The Six-Year Statute Of Limitations Governing Contract Actions Applies To An Insured’s Action To Recover No-Fault Benefits
Although no-fault statutes in other states may have specific limitations periods for the initiation of a no-fault claim, there is no such limitation within Minnesota’s No-Fault Act. Further, few, if any, Minnesota automobile insurance policies or PIP endorsements provide any type of time limitation for bringing a no-fault claim. However, the absence of a limitation period within Minnesota’s No-Fault Act and the policy does not mean that there is no limitation whatsoever.
In Entzion v. Illinois Farmers Insurance Company, 675 N.W. 2d 925 (Minn. Ct. App. 2004), appellant Entzion was injured in an automobile accident in January 1992. She filed a claim with Illinois Farmers, received no-fault medical benefits totaling $18,836.83, and was denied further benefits in December 1994 based on the results of an independent medical examination. In May 2002, Entzion filed a claim for the remaining $1,063.17 in unpaid medical benefits, as well as $20,000.00 in unpaid wage loss benefits. In July 2002, Illinois Farmers reiterated that Entzion’s benefits were discontinued in December 1994 and denied the claim.
Entzion brought a lawsuit to compel Illinois Farmers to pay the remaining no-fault benefits. Illinois Farmers asked the district court to dismiss Entzion’s claims since the six-year statute of limitations for contract actions barred her claims. The district court dismissed Entzion’s claims as untimely and the Court of Appeals agreed. The Court of Appeals found that Entzion’s no-fault claim was based on a breach of contract theory, thereby triggering the statute that mandates that contract claims be brought within six years of the date the cause of action accrues. The Court of Appeals further ruled that in this case, the cause of action accrued (and the statute of limitations began to run) in December 1994, the date Illinois Farmers denied the no-fault claim. Therefore, the Court of Appeals concluded that since Entzion did not bring her suit until nearly eight years after Illinois Farmers denied payment of no-fault benefits, her claim was barred by the six-year statute of limitations.
The ruling in Entzion v. Illinois Farmers Insurance Company simply means that an insured must bring a no-fault claim within six years from the date of denial, or the claim can be subject to dismissal. It can be said that the rule in Entzion does not come as a great surprise for two main reasons. First, since no-fault claims are first-party actions, it has been largely accepted that the six-year statute of limitations governing contract actions would be applicable. Indeed, when no-fault claims are brought in district court, they are properly captioned as breach of contract claims. Second, the choice of the date of denial as the trigger that starts the six-year time period to bring a suit for no-fault benefits is consistent with prior cases dealing with uninsured motorist claims.
About the Author:
Randy is an aggressive litigator who has successfully represented clients in the courtroom at both the trial and appellate court levels. His experience in insurance law also allows him to economically resolve disputes when the resolution is in the client's best interest. He focuses his practice in the areas of construction law, products liability, insurance coverage, fire litigation, fraud, automobile, no-fault and subrogation.