Lola Molnar appealed against decisions of the Fayette Circuit Court – the first of which dismissed her action against the appellant, Tack House Pub, LLC, on the grounds of limitations. In Lola Molnar v. Thank You House Pub, LLC, No. 2020-CA-1417-MR, Court of Appeal of Kentucky (August 13, 2021), the Court of Appeal was asked to execute an insurance company letter extending the state statute of limitations issued months after the charter had expired.
On 15 January 2020, Molnar brought an action against Tack House in Fayette Circuit Court, alleging that she had sustained injuries in a fall on its premises on 4 September 2018 and that her injuries were attributable to its negligence. Thank you House denied responsibility and soon after moved to dismiss Molnar's lawsuit due to restrictions. Specifically, Tack House noted the one-year limitation period applied to Molnar's claims; and that the date Molnar started her suit was well over a year after the injury.
In other places in his movement, however, Tack House also stated that it had contacted Molnar about what it considered to be premature in her statement; that Molnar had disagreed on the basis of a letter dated 17 December 2019 which she had received from Tack House's insurance company, Grange Insurance Company; and that it was expected that Molnar would try to avoid the effect of the limitation period based on Grange's letter. The letter, which Tack House attached as an exhibition to his motion to dismiss, provided in the relevant part: “After careful consideration of the facts of this loss, it is our position that our insured [Tack House] is not legally liable. In the absence of legal liability, we would not be entitled to pay; therefore, we must deny this assertion. The limitation period expired on 09/04/2019. The time limit for bringing an action will be extended by 30 days from the date you received this letter . [Emphasis added by the Court]
A Kentucky Charter enables written agreements entered into in good faith and with a length of arms to extend time limits for bringing an action are valid and enforceable under their terms.
Granges' stated intention – both in his letter and according to what his appointed representative testified at a hearing on July 6, 2020 before the district court in this matter – was to give Molnar the "gift" an additional "30 days from the date [she] few [19459062"thisletter"tobringanactionagainstitsinsuredTackHouse
After it had already sent Molnar its letter of 17 December 2019, but Grange realized that it put his own insured at potential risk. There is no indication that Grange ever consulted Tack House before deciding to make this "gift"; that Tack House has ever consented to it; or that – at least until after Molnar brought the action in this matter – Grange explained to someone why it had sent the letter of 17 December 2019.
The district court found that the charter was not applicable because:
- no proof of registration stated that Molnar had cause to bring an action outside the applicable limitation period; and
- in the opinion of the district court, the charter did not authorize the parties to contractually "extend" a statutory time limit that had already expired.
The Court of Appeal found that it was significant that there was no evidence that the plaintiff had adversely invoked. any action by the respondent Tack House Pub, LLC or against any action by Grange or its employees. On 17 December 2019, the letter was sent more than three months after the one-year period after the plaintiff's case had passed. When the letter was sent to the plaintiff by Grange, there was thus nothing to extend because the plaintiff's time to file a lawsuit had expired.
The Court of Appeal found that the charter was clear and unambiguous. There was nothing in plain language that would enable a court to conclude that the plaintiff's limitation period could be extended after it had expired. When reading the simple language of the charter, a customs agreement to extend any limitation periods can only be entered into when there is actually something left that can be extended. In this case, the limitation period had expired. There was thus nothing to extend.
Thank you House's position, adopted by the district court, is that there was no such "agreement". Molnar's argument is one of statutory interpretation. She argues that since the Charter does not specifically state that the "contract" it envisages is a "contract" requiring "consideration", no consideration was required. to do so would lead to an absurd result or a completely unreasonable conclusion. The Court of Appeal must assume that the General Assembly was aware of the status of the law, including the general law when it adopted the statute.
A promise to extend a limitation period, in order to be enforceable under the Charter, requires either harmful dependency or some other consideration. Therefore, there was nothing wrong with the district court's assessment that Grange's letter of 17 December 2019 to Molnar – which undoubtedly lacked consideration, and which Molnar (who had already missed the deadline for submitting a summons) could not have disregarded – failed to qualify as an enforceable agreement. Therefore, the decision of the district court was confirmed.
The plaintiffs claimed that a "gift" from an insurer gave three months after the expiration of the limitation period extended the limitation period. The argument reasonably failed because the insurer at the time made its "gift" that there was no limitation period to extend, nor did the insured, the person against whom a claim had been made, even know of the "gift" or agree to extend it. a statute of limitations that has already expired? Insurers have great power to control a liability claim, but they do not have the authority to change the law or enter into an agreement that removes the insured's right without consideration.
© 2021 – Barry Zalma
Barry Zalma, Esq., CFE, now limits his practice to working as an insurance consultant specializing in insurance coverage, insurance claims handling, bad faith insurance and insurance fraud almost as much for insurers and policyholders.
He also acts as an arbitrator or mediator for insurance-related disputes. He practiced law in California for more than 44 years as an insurance and claims management attorney and more than 54 years in the insurance industry.
He is available at http://www.zalma.com and email@example.com. Mr. Zalma is the first recipient of the first annual Claims Magazine / ACE Legend Award. For the past 53 years, Barry Zalma has devoted his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to enable insurance companies and their claims staff to become insurance professionals.
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