Plaintiff Lillian Smith reported a claim to Travelers on Sept. 5, 2013, that a lightning strike damaged the foundation and the air conditioning unit at her commercial property. After an inspection, Travelers denied coverage on Nov. 13, 2013. The plaintiff then filed suit on Jan. 25, 2016, asserting claims for breach of contract and violations of the Texas Insurance Code and Texas Deceptive Trade Practices Act (DTPA). Travelers moved for summary judgment asserting the statute of limitations barred all of the plaintiff’s claims, and the plaintiff responded that Travelers waived its limitations defense and that her causes of action fall within the limitations period because the accrual dates were tolled.
The court determined Travelers did not waive its limitations defense, as the contractual provision in the policy was timely pled, and the plaintiff consented to the amendment of Travelers’ answer asserting the affirmative defense of statute of limitations. Under Texas law, the statute of limitations for a breach of contract action is four years from the date the action accrues. However, this limitations period may be contractually modified as long as the period is at least two years. The insurance policy issued by Travelers provided a statute of limitations period at two years and one day from the date that the cause of action first accrues. Therefore, the plaintiff must have filed her breach of contract claim within two years and one day from the accrual date.
Also, any requests by the plaintiff to reinvestigate her claim and any subsequent review by Travelers have no effect on the statute of limitations, because Travelers did not alter its original decision to deny coverage. Therefore, the court determined that the limitations period for the plaintiff’s causes of action accrued in November 2013, and she filed suit in January 2016 – after the statute of limitations had elapsed.
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Based in our Houston office, Lugenbuhl shareholder Rebecca Moore and associate Suzanne Schlicher focus their practices on insurance litigation. Learn more on Rebecca or Suzanne, or visit our Insurance practice section to learn more about Lugenbuhl’s expertise and services.