Case Title: Wille v. GEICO Casualty Co.

Citation: 

Docket Number: 93457

State: oklahoma

Court: Oklahoma Supreme Court

Date: 2000-02-15T00:00:00Z

Document:
Wille v. GEICO Casualty Co.  Wille v. GEICO Casualty Co. 2000 OK 10 2 P.3d 888 71 OBJ 495 Case Number: 93457 Decided: 02/15/2000 Supreme Court of Oklahoma JIMMY JOHN WILLE, Plaintiff v. GEICO CASUALTY COMPANY, Defendant CERTIFIED QUESTION OF LAW FROM THE UNITED STATES DISTRICT COURT, EASTERN DISTRICT OF OKLAHOMA: Honorable Frank H. Seay. ¶0 The United States District Court for the Eastern District of Oklahoma certified the following question pursuant to the Uniform Certification of Questions of Law Act, 20 O.S. Supp. 1997 §1601 et seq. When does the five-year statute of limitations begin to run on an action by an insured against his insurer on a claim for the recovery of benefits under an uninsured/underinsured motorist insurance policy? The question is answered as follows: an action on a claim for recovery of uninsured/underinsured motorist benefits accrues and the statute of limitations begins to run when a breach of the insurance contract occurs, rather than the date of the accident. Albert R. Matthews, Martha J. Cherbini, Muskogee, Oklahoma For Plaintiff, Chris Harper, Phillip P. Owens, II, Oklahoma City, Oklahoma For Defendant. ¶1 KAUGER, J.: ¶2 We are asked to answer the question of when the statute of limitations begins to run on an action for the recovery of benefits under an uninsured/underinsured motorist policy. The insured argues that the limitation period is not triggered until the breach of the contract occurs. The insurer asserts that the cause of action accrues on the date of the accident giving rise to the claim. We are persuaded by our earlier decision in Uptegraft v. Home Ins. Co., 1983 OK 41, 662 P.2d 681 in which we held that actions on a claim for recovery of uninsured motorist benefits are governed by the statute of limitations applicable to contracts, and by the rationale of the majority of states which have held an action for the recovery of uninsured/underinsured motorist benefits accrues and the statute of limitations begins to run when the insurance contract is breached. [2 P.3d 889] DISPUTED FACTS ¶3 On May 19, 1994, Jimmy John Wille, (Wille/insured) was involved in an automobile accident in Muskogee, Oklahoma, allegedly caused by the negligence of Bryan Lloyd Rampey. At the time of the accident, Wille was insured by an uninsured/underinsured motorist insurance policy (UM) issued by GEICO Casualty Company (GEICO/insurer). According to GEICO, Wille notified it on May 31, 1994, that he would not file a claim under his GEICO policy because Rampey had adequate insurance coverage. GEICO closed its file. Subsequently, Wille sued Rampey in state court. ¶4 GEICO acknowledges that in November of 1998, it received a letter from Wille's attorney advising it that his client wanted to make a UM claim under his GEICO policy. GEICO alleges that despite its efforts over the next several months, the necessary documentation was never provided by Wille; and because it could not evaluate the claim, the claim was denied and the file was again closed. Wille contends that on March 30, 1999, he mailed a detailed letter outlining his claim for UM benefits to GEICO's claims adjuster. However, GEICO denies receiving the letter. ¶5 On May 21, 1999, Rampey's insurance company offered the policy limits in settlement of Wille's claim. In a letter dated May 24, 1999, which GEICO acknowledges receiving, Wille informed GEICO that he was unaware of Rampey's policy limits until May 21, 1999, and he demanded payment of his UM policy limits. GEICO denied Wille's claim, asserting that the statute of limitations for bringing the claim expired as of May 19, 1999 ----- five years from the date of the accident. On June 9, 1999, Wille amended his state court petition against Rampey to include claims of breach of contract and bad faith against GEICO. Wille settled with Rampey for his policy limits, an amount less than the value of Wille's injuries, and dismissed his negligence action against Rampey on June 22, 1999, leaving GEICO as the only defendant. ¶6 On June 25, 1999, GEICO removed the cause to federal court and sought to dismiss Wille's claim. It argued that Wille had failed to state a claim for which relief could be granted because the lawsuit was filed in state court more than five years after the accident, and that the statute of limitations applicable to contract actions had expired. ¶7 AN ACTION ON A CLAIM FOR RECOVERY OF UNINSURED/UNDERINSURED MOTORIST BENEFITS ACCRUES AND THE STATUTE OF LIMITATIONS BEGINS TO RUN WHEN A BREACH OF THE INSURANCE CONTRACT OCCURS, RATHER THAN THE DATE OF THE ACCIDENT. ¶8 We first addressed the controlling statute of limitations concerning uninsured motorist provisions in Uptegraft v. Home Ins. Co., 1983 OK 41, 662 P.2d 681 . In accord with the majority of jurisdictions, ". . . A suit founded upon the insured's allegations (a) that he is entitled to payment under one of the first-party coverage clauses in the contract and (b) that the carrier has refused payment thereby breaching its promise, is clearly a contract action. The circumstances of the uninsured motorist's culpability and of the insured's damages are matters which the insured must prove in order to recover from the insurer, but these are really conditions of the insurer's promise. The recovery of the insured is based ultimately upon the policy without which no liability could be imposed upon the insurer for the tort of another. . . ." (Emphasis added. Citations omitted.). ¶9 However, we have not previously determined at what point in time the limitations period begins to run on an action for recovery of uninsured/underinsured benefits. ¶10 A statute of limitations begins to run when a cause of action accrues. This happens when a litigant can first maintain an action to a successful conclusion. ¶11 An insured may not be aware until long after the accident that a claim against his or her UM insurer is necessary or needed. At the time of the accident an insured may not know the extent of the injuries suffered, the amount of the tortfeasor's available coverage or whether the cost of medical treatment will exceed the value of the tortfeasor's insurance policy and available assets. Accordingly, we adopt the majority view. CONCLUSION ¶12 An action on a claim for recovery of uninsured/underinsured motorist benefits accrues and the statute of limitations begins to run when a breach of the insurance contract occurs, rather than the date of the accident. QUESTION ANSWERED. ¶13 SUMMERS, C.J., HODGES, KAUGER, WATT, BOUDREAU, JJ. concur. ¶14 OPALA, J., with whom HARGRAVE, LAVENDER, JJ. join dissenting. FOOT