Loading ...
Sorry, an error occurred while loading the content.
 

The Rogak Report: 30 Mar 2007 **Uninsured Motorists - Statute of Limitations**

Expand Messages
  • Lawrence Rogak
    TIME LIMIT FOR FILING UM CLAIM DOES NOT BEGIN TO RUN UNTIL ADVERSE VEHICLE IS DECLARED UNINSURED Matter of Preferred Mut. Ins. Co. v. Rand and Laureano, 2007
    Message 1 of 1 , Mar 30, 2007
      TIME LIMIT FOR FILING UM CLAIM DOES NOT BEGIN TO RUN UNTIL ADVERSE
      VEHICLE IS DECLARED "UNINSURED"

      Matter of Preferred Mut. Ins. Co. v. Rand and Laureano, 2007 NY Slip
      Op 50625(U) (Supreme Court, Richmond County) (McMahon, J.)

      On May 31, 1998, a vehicle owned and operated by the respondent
      Melissa M. Rand was involved in a collision with a vehicle owned by
      Tracy Augustyne. Crystal Laureano was a passenger in Rand's vehicle.
      In two separate letters dated June 10, 1998, the respondents'
      attorney provided notice to Preferred Mutual Insurance Company of
      their uninsured/underinsured claim under Rand's policy. In a letter
      dated July 7, 1998, Preferred Mutual informed the respondents'
      attorney to forward copies of any legal papers and also instructed
      the respondents to complete and return "Notice of Intention to Make
      Claim" forms. It is undisputed that the respondents never completed
      and returned these forms, nor did they forward copies of any legal
      papers.

      In a letter dated October 27, 1998, Preferred Mutual informed the
      respondents' attorney that in light of the fact that Allstate
      Insurance Company had admitted coverage of the Augustyne vehicle, it
      was denying coverage under the Supplementary Uninsured/Underinsurance
      Motorists endorsement as the limit of that policy was $25,000 per
      person and $50,000 per accident for SUM coverage and Allstate's
      policy must at least equal that amount.

      The claimants commenced a personal injury lawsuit against Augustyne;
      however, Allstate ultimately denied coverage based on non-permissive
      use. After a hearing on September 6, 2006, the court found that the
      operator of the Augustyne vehicle did not have permission to use it.
      In an order dated September 14, 2006, this court dismissed the action
      of Rand v. Augustyne based on a determination of non-permissive use.

      On September 12, 2006, the respondents demanded arbitration of
      uninsured motorist benefits. Preferred Mutual commenced the instant
      proceeding to permanently stay arbitration on September 29, 2006.

      In support of the application, Preferred Mutual contended that the
      arbitration must be permanently stayed because the demand was made
      beyond the statute of limitations.

      The Court wrote, "Claims made under the uninsured motorist
      endorsement of automobile insurance policies are governed by the six-
      year statute of limitations applicable to contract actions (see,
      Matter of De Luca, 17 NY2d 76, 78 [1966]); Jenkins v. State Farm Ins.
      Co., 21 AD3d 529 [2d Dept. 2005]). The claim accrues either when the
      accident occurred or when the allegedly offending vehicle thereafter
      becomes uninsured (see, Matter of Allstate Ins. Co. v. Giordano, 108
      AD2d 910 [2d Dept. 1985], affd. on opinion below 66 NY2d 810 [1985];
      Matter of Allstate Ins. Co. v. Torrales, 186 AD2d 647 [2d Dept.]). As
      the respondents' demand was made more than six years after the
      accident date, they are required to come forward with legally
      sufficient proof that a later accrual date applies, and that they
      diligently sought to determine whether the offending vehicle was
      insured on the date of the accident (Matter of Allstate Insurance Co.
      v. Morrison, 267 AD2d 381 [2d Dept. 1999])."

      "Contrary to Preferred Mutual's contention, the respondents have
      established that the later accrual date of the court's determination
      that the Augustyne vehicle was driven without permission should
      apply. The record establishes that less than six months after the
      accident, the respondents ascertained that the offending vehicle was
      covered by an insurance policy issued by Allstate. Additionally, the
      respondents commenced an action against the alleged tortfeasor within
      the statute of limitations. Throughout the discovery phase of the
      litigation, Allstate did not disclaim liability or deny coverage but
      instead chose to defend Augustyne. The question of non-permissive use
      was vigorously contested, requiring a hearing prior to trial. Not
      until the court determined that the Augustyne vehicle was driven
      without permission, did the offending vehicle become uninsured (see,
      Rowell v. Utica Mut. Ins. Co., 77 NY2d 636, 640 [1991]); Matter of
      Liberty Mutual Ins. Co., 271 AD2d 534 [2d Dept. 2000]). Accordingly,
      there could be no demand for uninsured motorist benefits until after
      such determination was made (see, Matter of Allstate Ins. Co. v.
      Giordano, 108 AD2d 910, supra; Matter of Liberty Mutual Ins. Co., 271
      AD2d 534, supra; see also, Rose v. Hartford Ins. Co., 9 AD3d 402 [2d
      Dept. 2004])."

      "In the alternative, Preferred Mutual asserts that it is entitled to
      deny coverage because the respondents breached a condition of
      coverage under the policy (see, New York Central Mutual Fire Ins. Co.
      v. Aguirre, 7 NY3d 772 [2006]; Matter of New York Central Mutual Fire
      Ins. Co. v. Gonzalez, 34 AD3d 816 [2d Dept. 2006]). Preferred Mutual
      alleges that the respondents should have completed and returned a
      sworn 'Notice of Intention to Make Claim' form and should have
      provided copies of the legal papers concerning the personal injury
      action. This argument is flawed because Preferred Mutual denied
      coverage for underinsurance benefits in 1998. Once coverage was
      denied on that claim, there was no reason for the respondents to
      complete a 'Notice of Intention to Make Claim' form or to provide the
      legal papers. After the respondents demanded arbitration of uninsured
      benefits, it was the obligation of Preferred Mutual to furnish such
      forms within 15 days. However, instead of providing the forms, it
      denied coverage by commencing this proceeding. Thus, the respondents
      cannot be said to have breached any condition of coverage under the
      policy."

      The Petition was dismissed and the case moves to UM arbitration

      Comment: The determination of whether an offending vehicle
      is "uninsured" can come about in several ways. Often there is a
      framed issue hearing, and the court's determination may wind up
      setting the date, thus starting the clock ticking. In this case, the
      offending vehicle did have insurance, but became "uninsured" the
      moment that Supreme Court determined that its use at the time of the
      accident was non-permissive. At that moment, the statute of
      limitations countdown began.

      Larry Rogak
    Your message has been successfully submitted and would be delivered to recipients shortly.