Laura Martino and Ryleigh Keeney obtained summary judgment on behalf of their client, State Farm, in a breach of contract and bad faith action in the Northern District of Iowa. The plaintiff, State Farm’s insured, claimed she sustained injuries arising out of a 2016 motor vehicle accident. She settled with the tortfeasor for policy limits and, as part of the settlement, claimed she reserved the right to make claims based on her underinsured motorist (UIM) coverage with State Farm. The plaintiff claimed State Farm breached the automobile policy and acted in bad faith by declining to submit to her policy limit demand for UIM benefits. Although the automobile policy had a four-year limitations provision, the plaintiff did not file suit until five years after the subject accident.
State Farm moved for summary judgment, arguing (1) the plaintiff’s breach of contract and bad faith claims were barred by the insurance policy’s four-year limitations provision, and (2) the plaintiff’s bad faith claim failed as a matter of law. The plaintiff only resisted the motion with respect to the breach of contract claim, arguing that the four-year contractual limitations period was not applicable since she reserved the right to bring a UIM claim against State Farm when she settled with the tortfeasor. She also argued that State Farm should be equitably estopped from asserting the limitations period.
The Northern District of Iowa granted State Farm’s motion, holding that State Farm’s breach of contract claim was barred by the four-year contractual limitations provision. The court reasoned that neither the circumstances of the plaintiff’s settlement with the tortfeasor nor the doctrine of equitable estoppel saved the plaintiff’s claim.
Gruber v. State Farm Mutual Automobile Insurance Company, United State District Court for the Northern District of Iowa, Case No. 6:21-cv-02055