Opinion ID: 2581939
Heading Depth: 2
Heading Rank: 3

Heading: application of section 31a-21-313 to the tuckers' claims

Text: ¶ 15 The application of this three-year statute of limitations to the Tuckers' claims hinges on the definition of inception of the loss. As section 31A-21-313(1) explains, An action on a written policy or contract of first party insurance must be commenced within three years after the inception of the loss.  The inception of the loss refers to the time when the loss was first incurred or began to accrue. See, e.g., Canadian Indem. Co. v. K & T, Inc., 745 F.Supp. 661, 664 (D.Utah 1990) (construing inception of the loss language in section 31A-21-313 (1), holding that it refers to the time when the loss was first incurred). Additionally, section 31A-21-313(4) prohibits filing an action until, among other things, the insurer denies full payment. Utah Code Ann. § 31A-21-313(4)(c) (2001). As the trial court correctly stated, In a case involving the alleged failure to pay PIP benefits, the [inception of the loss occurs] no later than the date on which the insurer refuses to pay the disputed PIP benefits, and such a refusal to pay constitutes denial of full payment under section 31A-21-313(4)(c). ¶ 16 Here, State Farm reimbursed the Tuckers in November 1996 for the expenses it deemed to be necessary and informed the Tuckers that it would not reimburse the denied expenses unless the Tuckers could submit additional medical documentation showing the expenses were medically necessary. While State Farm left open some possibility for a future reconsideration of its decision if additional information was forthcoming, it is clear that in November 1996 the Tuckers were on notice that State Farm did not intend to fully reimburse the Tuckers' medical expenses. Thus, November 1996 was the inception of the loss triggering the beginning of the limitations period. The Tuckers failed to sue State Farm until September 12, 2000, when they filed their amended complaint adding State Farm as a defendant. Because this date is more than three years from November 1996, the Tuckers' claims against State Farm were barred by section 31A-21-313. ¶ 17 While the exact theory of the argument is unclear from the briefs, the Tuckers appear to argue that the statute of limitations was tolled for a period. See Utah Code Ann. § 31A-21-313(5)(2001) (The period of limitation is tolled during the period in which the parties conduct an appraisal or arbitration procedure ... as agreed to by the parties.). This argument fails. Neither party has alleged that they agreed to an appraisal or arbitration procedure. The Tuckers seem to argue that State Farm's willingness to consider additional information evidences an agreement to toll the limitations period under section 31A-21-313(5). A mere willingness to consider additional information, however, does not constitute such an agreement. The record contains no other evidence of any such agreement. Thus, because the statutory requirements for tolling were not satisfied, the limitations period expired in November 1999, three years after State Farm's initial denial of the Tuckers' claim. We therefore affirm the trial court's decision that the Tuckers' amended complaintfiled on September 12, 2000was time barred.