A hail injury case in Oklahoma was unnecessarily lost because a breach of contract lawsuit was not filed on time. It serves as an example that policyholders and public adjusters should immediately refer cases to competent legal counsel as soon as a denial letter is issued by the insurance company.
The Oklahoma case1 was decided yesterday and had the following facts:
The plaintiff and the defendant entered into a property insurance agreement in July 2018. During the term of the agreement, five of the plaintiff’s properties were allegedly damaged by hail on April 17, 2019. The plaintiff filed a claim for the alleged damage, but the defendant contested the claim on June 5, 2020. The plaintiff later filed suit suit on August 2, 2021 – more than two years after the alleged hail damage – alleging breach of contract and bad faith. However, the parties’ insurance agreement contains the following provision: “[n]O [o]ne may bring legal action against us under this coverage section unless . . . [t]The action is brought within 2 years of the damage from which the direct physical damage occurred.”
Looking at the court records, I noted that the denial letter was sent to the policyholder’s public adjuster. Best practices require public adjusters to immediately suggest that the policyholder seek legal assistance as soon as a letter of coverage is sent. There may have been a perception that Oklahoma extended the statute of limitations due to Covid-19 orders from the Insurance Commissioner.
Regardless, the court ruled against the policyholder:
Although defendant argues that the Insurance Commissioner lacked authority to extend the contractual statute of limitations, the court need not reach this argument. That is because, although the bulletins could extend the parties’ two-year statute of limitations, the third bulletin abrogated the relevant part of the earlier bulletin. As explained above, the first bulletin extended the “applicable deadline for non-payment of premiums by an additional forty-five (45) days”, and the second bulletin “cancels[ed] all deadlines for reporting damage during the duration of the emergency declaration and extend[ed] any policyholder rights or benefits related to time limits until 90 days after the end of the state of emergency.’ The last bulletin later repealed the first and second bulletins, except that ‘[t]the extended deadline [for nonpayment of premiums] . . . [and] [t]the duration of extended claim reporting periods, which are given to insureds according to the original bulletin, [were] may expire when the extension ends.’ This is not a case involving either non-payment of premiums or the claim period. And even assuming that the phrase “any policyholder’s rights or benefits related to time limits” included the parties’ contractual limitations period, the Third Bulletin revoked that extension effective June 2020. Thus, the Court concludes that Plaintiff “cannot rely on the current bulletins to support an extension of the statute of limitations.’
I can understand that the policyholder could have relied on the extensions and they would not be revoked retroactively. It is indeed a harsh and unfortunate result.
Deadlines for filing lawsuits are important. This post is to remind policyholders and public adjusters to always know when that deadline will occur.
Dream up big, hairy, bold goals that you’re passionate about and pursue them relentlessly. You have to start with the end goal in mind, knowing that a goal is a dream with a deadline.
1 Concept Ventures v. Navigators Specialty Ins. Co.No. CIV-21-00845 (WD Okla. May 24, 2023).