Every once in a while a client comes to us when it is too late.
I discussed the prudence of seeing an attorney early in a prior post.
Last week a client asked our help on the following case:
Mrs. Mary Moore sustained a substantial loss of her personal property due to a flooded basement. The flood was caused by construction next door. The contractor struck a water main.
There appears to be no question that the contractor was negligent. His insurance company paid other people damaged by the flood.
Mrs. Moore sustained about $1,000,000 in personal property damage, such as damaged artwork, antique furniture, collectibles, and a vast designer clothing collection which included many unworn garments with their tags.
First, Mrs. Moore sought recovery from her own homeowner’s insurer, Allstate. About 2 years after the flood, Allstate paid its full limits of $350,000. She then sought to collect $650,000 from the contractor’s insurance company, Old State Dominion Insurance Company.
Mrs. Moore engaged in much negotiation with Old State’s representative. Documentation was exchanged, and there were inspections of the property.
According to Mrs. Moore Old State’s adjustor told Mrs. Moore a number of times that a “claim must be filed no later than July 8th”, which was 3 years from the flood. Mrs. Moore took it to mean that she must send-in all of her claims documentation. There was also a conversation where Old State’s adjustor’s asked whether Mrs. Moore hired an attorney. Mrs. Moore answered “no”. “Good” was the adjustor’s response because “we can settle faster without an attorney.”
Mrs. Moore sent extensive and very organized paperwork supporting her claim to Old State before the 3 year deadline. On July 16th, a week after the 3 year anniversary, Mrs. Moore and the adjustor had an all day meeting to review the claim submission. After this session another meeting was planned for August 2nd in which numbers would be discussed.
However, that August 2nd meeting was cancelled. Old State sent a denial letter to Mrs. Moore on July 28th. The claim was denied since suit was not filed within the 3 year statute of limitations.
We could not help Mrs. Moore. She failed to file suit before the statute of limitations expired. If suit had been filed, negotiations could have continued and may have led to an eventual settlement.
The law has a strong policy in upholding statutes of limitations. The law favors an end to claims and lawsuits. In order to claim that the statute of limitations would not apply, we would have to show fraud by the insurance company. Negotiation before or after the deadline will not be deemed a waiver of the statute of limitations. Furthermore, there was no fraud in the adjustor’s statement that it was good that an attorney was not hired. This was not tantamount to lulling the client into not hiring an attorney. Furthermore, there was no offer made which could cause the client to think that the case was settled. In sum, we could not show any of the extraordinary circumstances which would allow the case to proceed.
The lesson for clients is to consult with an attorney as soon as possible after a loss or an injury. An injured client should be aware that there are strict time limits in which to pursue a claim or lawsuit. Defendant will take every advantage of the statute of limitations which is a “slam dunk” defense.
Mark E. Seitelman, 8/16/10, www.seitelman.com.