Insurance Claims And Limitations

Here is an insurance policy case from the Tyler Court of Appeals issued in October 2021.  The opinion is styled Irajabedinia v. Lighthouse Property Insurance Company.
This is a homeowners claim for coverage after Hurricane Harvey.  The damage occurred on August 28, 2017.  The claim was timely filed and Lighthouse paid in a letter dated October 13, 2017.  Plaintiff believed the claim was underpaid but did not do anything else until January 28, 2019, when a letter was sent to Lighthouse pursuing the claim further.  On March 14, 2019, Lighthouse responded saying the claim had already been paid and the file was closed.  Later, on October 1, 2019, Plaintiff’s attorney sent a more formal demand for coverage.
On December 3, 2019, Plaintiff demanded an umpire be appointed which was done on December 9, 2019.  Lighthouse refused to participate, stating that limitations had passed on October 14, 2019.  Plaintiff filed suit on December 30, 2019.
Lighthouse moved for summary judgment based on limitations and the trial court granted the motion.  This appeal followed.
A defendant moving for summary judgment on the affirmative defense of limitations has the burden to conclusively establish that defense.
The statute of limitations for a breach of contract claim is four years from the date the cause of action accrued pursuant to Texas Civil Practices & Remedies Code, Section 16.051.  However, Section 16.070(a) allows the parties to a contract to shorten the time as long as it is not less than two years.
Here, the insurance contract shortens the limitations period to two years and one day from the date the claim is accepted or rejected.
Lighthouse accepted the claim on October 13, 2017, thus, the limitations period ran on October 14, 2019.  Accordingly, Plaintiff knew the facts in existence authorizing him to seek judicial remedy at that time.
The relevant provision of the insurance contract did not start on the date of loss, but on the date of acceptance or rejection of the claim.  Therefore, a claim such a Plaintiff’s would not accrue until Lighthouse allegedly breached the contract by accepting and underpaying the claim, which would afford him two years and one day to file suit from the accrual under Texas law.
There is no evidence that Lighthouse strung Plaintiff along without denying or paying the loss.
The Court denied Plaintiff’s claim and based on limitations, affirmed the trial court summary judgment in favor of Lighthouse.
The relevance to be taken from this case relates to the ability of an insurance company to shorten the normal four year statute of limitations from four years to a period of not less than two years.
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