Usually the suit limitations provision in a policy dictates when a suit to recover can be filed. However, recently the Federal District Court of Washington held that under certain circumstances that is not necessarily true. In Holden Manor v. Safeco,1 the trial court refused to dismiss a homeowners association’s coverage suit as untimely, notwithstanding the fact that the suit was filed in 2015 and sought coverage under a policy that ended in 1982.
On May 17 of this year, Florida Governor Rick Scott signed into law Senate Bill 408, which, among other things, shortened the statute of limitations for property insurance claims in Florida to five years from the date of the loss. Under the earlier Florida Statutes § 95.11 and § 95.031, the statute of limitations did not expire until five years after a property insurer had breached the insurance policy. The Senate Bill 408 change came roughly five and a half years after Hurricane Wilma destroyed an enormous amount of Florida property, and the change left many questioning whether they could still seek redress for these claims.
Last week in Can Insurers, Through Written Statements, Waive A Statute Of Limitations Defense?, I wrote about how Florida’s five-year statute of limitations applicable to the 2004 and 2005 hurricanes can be difficult to determine because it begins on the date an insurer breaches an insurance contract. Last week’s post discussed how the U.S. District Court for the Middle District of Florida held that the statute of limitations defense can be waived by insurers through written statements. The Southern District recently analyzed whether a claim for declaratory relief related to a statute of limitations issue in a Hurricane Wilma case was ripe for determination.
A statute of limitations serves to restrict access to the courts after a specified amount of time has passed. The reasons for such are many, but the underlying principle is simply that if you wait too long, you give up the opportunity to resolve your issue with the courts. The statute of limitations is created by the legislature, but the parties to a contract can also agree to limit the time to bring an action before a court of law. When this happens, a question often arises as to which controls, the statute or the contract.
The story goes like this: A condominium association in South Florida incurred damage during Hurricane Wilma. The association called its insurer, which sent an insurance adjuster to inspect the damage. The adjuster determined that the damages were below the deductible. The association’s board of directors considered re-opening the claim while there is still time. Based on unit owner complaint, the Board recently discussed hiring insurance professionals to determine whether the condominium sustained more extensive damage than that found by the insurance company’s investigation. Unit owners within the association have expressed their feelings that it is imperative to conduct this investigation before it is too late. The unit owners have even threatened to sue the board for its inaction if the appropriate steps are not taken.
In a recent post on Property Insurance Coverage Law Blog, Jeremy Tyler discussed general issues with the statute of limitations for filing lawsuits. As Jeremy correctly pointed out, the statute of limitations is a legal deadline for filing a lawsuit. If a lawsuit is not filed before the statute of limitations has expired, the lawsuit may be barred, despite the merits of the action. Complying with the statute of limitations is extremely important, and any association that suffered damages from Hurricane Wilma should pay close attention to the status of its claim and immediately make decisions on how to best proceed.