In Legos v. Travelers Cas. Co. of Conn., the United States District Court for the Middle District of Pennsylvania examined an underinsured motorist insurance claim arising from a 2003 automobile accident. The injured party filed a writ of summons against the other driver in 2005, followed by a lawsuit in 2006. Shortly thereafter, the injured party filed an underinsured motorist claim with his automobile insurer. The insurer acknowledged receiving the claim. In 2012, the injured party settled his action against the driver.
In 2016, the injured party’s insurer sent a letter advising that the statute of limitations on the UIM claim had run, and that the insurer had closed the file. Shortly thereafter, the injured party filed a breach-of-contract action against the insurer. Following discovery, the insurer filed a motion for summary judgment, contending that the action was barred by the four-year statute of limitations for breach of contract. The insurer argued that the limitations period began to run when the policyholder settled the underlying tort claim.

In analyzing the motion, the Middle District of Pennsylvania emphasized that the Pennsylvania Supreme Court has held that the statute of limitations on an action for the denial of insurance benefits begins to run at the time benefits are denied. The plaintiff contended that the Supreme Court’s decision concerned litigation over the denial of an uninsured motorist claim and should not be applied to litigation regarding an underinsured motorist claim. The Court disagreed, concluding that the Supreme Court’s decision clearly applied to all litigation regarding insurance contracts, including litigation pertaining to underinsured motorist benefits.
The Court therefore held that the applicable statute of limitations began to run upon the insurer’s denial of the UIM claim in 2016. Accordingly, the Court determined that the lawsuit was timely filed and denied the defendant insurer’s motion for summary judgment.