Over the last several months, courts in Washington, Kansas, and Virginia have awarded victories to carriers asserting a suit limitation defense, and there are three valuable takeaways from the decisions. First, the insurer need not demonstrate that it was prejudiced by the failure to file suit within the limitations period; suit limitation provisions are not like notice of loss or proof of loss clauses. Second, the clock starts running on the suit limitation period when the policyholder has knowledge of the occurrence which ultimately gives rise to his or her loss, not when he or she has knowledge of the cause of that occurrence. Third, the provision is a contractual limitations period and, as such, not subject to state laws governing the operation of statutes of limitations.
The first case was Andrews v. St. Paul Guardian Ins. Co., 2015 U.S. Dist. LEXIS 104172, 2015 WL 4724574 (W.D. Wash., Aug. 9, 2015). The insured’s home in Seattle experienced the Nisqually Earthquake in February 2001, but he saw no sign of structural distress at the time. In 2014, he was planning a home improvement project and had the deck inspected, and it was then that he first learned of what he characterized as “massive visible damage” to foundation footings which “may” have been caused by the quake eleven years earlier. He brought suit after the carrier denied liability. Read more ›
Carriers routinely resist efforts to compel production of the underwriting and claims files on other policyholders on the basis of relevance. Early last month in 
The policyholder owned a 25-story condominium building in Miami. There was a tiled elevator landing on each floor separating the east and west hallways, and those portions of the structure on floors three through twenty-five had a uniform appearance by design. On February 11, 2013, a valve broke in an air conditioning unit on the east side of the 11th floor, and cascading water damaged the hallways on the east side of the building all the way down to the third floor. 
While not as prolonged and torturous as Dickens’ Jarndyce v. Jarndyce, the case litigated in one form or another for fifteen years. After a garage collapse in lower Manhattan in early 1999, the policyholder retained the PA and executed a retainer agreement that set the adjuster’s fee at 7% “of the amount of loss and salvage . . . when adjusted or otherwise recovered.” Efforts to settle with the insurer were unsuccessful, however, and the insured brought suit in 2001. Two trials, three trips to the Appellate Division, and ten years later, a settlement was reached in May of 2010. 
The policyholder was a management association that operated a condominium complex in Manchester. Many of the units had cantilevered balconies, and those began experiencing structural problems in 2007. By 2012, it had become apparent that joists under the balconies had suffered moisture infiltration leading to rot and deterioration, and a structural engineer recommended that they be taken out of service altogether. According to the insurer’s expert, this was attributable to “construction and design issues.”
Monday saw a unanimous panel of Massachusetts’ intermediate level appellate court reject a policyholder’s ensuing loss arguments. In 
The policyholder had a building in Burnsville that had been vacant for four months when the mortgagee/bank was added to the contract of insurance. Seven months later, while still vacant, the structure was vandalized. The bank submitted an insurance claim, but this was denied because the policy recited that loss by vandalism was excluded “[i]f the building where loss or damage occurs has been vacant for more than 60 consecutive days before that loss or damage occurs.”
The insureds owned a house in Tarzana. In early 2013, concerned over recurring watermarks, they had a general contractor and a structural engineer inspect the rear deck on the home. The consultants found severe decay from corrosion in steel beams beneath the structure in an area concealed by the deck floor, and they advised the policyholders that the upper portion of the house was in danger of falling. The insureds immediately took steps to remediate the home, and they ultimately spent $91,000 in doing so. 
The insureds owned a home in Little Silver that was inundated by 20”-36” of water when a creek behind their property overflowed its banks during Superstorm Sandy on October 29, 2012. They initially attempted to clean the house themselves, removing the carpeting and hiring a certified cleaning and restoration company. When the president of the clean-up concern visited the site, however, he told everyone to stop what they were doing, saying that the water was “very unhealthy and dangerous.” He later opined that it was Category 3 water – a substance that is “highly contaminated and could cause death or serious illness if consumed by humans.” 
Two weeks ago in 