Recent case law underscores the complexity involved with uninsured motorist litigation.
Many lawyers, including those here at Pinto Coates Kyre & Bowers, frequently handle cases involving motor-vehicle accidents. While those cases often focus on complicated issues of fault for the wreck and medical evidence about the injuries claimed, another critical issue is the availability of insurance coverage for the injured party.
There are many different kinds of insurance coverage that provide compensation for injuries suffered in vehicular accidents. Most people are familiar with liability coverage, which all drivers must have to protect anyone they might be at fault for hurting. But what happens when the driver at fault for causing the wreck has no liability insurance?
While many people may vaguely recall purchasing something called uninsured motorist (or “UM”) coverage, most people, and even some lawyers who handle motor vehicle litigation, do not really understand how this coverage works. UM coverage applies when a driver who has been found to have no liability insurance is involved in an accident. If the incident results in a lawsuit, the UM carrier for the injured plaintiff is brought into the case. The insurance carrier then has the right to defend the lawsuit as if it were responding for the at-fault driver.
Two recent decisions from the North Carolina Court of Appeals have affirmed a strange rule that is unique to litigation involving uninsured motorist carriers: the defendant insurance company must not only be sued within the three-year statute of limitation, but also must receive service of the summons and complaint within that time. In all other situations, a lawsuit is considered timely if the case simply is filed within the limitations period; it is okay if service happens later (subject to certain rules, of course). In UM cases, however, the actual service must occur within three years of the accident.
In Davis v. Urquizza, which the North Carolina Court of Appeals decided on April 15, 2014, the Court of Appeals affirmed the dismissal of a lawsuit against an uninsured motorist insurance carrier that was not served properly until after the statute of limitations. In that case, the plaintiff attempted service on the UM carrier in a timely manner, but that service was not done properly. The plaintiff later served the UM carrier correctly, but the Court found that this late service did not prevent dismissal of the case. The decision cited, affirmed, and arguably clarified earlier case law on this same point. The Court rejected an argument that sought to limit the requirements for service to occur within three years in UM cases.
Another recent case, Kahihu v. Brunson, which the Court of Appeals decided on June 3, 2014, reaffirmed the complexities of UM cases. There, after many twists and turns in the litigation, the plaintiff won a judgment against the actual uninsured motorist, but the insurance company providing uninsured motorist coverage was dismissed for lack of personal jurisdiction. Although the plaintiff argued that he had, in fact, served the UM carrier, the UM carrier provided an affidavit stating that it had not received the summons along with the Complaint. The Court accepted this evidence and affirmed the dismissal of the case for lack of jurisdiction over the UM carrier defendant.
The lesson from these two recent cases is clear: UM cases require that the plaintiff properly serve the uninsured motorist insurance company defendant within the statute of limitations. While it may sound easy to comply with this requirement, sometimes lawyers are not aware that this rule exists. In addition, unless great care is exercised, it is not unusual for problems to arise with summonses and/or service. What would amount to minor problems in other cases, unfortunately, turn into a cause for serious concern when the plaintiff is suing an insurance company to obtain uninsured motorist coverage.
Thus, anyone analyzing a case that may involve UM coverage should take mind of a couple of points. To begin, be aware that there are traps involved in UM cases; this article only explores one of many possible problems. Moreover, to deal with these problems, it is advisable both to hire a law firm experienced with UM cases and to stay involved actively with developments in the litigation process.
Of course, insurance companies carefully analyze issues related to UM coverage. When an insurance carrier is brought into any lawsuit that may involve UM coverage, it should not only hire competent counsel, but also carefully examine all applicable facts, starting with a careful analysis of initial service of process. It must also communicate any service issues that come to its attention at the outset of the case.
Feel free to contact any of the attorneys at Pinto Coates Kyre & Bowers if you have any questions about uninsured motorist claims or litigation.
By Jon Ward