM claims—did “not justify departing from the normal breach of contract principles attendant to triggering the statute of limitations.” As the Court explained, “[a]bsent a compelling public policy ground or legislative intent, we conclude there is no reason to create a special rule for determining when the statute of limitations starts to run in UM cases.” The Court reversed the order of the Superior Court because Bristol’s UM claim had not yet accrued—Erie had not yet denied his claim, or refused to arbitrate it.
Justice Wecht filed a dissenting opinion on the ground that Bristol had waived any argument about when the statute of limitations started to run because he never advanced such an argument in the trial court. As Justice Wecht explained, Bristol’s only arguments in the trial court were (1) that he notified Erie of his intent to pursue a UM claim within four years of the date of the accident, and (2) that the four-year statute of limitations was tolled by his filing for arbitration. According to Justice Wecht, by asserting these arguments, “Bristol conceded that the applicable limitations period commenced on the date of the alleged vehicle accident.” Justice Wecht suggested that the Court “commit to clear standards for determining whether a particular case warrants departure from our ordinary issue preservation doctrines”