When Does the Statute of Limitations Accrue in an Uninsured/Underinsured Motorist Claim?
July 30, 2019 By Michael W. McGraw
On June 4, 2019, the Court of Special Appeals published Shilling v. Nationwide Ins. Co., 241 Md. App. 261 (2019), a decision that reversed the Circuit Court for Anne Arundel County’s holding that Margaret Shilling’s underinsured motorist claim was barred by limitations.
On April 19, 2011, Ms. Shilling was involved in a motor vehicle accident with an underinsured tortfeasor in Gambrills, Maryland. The tortfeasor’s insurance company subsequently offered Ms. Shilling the maximum amount of coverage available under its policy – $20,000. On April 23, 2013, Ms. Shilling’s insurance provider, Nationwide, waived its subrogation rights against the tortfeasor and agreed to the proposed settlement. On February 3, 2014, Ms. Shilling signed a release whereby she accepted $20,000 and released the tortfeasor’s insurance company from liability.
On January 26, 2015, Ms. Shilling began settlement negotiations with Nationwide regarding damages in excess of $20,000 pursuant to her underinsured motorist coverage with Nationwide. On September 23, 2016, Ms. Shilling filed a complaint against Nationwide, seeking those damages. Nationwide moved to dismiss the complaint, arguing that it was barred by the statute of limitations. Nationwide argued that limitations began to run on April 23, 2013, the date Nationwide consented to settlement and waived subrogation. The Circuit Court agreed with Nationwide and dismissed Ms. Shilling’s UIM claim.
The Court of Special Appeals reversed. The Court held that the earliest date for commencing limitations for coverage under an uninsured motorist contract is the date the insured/injured party accepted the tortfeasor’s insurance company’s policy limits and executed a release in favor of the tortfeasor. The Court found that such a ruling protects the insured/injured party’s absolute statutory option of initially bringing a contact action against the underinsured motorist carrier or of initially bringing a tort action against the tortfeasor and thereafter bringing a contract action against the underinsured motorist carrier.