Opinion ID: 1746865
Heading Depth: 1
Heading Rank: 5

Heading: analysis

Text: The plain language of § 44-6413(1)(e) dictates the outcome of this appeal. Section 44-6413 provides: (1) The uninsured and underinsured motorist coverages provided in the Uninsured and Underinsured Motorist Insurance Coverage Act shall not apply to: .... (e) Bodily injury, sickness, disease, or death of the insured with respect to which the applicable statute of limitations has expired on the insured's claim against the uninsured or underinsured motorist. (Emphasis supplied.) In the absence of anything to the contrary, statutory language is to be given its plain and ordinary meaning; an appellate court will not resort to interpretation to ascertain the meaning of statutory words which are plain, direct, and unambiguous. Lyman-Richey Corp. v. Nebraska Dept. of Rev., 258 Neb. 908, 606 N.W.2d 813 (2000); State ex rel. Stenberg v. Moore, 258 Neb. 199, 602 N.W.2d 465 (1999). If the language of a statute is clear, the words of such statute are the end of any judicial inquiry regarding its meaning. Ameritas Life Ins. v. Balka, 257 Neb. 878, 601 N.W.2d 508 (1999). The language of § 44-6413(1)(e) is clear. It bars as untimely an insured's claim for uninsured or underinsured motorist benefits when the statute of limitations on the underlying claim against the uninsured or underinsured motorist has expired. Section 44-6413(1)(e) clearly does not apply in the instant case, because the statute of limitations on Schrader's claim against the underinsured motorist, Schweitzer, never expired. As noted previously, Schrader's claim against Schweitzer accrued on December 18, 1992, the date of the accident. He timely filed suit against Schweitzer on December 12, 1996, and thus, the statute of limitations never expired. Section 44-6413(1)(e) does not apply if an insured timely files a claim against an uninsured or underinsured motorist because the statute of limitations on the insured's claim against the uninsured or underinsured motorist never expired, as in the instant case. Section 44-6413(1)(e) is therefore inapplicable, and the district court erred in concluding the suit was time barred and in granting summary judgment. Kratochvil v. Motor Club Ins. Assn., 255 Neb. 977, 588 N.W.2d 565 (1999), is readily distinguishable. In Kratochvil, the appellant was injured in a automobile accident on May 15, 1991. He did not timely file suit against the uninsured motorist. Kratochvil sought uninsured motorist coverage under his automobile liability policies issued by Motor Club and ultimately filed suit against it on May 14, 1996. The district court granted Motor Club's motion for summary judgment, reasoning that § 44-6413(1)(e) applied because it was the specific statute of limitations in effect when Kratochvil filed his claim. Kratochvil appealed. We determined that § 44-6413(1)(e) controlled over § 25-205 because it was a specific statute addressing the time period within which an uninsured motorist coverage claim must be brought against the insurer where the applicable statute of limitations had expired on the insured's underlying claim against the uninsured motorist. The significant difference between Kratochvil and the instant case, however, is that § 44-6413(1)(e) applied in Kratochvil whereas in the instant case, it does not. In Kratochvil, § 44-6413(1)(e) applied because the statute of limitations on the insured's underlying claim against the uninsured motorist had expired since the insured had not timely filed suit against the uninsured motorist. In the instant case, however, the statute of limitations never expired on Schrader's claim against Schweitzer because Schrader timely filed suit against her. Moreover, pursuant to Neb.Rev.Stat. § 44-6412 (Reissue 1998), Schrader timely notified his own insurer, Farmers Mutual, of the $30,000 settlement offer in the underlying claim, and Farmers Mutual consented in writing to the settlement with Schweitzer's insurance carrier. Section 44-6413(1)(e) simply does not apply under these circumstances, and therefore, Kratochvil is inapposite. Having determined that § 44-6413(1)(e) is inapplicable, we must decide what statute of limitations applies under these circumstances. Uninsured and underinsured motorist coverage is generally governed by contract; in other words, Schrader would have no cause of action against Farmers Mutual if it were not for the underinsurance coverage provided by his insurance policy. Thus, absent a specific statute addressing the time period within which this type of action must be brought against the uninsured or underinsured motorist coverage insurer, actions on written contracts may be brought within 5 years, pursuant to § 25-205. See Kratochvil v. Motor Club Ins. Assn., supra . That being the rule, a vast majority of jurisdictions conclude that their contract statutes of limitations apply under these circumstances. See 3 Alan I. Widiss, Uninsured and Underinsured Motorist Insurance § 34.3 (2d ed. 1995 & Cum.Supp. 1999). See, also, Plumley v. May, 189 W.Va. 734, 434 S.E.2d 406 (1993); Safeco Insurance v. Barcom, 112 Wash.2d 575, 773 P.2d 56 (1989); Lemrick v. Grinnell Mut. Reinsurance Co., 263 N.W.2d 714 (Iowa 1978); Franco v. Allstate Insurance Company, 505 S.W.2d 789 (Tex.1974); Pickering v. American Empl. Ins. Co., 109 R.I. 143, 282 A.2d 584 (1971); Turlay v. Farmers Insurance Exch., 259 Or. 612, 488 P.2d 406 (1971); Sahloff v. Western Casualty & Surety Co., 45 Wis.2d 60, 171 N.W.2d 914 (1969); Panos v. Perchez, 546 N.E.2d 1253 (Ind.App.1989); Edwards v. State Farm Ins. Co., 574 S.W.2d 505 (Mo.App.1978); DAIIE v. Hafendorfer, 38 Mich.App. 709, 197 N.W.2d 155 (1972). One court explained the rationale for the application of a contract statute of limitations as follows: Although a tortious injury is an incidental element in the insured's suit against his insurer over a policy contract, the action is fundamentally one in contract. The [insured] here would have no action if it were not for the coverage provided by her insurance policy. The insurer's liability rises solely from the insurance contract and nothing else. Pickering v. American Empl. Ins. Co., 109 R.I. at 150, 282 A.2d at 588. We agree and hold that § 25-205, which provides for a 5-year statute of limitations on written contracts, applies in an insured's suit against its uninsured or underinsured motorist coverage insurer, when the insured has timely filed the underlying claim against the uninsured or underinsured motorist. That leads us to the last issue which is potentially present in this appeal, When does a cause of action for underinsured motorist benefits accrue? Several jurisdictions have addressed this issue. Some courts have found that the cause of action accrues upon the resolution of the underlying tort claim, while courts in other jurisdictions have held that the date of the accident triggers the statute of limitations. Still other courts reason that the cause of action accrues when the insurer rejects the insured's claim for benefits. See Widiss, supra, § 34.4. Because we need not decide the accrual issue to resolve the instant appeal, and because the parties have not briefed this issue, we reserve for another day judgment on when a cause of action for underinsured motorist benefits accrues. We need not decide when Schrader's cause of action accrued, because his action is timely regardless of whether the statute of limitations began to run on the date of the accident, the date the underlying tort claim was resolved, or the date when the contract was allegedly breached. Assuming without deciding that the cause of action accrued at the earliest possible time of the aforementioned dates, the date of the accident, Schrader's suit is timely. The accident occurred on December 18, 1992, and Schrader filed suit against Farmers Mutual on December 5, 1997, clearly within the applicable 5-year limitations period of § 25-205.