As attorneys for first-party property claims, we must vet through claims to see if we can be “The Policyholder’s Advocate” on any case. Some of the initial questions I ask a potential client are: 1) When was the date of loss? 2) When did you notify the carrier? 3) How and when did you notify the carrier of the amount of damages you are seeking? 4) Does your policy have a provision limiting the time for you to file a lawsuit?

I’ve handled many cases that would’ve been great cases had it not been for a lapse in the notice provision or the statute of limitations. For those that don’t know, the notice provision requires the insured to notify the carrier of the loss claimed (usually through a sworn proof of loss) within a specified amount of time after the loss (usually 60 days). For more information on the notice provision in your specific state please read blog posts from Charles Mathis, Rob Trautmann, Denise Sze and other Merlin attorneys. The statute of limitations is the time you have to file a lawsuit against your carrier after a loss. This varies from policy to policy.

Another question I get asked by clients and public adjusters is, since we are past the filing deadline, is there any way to toll the time period since (insert extenuating circumstance here) was happening in my claim? One recent case covered some of the options.1

Jacques Boisvert and Crystal Boisvert sustained damage to their home in Phillipsburg, New Jersey as a result of Hurricane Sandy. On July 26, 2013, State Farm issued a notice to Plaintiffs stating that the damage that Plaintiffs reported was not covered by the Policy because there was “a pre-existing condition due to settlement, design, workmanship, construction and or materials used in construction or repair, which caused damage to the wood support beams.” In addition, the denial letter noted the “Suit Against Us” clause which indicated that action must be started within one year after the date of loss or damage. Plaintiffs filed suit on September16, 2014.

State Farmed countered by moving to dismiss based on the one year statute of limitations. Plaintiffs countered arguing the statute should be tolled. Plaintiffs argument that the statute of limitations should be tolled: 1) while the insurer investigates a claim before denial; 2) by the discovery rule regarding latent structural damage; 3) because equitable tolling applies.

There are very few circumstances where tolling applies due to an ambiguous letter by the insurance carrier. In Azze v. Hanover Insurance Company,2 the appellate division found an insurer’s letter did not mention the one-year limitation and negotiations continued after the purported denial. This is the exception. Most courts side with the view that the toll for the insurer’s investigation ends where the insurer unequivocally states there is a denial of the claim.

Regarding argument number two for tolling, the appellate court noted that “Plaintiff pled no facts with respect to the date of discovery or the applicability of tolling.” The discovery rule tolls the statute of limitations until the actual damage was or could have been reasonably discovered. Specific facts must be pled in the complaint for this to apply.

Regarding reason number three, equitable tolling, “A defendant may be denied the benefit of a statute of limitations where, by its inequitable conduct, it has caused a plaintiff to withhold filing a complaint until after the statute has run.”3 This again would warrant specific facts pled indicating the insurer misled the Plaintiff and demonstrating that the plaintiff “exercised reasonable diligence in investigating and bringing the claims.”4 Ultimately, the Boisverts (and their attorney) failed to prove tolling applied and their Hurricane Sandy claim was dismissed without prejudice to allow Plaintiffs to file an amended complaint.

You and your public adjuster should go through your post-loss obligations with a fine-tooth comb to make sure your claim does not get thrown out on a technicality. I leave you with a quote from Hall of Famer, Rogers Hornsby: “People ask me what I do in the winter when there’s no baseball, I’ll tell you what I do. I stare out the window and wait for spring.” Don’t wait! File your denied claim timely!

1 Boisvert v. State Farm Fire & Cas. Co., No. 14-5760, 2015 WL 5771797 (D.N.J. Sept. 29, 2015).
2 Azze v. Hanover Ins. Co., 765 A.2d 1093 (N.J.Super.Ct.App.Div.2001).
3 Trinity Church v. LawsonBell, 925 A.2d 720 (N.J.Super.Ct.App.Div2007).
4 Miller v. N.J. Dep’t of Corrections, 145 F.3d 616 (3d Cir.1998).