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The PA Supreme Court Holds That The Statute Of Limitations In An Uninsured Motorist Action Begins On The Date That A Breach Of Contract Occurred

December 4th, 2017

In Erie Insurance v. Bristol, 2017 WL 5617628, (Pa., November 22, 2017), the Pennsylvania Supreme Court held that the four year statute of limitation In an uninsured motorist claim did not begin on the date that the insured learned that the adverse driver was uninsured, but rather, on the date that the uninsured motorist carrier allegedly breached a contractual duty, which in this case was either the insurer’s denial of coverage or refusal to arbitrate.  In this case, Bristol was injured in a hit-and-run accident on July 22, 2005.  Bristol had uninsured motorist coverage through an Erie policy with his employer.  The Erie policy contained an arbitration clause.  Bristol’s attorney notified Erie of an uninsured motorist claim on June 19, 2007.  Both parties then selected arbitrators, and Erie obtained Bristol’s statement under oath.  No other action was taken other than an exchange of correspondence in September 2012.  Erie then filed a declaratory judgment action on May 29, 2013, asserting that the statute of limitations began on the date of the injury when Bristol knew or should have known that the adverse vehicle was uninsured.  Bristol argued that there was no need to file suit because of Erie’s agreement to arbitrate and the selection of arbitrators.   The trial court granted Erie’s motion based on the Superior Court’s decision in Hopkins v. Erie Ins. Co., 65 A.3d 452 (Pa. Super. 2013), which required suit to be filed in order to toll the statute of limitations.  The Superior Court affirmed in an unpublished opinion.  The Pennsylvania Supreme Court reversed holding that the question of when the statute of limitations begins with respect to a contractual duty to provide uninsured motorist coverage begins on the date of the alleged breach of contractual duty, which in this case was either the insurer’s denial of coverage or refusal to arbitrate.

Before Saylor, C.J., Baer, Todd, Donohue, Dougherty, Wecht, and Mundy, JJ.  Opinion by Mundy, in which Chief Justice Saylor, and Justices Baer, Todd, Donohue and Dougherty joined.  Justice Wecht filed a dissenting opinion.

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