Shane Pelissier et al. v. Geico General Insurance Company

As this Court has often recognized, the purpose of statutes of limitations is to protect both forum courts and defendants against stale claims while at the same time ensuring a reasonable period during which plaintiffs may seek recovery on otherwise sound causes of action. Zannini v. Phenix Mut. Fire Ins. Co., 172 N.H. 730, 734 (2019). Furthermore, “[i]n general, parties to a contract are bound by the terms of an agreement freely and openly entered into and courts cannot improve the terms or conditions of an agreement that the parties themselves have executed or rewrite contracts merely because they might operate harshly or inequitably.” Id. at 734, citing Rizzo v. Allstate Ins. Co., 170 N.H. 708, 713 (2018). In fact, the Plaintiffs themselves acknowledge that contractual agreements to shorten the time for filing suit are enforceable provided that they do not violate public policy and are not unconscionable as applied to the insureds. Brief of Plaintiffs/Appellants, p. 6.

In order to protect itself from being subjected to the potential for infinite exposure to liability and the need to defend against stale claims due to delays in the pursuit of uninsured/underinsured motorist claims, GEICO adopted a reasonable contractual limitations period which, as the trial court found, was clear and unambiguous. The Pelissiers’ newly asserted claims that the contractual limitations provision – clearly labeled “STATUTE OF LIMITATIONS” and logically located within SECTION IV – UNINSURED MOTORISTS COVERAGE - was “buried” or is somehow ambiguous should be disregarded since this argument was not raised in a cross appeal. Brief of Plaintiffs/Appellants, p. 18. Furthermore, there is simply no basis for such an argument given the plain language stating: “Suits: Any claim for damages caused by an uninsured auto as set forth in Section IV, must be brought by lawsuit within three years of the date of the accident.” [emphasis added] The reference to “suits” and “lawsuit” clearly informs the insured that the lawsuit must be filed within three years of the date of the accident and that merely giving notice of the claim to the insurer is not sufficient to preserve the insured’s rights to recover uninsured or underinsured motorist benefits. No reasonable insured who took the time to review the policy language could mistake the clear and unambiguous provisions. Nor is there any basis for the Pelissiers’ argument that they are not presumed to know the contents of the policy because they did not sign it. Insurance policies are binding contracts and the insured’s signature is not required. The three-year period for filing suit is clearly not unreasonable or unconscionable since it is equivalent to the length of time that the New Hampshire legislature has proscribed for the filing of personal injury and breach of contract actions. RSA 508:4, I. The only question is whether the policy can provide that the time for filing suit begins to run on the date of the accident as it does for tort claims, as opposed to only beginning to run on the date of breach as in the case of breach of contract claims under common law. Providing for an objectively determined trigger date for the limitations period in the policy allows for predictability and gives the insurer a finite period of time within which it is subject to liability under the policy, consistent with the public policy behind limitations periods. On the other hand, using the date of breach gives rise to unpredictability in the vast majority of uninsured and underinsured motorist cases. Where the insurer denies any obligation to provide coverage under the policy, the date of the alleged breach is clear – it is the date of the coverage denial. However, when the insurer merely disagrees with the insured as to the value of the claim, there is no outright denial. In that case, there is arguably no breach and the clock never starts to run. The decision as to whether or not to file suit, and when to do so, is left entirely up to the insured, leaving the insurer in a state of perpetual uncertainty contrary to the policy behind statutes of limitations. Thus, allowing the insurer to include a provision in the policy which establishes a definitive date – the date of the accident – as the date on which the clock begins to run provides the parties with a much greater sense of predictability.

As the Pelissiers acknowledge, they waited until the three-year statute of limitations was about to expire before filing suit against the alleged tortfeasor. They do not claim that they were prevented from filing suit due to circumstances beyond their control. Nor did they provide any evidence to support a claim that they could not have obtained the alleged tortfeasor’s liability limits prior to the November 2, 2021 deposition. In fact, this information was apparently provided voluntarily by the defense attorney in the underlying case during that deposition. In all likelihood, a simple inquiry by the Pelissiers or their attorney to either the defense attorney or the tortfeasor’s liability insurer would have produced this information at an earlier time and enabled them to assess whether the policy limits were adequate or whether they needed to pursue an underinsured motorist claim. The Pelissiers must be held to an objective standard of reasonableness with respect to their actions or, in this case, inaction. See, Portsmouth Country Club v. Town of Greenland, 152 N.H. 617, 624 (2005); French v. R.S. Audley, Inc., 123 N.H. 476 (1983); Perez v. Pike Industries, 153 N.H. 158 (2005); Glines v. Bruk, 140 N.H. 180 (1995). As noted, the Pelissiers did not submit any evidence to show that they made a reasonable effort to discover the liability policy limits before the three- year limitations period expired.

The Pelissiers’ attempt to circumvent their duty to conduct a reasonable inquiry by transferring the burden onto GEICO to affirmatively warn them that the limitations period was about to expire is not supported by any authority in New Hampshire and should be rejected by this Court consistent with the rulings of several courts in other jurisdictions. In addition to the cases cited in GEICO’s principal brief, see Compis Services, Inc. v. Hartford Steam Boiler Inspection & Ins. Co., 272 A.D.2d 886, 888, 708 N.Y.S.2d 770 (2000) (an insurer is not “obligated to call plaintiff’s attention to the policy provisions” and has no duty “to advise plaintiff of the limitations period”), quoting Blitman Constr. Corp. v. Insurance Co., 66 N.Y.2d 820, 823, 489 N.E.2d 236, 238 (N.Y. App. Ct. 1985). The Pelissiers do not claim that GEICO did anything to deceive them or mislead them with respect to the limitations period. GEICO’s November 12, 2021 letter enclosing forms to be completed by the Pelissiers and their doctor cannot be relied upon to support a claim that GEICO somehow lulled them into a sense of security because by that time they had already missed the filing deadline. There is simply no basis for invoking the doctrine of estoppel under the facts of this case. Furthermore, prior to settling their claims against the alleged tortfeasor the Pelissiers could have sought a tolling agreement from GEICO or could have filed their lawsuit for underinsured motorist benefits and then sought a stay until the underlying claims were resolved. Insurers who include contractual limitations provisions in their policies understand the need for flexibility in cases in which the underlying liability claims cannot be resolved prior to the expiration of the limitations period. As one court explained: We are not unmindful of the problems created when an insured’s legal action against a tortfeasor is prolonged past the two-year period. Nevertheless, the insured can sufficiently allege a cause of action for UIM motorist benefits if she has sufficient facts to proceed against the tortfeasor. The only additional allegations required are that the insured’s damages and the UM-UIM coverage exceed the tortfeasor’s liability insurance. Insurance companies that utilize suit limitation provisions must expect to be subjected to lawsuits which allege the likelihood of liability under the UM-UIM coverage. Of course, the insurance company can avoid the lawsuit by agreeing with the insured to put the UM-UIM issue on hold until the resolution of the action against the tortfeasor. As a practical matter, this is an insurance company’s probable (and most reasonable) course of action.

Vansickle v. Country Mut. Ins. Co., 272 Ill. App. 3d 841, 843, 651 N.E.2d 706, 707 (Ill. App. Ct. 1995) (upholding two-year limitation provision and affirming dismissal of underinsured motorist claim).

Where insureds are prevented from filing suit within the contractual limitations period due to circumstances beyond their control, a court applying one or more of the three exceptions this Court recognized in Zannini may determine that the limitations period is unreasonable as applied to the insureds under the specific circumstances of the case. That is not the situation here, however.

For the foregoing reasons, Defendant/Appellant GEICO General Insurance Company respectfully requests that this Honorable Court reverse the trial court’s denial of GEICO’s Motion for Summary Judgment and rule that GEICO’s contractual limitations provision is valid, enforceable and applies to bar the Pelissiers’ claims for underinsured motorist benefits.

I hereby certify that the Brief of Defendant/Appellant complies with the 3, 000 word limit under Supreme Court Rule 16(11).

I hereby certify that the foregoing Brief of Defendant/Appellant GEICO General Insurance Company will be served on all counsel of record via the court’s e-filing system.