Applying the Right Statute of Limitations to Your Lawsuit Against Your Uninsured Motorist Insurer in Tennessee

Pursuing damages for the harm you suffer in a Tennessee auto accident can take many twists and turns. Sometimes, it may center solely on litigating against the driver who caused your accident. Other times, however, the case can be more complicated, involving legal action against insurance companies, including your own insurer. In a recent Tennessee Court of Appeals case the plainitff was able to defeat her insurance company’s claims that she waited too long to sue it. The ruling reaffirms that people injured in auto accidents who sue their insurers are asserting contract claims, rather than personal injury tort claims, which means that the law gives them a six-year, rather than a one-year, limitations period in which to act. However, despite this result which benefited the injured plaintiff, there are numerous pitfalls here.

The plaintiff in this case was injured in a May 2011 auto accident. The woman sued the other driver for his alleged negligence in causing the accident. Sometimes, in an auto accident case, the problem isn’t necessarily with the merits of the case or about marshaling the evidence needed to win; it is with simply locating and hauling into the court the defendant and then finding an applicable insurance policy.

That was the problem the plaintiff here faced. For 15 months, she tried to get the defendant served with the lawsuit. Eventually, the process server determined that the defendant could not be found. At that point, the plaintiff moved in a new direction, amending her lawsuit to add an additional defendant: the auto insurance company with which she had uninsured motorist coverage. The plaintiff’s insurer was served on July 31, 2013.

The insurance company filed a motion asking the trial court to issue a summary judgment in its favor. Under Tennessee law, there is a one-year general statute of limitations in personal injury cases. Since the plaintiff did not serve the insurer until 26 months after the accident, the statute of limitations barred her case against it, the insurance company argued. The trial judge agreed with the insurer, applied the one-year statute, and issued the judgment in favor of the company.

The Court of Appeals reversed that ruling and revived the plaintiff’s case against the insurer. The ruling is an important one for people injured in auto accidents whose cases involve taking action against their own insurer. The trial court was correct that cases arising as personal injury matters generally carry a one-year statute of limitations. However, this plaintiff’s claim against the insurance company wasn’t one that accused the company of committing a personal injury tort against her. Her claim was that the insurance company had breached its insurance policy contract with her. As the Tennessee Supreme Court wrote in a 1966 opinion, “the insurance company is not the tort-feasor, its liability arises solely from the contract and not from a breach of any common law duty to refrain from tortious injury to a person.” In other words, an uninsured motorist coverage dispute is a contract case, rather than a personal injury tort case, even though the underlying trigger event was a driver’s tortious act (negligently causing the crash that injured the plaintiff). In Tennessee, since the statute of limitations for contract claims is six years, rather than one year, the plaintiff’s action against her insurer was brought in time.

When bringing an auto accident claim in Tennessee, another problem is that the other driver is not required to disclose the limits of insurance available, even after suit is filed. No other state follows such a rule, which causes many problems. Therefore, not only do you not know when filing suit that you will be able to find the other driver, you may not know whether they have insurance or, if so, the amount of the policy limits. Thus, it is better practice to bring the UM (uninsured or underinsured motorist) policy into the case at the outset — suing both the responsible driver and the plaintiff’s own insurance company. Indeed, although the statute of limitation for a direct action against the UM carrier is 6 years, the policy might contain other limitations requiring notice that could affect that, or the insurance company may claim prejudice as pointed out in the Bates case discussed above.

Your auto accident case may start out seeming straightforward, but many cases have complexities that lurk beneath the surface. The best way to protect yourself and your case is by retaining an experienced injury attorney. The car accident Law Office of David S. Hagy, PLC has been helping injured people for many years and we are ready to speak to you.

Reach us online or call (615) 975-7882.