State Farm Mut. Auto. Ins. Co. v. Frank – 3/21/2024

April 3, 2024

Arizona Court of Appeals Division One holds that an insurer’s failure to give a required notice regarding time limits for claims does not extend the insured’s statute of limitations.

An insured filed an action seeking underinsured motorist coverage. On summary judgment, the insurer argued that the coverage was time-barred under A.R.S. §12-555(C)(2) because the insured had failed to request arbitration or respond to the insurer’s request for arbitration. Ultimately, the trial court granted summary judgment in favor of the insurer, finding that the insured never requested arbitration. The court of appeals affirmed in part and vacated in part.

By statute (A.R.S. § 12-555(A)), insureds must provide their insurer with a written notice of claim. After receiving a notice of claim, the insurer is in turn required to give written notice to the insured that he or she must request arbitration or file suit within three years. A.R.S.  § 12-555(C)(1). Although the insurer is required to give the insured this notice, the three-year statute of limitations begins on the date of the insured’s notice of claim. A.R.S. § 12-555(C)(2). Accordingly, an insurer’s non-compliance does not extend the insured’s limitations period in § 12-555(C)(2). Because the Auto Policy required the insured to request arbitration within three years of making a claim, and the insured did not do so, the insured’s claim of coverage under the Auto Policy was time-barred. Unlike the Auto Policy, the Umbrella Policy required the insured to initiate a lawsuit within three years of making a claim. Because the insured initiated such a lawsuit, the claim under the Umbrella Policy was not time-barred.

Judge Catlett delivered the opinion of the Court, in which Judges Weinzweig and Cruz joined.

Posted by: Brandon T. Delgado