Opinion ID: 1445066
Heading Depth: 2
Heading Rank: 2

Heading: The One-Year Period of Limitation.

Text: The date of loss here was December 16, 1988. Respondent filed its complaint for declaratory judgment some two years later on December 18, 1990; as of that date, appellant had not brought a lawsuit against respondent to recover on the policy. The issue presented is whether appellant is barred from bringing suit by the policy's one-year period of limitation. [1] In Clark v. Truck Ins. Exchange, 95 Nev. 544, 598 P.2d 628 (1979), a clause in a policy required that suit be brought within twelve months after the inception of the loss. Concluding that the twelve-month limitation period represented a reasonable balance between the insurer's interest in prompt commencement of action and the insured's need for adequate time to bring suit, this court held as follows: We construe the clause to allow the period of limitations to run from the date of the casualty, but the period will be tolled from the time [the insured] gave notice of the loss until [the insurer] formally denies liability. Id. at 546, 598 P.2d at 629; see also Davenport, 97 Nev. at 154, 625 P.2d at 575. We reasoned that if the limitation period were strictly construed to begin from the date of loss, then the entire period could ... be consumed by the built-in delays of the policy and by the time in which the parties attempt to negotiate the claim. Clark, 95 Nev. at 546, 598 P.2d at 629. In this case, appellant immediately notified respondent of his loss. Under Clark, then, the one-year limitation period was tolled until respondent formally denied its liability to appellant. Respondent contends that it formally denied liability in the April 4, 1989, letter from its adjustor to appellant. This letter contains the following statements: Since [appellant's letter] was dated on the 17th of January [1989], and he was advised as to the provisions under this policy, I've been advised and given authority by my principal, [respondent], to respectfully decline payment [for personal property loss] to [appellant] based upon the sixty (60) day time limit for submission of the proof of loss. .... I will be at this time closing out my file, since [appellant] has been paid satisfactorily for both Building and Additional Living Expense. These statements constitute a formal denial of liability on the part of respondent. Yet, on May 5, 1989, in response to an April 17, 1989, letter written by appellant's attorney, respondent's adjustor wrote, As soon as I hear word from [respondent] in regards to the reconsideration of this matter, I will advise you accordingly. And in correspondence to appellant's attorney dated August 7, 1989, respondent's adjustor stated, My principal, [respondent] has instructed us to reopen our file and handle this matter on their behalf with your offices, specifically in regards to the personal property claim. Similar correspondence and negotiations between the parties continued until respondent filed its complaint for declaratory relief. Thus, we conclude that the parties continued to negotiate appellant's claim until December 10, 1990, the date on which respondent filed its complaint for declaratory relief. Accordingly, we hold that the one-year period of limitation was tolled until December 10, 1990, and, consequently, does not bar appellant from suing to recover for his personal property losses.