Insurance Policy – Statute Of Limitations

Knowing the statute of limitations on a case is vital.  This is illustrated in a 2018, Southern District of Texas, Houston Division opinion styled, Lillian Smith v. Travelers Casualty Insurance Company of America.

Smith sued Travelers for violations of the Texas Deceptive Trade Practices Act (DTPS), Texas Insurance Code violations, and breach of contract.  Travelers filed a motion for summary judgment based on the statute of limitations.

The allegations in the case are that a lightening strike caused damage to Smith’s home and air conditioner.  The claim was reported on September 5, 2013, and acknowledged on September 7, 2013.  An investigation was conducted in September and October of 2013.  Travelers issued a denial letter on November 13, 2013.

Smith filed this lawsuit on January 25, 2016.

Travelers argued the statute of limitations had run.  Smith argued that the statute of limitations was tolled and thus the statute of limitations had not run.

Under Texas law, the party asserting that a claim is barred by the statute of limitations bears the burden of proof on this issue.  A defendant who seeks summary judgment on the basis of limitations must conclusively prove when the cause of action accrued.

Texas Civil Practices & Remedies Code, Section 16.004(a) says the statute of limitations for a breach of contract is four years from the day the action accrues.  However, Section 16.070(a) says the limitations period may be contractually modified as long as the period is at least two years.  The insurance policy issued by Travelers provides for a statute of limitations of “2 years and one day from the date the cause of action first accrues …”  This means Smith had two years and one day to file her breach of contract claim.

Smith argued statutes under the DTPA to extend the limitations period but did not recognize that those statutes have been repealed.  As to the Texas Insurance Code violations, pursuant to Section 541.162(a) states the limitations period is two years.

Because the statute of limitations began to run on the date the denial letter was issued, November 13, 2013, Travelers Motion for Summary Judgment was granted.