• Court Dismisses Breach of Contract and Bad Faith Claims Based on One-Year Suit Limitation Clause.
  • June 2, 2017 | Author: Allison L. Krupp
  • Law Firm: Marshall Dennehey Warner Coleman & Goggin, P.C. - Camp Hill Office
  • Long v. Farmers New Century Ins. Co., 5:15-cv-06724 (E.D. Pa. March 30, 2017)

    The United States District Court for the Eastern District of Pennsylvania granted Farmers’ motion for judgment on the pleadings and dismissed the plaintiff’s breach of contract and bad faith claims. This case arose from a property damage claim under the plaintiff's Farmers' homeowners policy following a hail storm. One year after the storm occurred, the plaintiff’s public adjuster notified Farmers of the damage and made a claim for benefits. The next day--the one-year anniversary of the loss--Farmers acknowledged the claim, stated its position that the plaintiff had failed to promptly make a claim, and reminded the plaintiff that any suit against Farmers must be filed within one year of the date of the loss, as required by the suit limitation clause contained in the policy. Farmers subsequently determined that the damage was covered by the policy and issued payment. The plaintiff disagreed with Farmers’ assessment of the damages and demanded that Farmers participate in the appraisal process set forth in the policy. Farmers declined to engage in the appraisal process, and the plaintiff sued for breach of contract and bad faith. Farmers argued in opposition that the one-year suit limitation clause applied and that the plaintiff had failed to timely file the lawsuit. The court considered that the suit limitation clause was unambiguous, that this type of policy provision is valid and enforceable and that Farmers had not waived and was not otherwise estopped from relying on this defense. Thus, the court held that the breach of contract claim was barred by the suit limitation clause. With respect to the bad faith claim, the court held that, given the language of the policy and the 15-month delay in demanding appraisal, it was reasonable for Farmers to assume that the request for appraisal was untimely. The court, therefore, granted the motion and dismissed the breach of contract and bad faith claims.