Tennessee Uninsured Motorist Claims Subject to Six-Year Statute of Limitations

While a case for personal injuries resulting from a car accident must be filed within one year, a claim against an insurance company for uninsured motorist coverage arising from the same incident is not subject to that one-year statute of limitations.

In Bates v. Greene, No. W2016-01868-COA-R3-CV (Tenn. Ct. App. July 27, 2017), plaintiff had been injured in a car accident. Plaintiff filed a timely suit less than one year after the accident against the driver of the other car, but the civil warrant was returned unserved. An “alias civil warrant was issued for [the driver], but it was also returned unserved.” Two years after the accident, an amended warrant was issued, adding plaintiff’s uninsured motorist insurance carrier as a defendant.

Defendant insurance company filed a motion for summary judgment, “asserting that the claim against it was barred by the one-year statute of limitations applicable to personal injury actions.” Plaintiff responded that “she was asserting a contract claim…, subject to a six-year statute of limitations, rather than a tort claim…” The trial court granted the motion for summary judgment, but the Court of Appeals reversed.

The issue here was clear cut—whether a claim against an uninsured motorist carrier is subject to the one-year tort statute of limitations or the six-year contract statute of limitations.

In its analysis, the Court pointed out that “the vast majority of jurisdictions to have considered this precise question have held that, because any recovery of the insured is based upon the insurance policy, without which no liability could be imposed upon the insurer, the statute of limitations for contract actions controls.” (internal citations and quotation omitted). Further, the Court noted that the Tennessee Supreme Court had addressed this issue three times. The Supreme Court held in a 1966 case that the six-year statute of limitations for contract cases applied to claims for uninsured motorist coverage, and it reaffirmed that such claims arose under contract law in two subsequent cases. (Schleif v. Hardware Dealer’s Mutual Fire Insurance Co., 404 S.W.2d 490 (Tenn. 1966); Price v. State Farm Mutual Automobile Insurance Co., 486 S.W.2d 721 (Tenn. 1972); Cavalier Insurance Corp. v. Osment, 538 S.W.2d 399 (Tenn. 1976)).

Defendant argued on appeal that the uninsured motorist coverage statutes passed after these Tennessee Supreme Court cases “now control[] and that a claim against the uninsured motorist carrier is ‘subject to the same one-year statute of limitations’ as the one against a defendant-motorist.” According to defendant, “nothing in the language of the uninsured motorist statute…permits a plaintiff who intends to rely on the operation of the statute to make a claim against the uninsured motorist carrier to wait until after the service of process issued to the uninsured motorist has been returned ‘not to be found’ before serving a copy of the process on the uninsured motorist carrier.” The Court rejected this argument, finding “nothing in the uninsured motorist statute that mandates service on an uninsured motorist carrier within one year of an accident.”

Ultimately, the Court followed the precedent set by the Tennessee Supreme Court, previous Court of Appeals cases, and the majority of other jurisdictions and held that it found “no basis in the uninsured motorist statute or case law for requiring the plaintiff to serve the uninsured motorist carrier within one year of the accident.” Dismissal of the case was thus reversed.

This was clearly the correct result. While a plaintiff may not have a claim against his uninsured motorist carrier absent a tort being committed, the claim itself arises from the contract between the parties. Requiring plaintiffs to file against an uninsured motorist carrier within one-year from an accident would essentially mean that plaintiffs always had to name the uninsured motorist carrier as a defendant in the initial filing, resulting in unnecessary filings and costs in car accident cases.

Remember, however, that auto policies require that timely notice of the event be given to the insurance carrier.  Thus, it is still important that plaintiff’s carrier be put on notice (preferrably written notice) of the claim so that it cannot later raise a lack-of-notice defense.