In July of 2013, the Court of Appeals of Kentucky made a breakthrough decision by claiming that one year contractual limitation on bringing a suit for uninsured or underinsured motorist insurance benefits was not reasonable. (See Riggs v. State Farm Mutual Automobile Insurance Co., 2103 WL 3778143 (Ky. App. 2013)). This case began on August 26, 2008. The plaintiff was a police officer who while on duty injured himself in a Kentucky automobile accident. He had UIM coverage. Id.
Nearly two years later on August 5, 2010, the Kentucky plaintiff filed a personal injury lawsuit alleging negligence. Id. Then on august 26, 2011, the Kentucky plaintiff amended his complaint to assert his claim for UIM benefits. Id. Prior to the personal injury trial, the defendant settled for the policy limits. This was communicated to the UIM carrier who waived its subrogation rights. The injured plaintiff continued with his UIM case. On December 2, 2011, the UIM carrier moved for summary judgment asserting the UIM claim was time barred. The Kentucky UIM clause stated in part that the UIM had to be commenced not later than two years after the injury, or death, or the last basic or added reparation payment made by any reparation obligor, whichever later occurs. Id.
The UIM action did not begin until 3 years after the Kentucky car accident occurred. The Kentucky UM/UIM car accident lawyer for the plaintiff argued that the two year contractual limitation was unreasonable. The trial court dismissed the case, but on appeal, this court for the following reasons agreed. Parties to an insurance contract may establish the time period in which an insured shall sue an insurance company for uninsured (UM) or UIM benefits, provided the limitation is reasonable. (cites omitted). There is a fifteen year statute of limitations for general actions on written contracts. Id. This court then said that absent a reasonable contractual limitation, the fifteen year statute applies rather than the two year tort statute of limitations. Id. Third, the court held that a one year contractual limitation on bringing a suite for UM or UIM benefits is not reasonable. Id.
The Kentucky UM/UIM car accident lawyer pointed out to this court that in 2001, the Western District of Kentucky federal court held that two year statute of limitations was not reasonable. (cites omitted). But, the defendant’s Kentucky UM/UIM car accident lawyer referred to a Sixth Circuit decision that upheld the two-year statute of limitations. But, this court did not agree with that ruling and declined to follow it. Rather, it cited to another case, where the Kentucky Supreme Court held “it illogical to adopt a general rule which would require a plaintiff to sue his own insurer before discovering whether or not the tort-feasor is in fact an uninsured (or underinsured) motorist.” (cites omitted). “Until an injured party files suit against the alleged tortfeasor and engages in discovery to ascertain the limits of the tortfeasor’s liability insurance, the injured party cannot determine whether the tortfeasor is indeed an underinsured motorist.” Thus, if a Kentucky auto accident injured party has to file a lawsuit against his own UM/UIM carrier just to protect itself against the possibility of not being fully covered by the wrongful BI carrier, this court noted that “to require the filing of a protective lawsuit is not only unreasonable, it is a waste of legal and judicial resources.” (cites omitted).
Thus, the court held that the two year statute of limitations set forth in KRS 304.39-230(6) to be unreasonable and that the fifteen-year statutory period for comme3ncing contract claims applies, and reversed and remanded this case.
If you have been the subject of a Kentucky UM/UIM car accident case, please call and speak to a Kentucky UM/UIM car accident lawyer at the Law Offices of Andrew Alitowski, P.A. at 888-ASK-ANDREW (888-275-2637) or contact us. We are available 24 hours a day, 7 days a week.
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