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Court of Appeal 2016 water damage loss time-barred



A federal appeals court ruled Thursday in favor of a Liberty Mutual Insurance Co. unit in a lawsuit filed by a restaurant seeking coverage for water damage, saying its claim was time-barred.

In August 2016, water intrusion at the China Grove restaurant in China Grove, North Carolina, caused damage to the facility and disrupted business operations, according to the ruling by the 4th US Circuit Court of Appeals in Richmond, Virginia, in Manoula LLC, d/b/a China Grove Restaurant, v. Ohio Security Insurance Co.

Manoula notified its insurer, Liberty Mutual unit Ohio Security, and took steps to determine the source of the water intrusion, stop further intrusion and remediate the effects, including hiring third-party contractors to excavate portions of the parking lot and the restaurant̵

7;s interior. said.

The company claimed that although it submitted proof of the loss in a timely manner, Ohio Security only made partial payments and did not pay the balance due under the policy, even though an insurance representative had notified it that it was fully covered and issued a partial payment for cleanup costs. According to the complaint, the damages exceeded $25,000, but more details were not disclosed.

Manoula sued Ohio Security in state court in June 2021, alleging breach of contract and violation of North Carolina’s Unfair Trade Practices Act.

The insurer moved the case to the US District Court in Winston-Salem, North Carolina, which ruled that the lawsuit was time-barred, and also dismissed the Unfair Trade Practices Act claim.

The 4th Circuit’s three-judge panel affirmed the ruling.

Manoula argued that North Carolina’s general three-year limitations period for breach of contract runs from the date of the breach of contract, and therefore its breach of contract claim was filed within that period, the ruling said.

“However, the district court rightly concluded that a separate three-year limitation period, which covers certain insurances and runs from the date of lossapplies here,” the court said, also affirming dismissal of the UTPA claim.

Attorneys in the case did not respond to requests for comment.

The 4th Circuit ruled earlier last week that an apartment complex owner seeking money to replace property damaged in a fire was too late, in a dispute over the relevant statute of limitations


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