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Hamm v. Allied Mutual Insurance Co.6/1/2000
Appeal from the Iowa District Court for Polk County, Ray A. Fenton, Judge.
Appeal by plaintiffs from district court decision dismissing their claim against insurer for underinsured motorist benefits.
REVERSED AND REMANDED.
Considered en banc.
The question here is: when does the policy limitation period begin to run on an insured's claim for underinsured motorist (UIM) benefits under provisions of the insured's automobile insurance policy. The district court concluded that the limitation period began to run on the date of the automobile accident that caused injury to the insureds. Based on this conclusion, the district court dismissed the petition of plaintiff-insureds Darlene and Ronald Hamm against defendant Allied Mutual Insurance Company for UIM benefits because it was not filed within two years of the date of the automobile accident and therefore was time-barred.
Upon our review, we conclude that the policy language of the Allied policy requires that an insured bring suit against or settle with the tortfeasor within two years of the accident in order to preserve his or her right to recover UIM benefits under the Allied policy. We further conclude, however, that the policy does not establish the limitations period concerning the Hamms' claim against Allied for UIM benefits and does not specify when the limitations period begins to run. Therefore, we conclude that the limitations period governing plaintiffs' suit against Allied for UIM benefits is ten years and that the ten-year period did not began begin to run until the date that Allied denied plaintiffs' request for UIM benefits under the Allied policy. plaintiffs settled with the tortfeasor because that was the date that plaintiffs' rights to the tortfeasor's liability coverage were determined. Because plaintiffs filed their suit against Allied within ten years of the date that Allied denied their claim,they settled with the tortfeasor, the district court incorrectly concluded that their suit against Allied was time-barred. We therefore reverse the judgment of the district court and remand for further proceedings.
I. Background facts and proceedings.
The relevant facts are not in dispute. On December 16, 1995, plaintiff Darlene Hamm was a passenger in a vehicle, which was being driven by Allen J. Breese and insured under a policy issued by defendant Allstate Insurance Company. While stopped at a stoplight, the Breese vehicle was struck from behind by a vehicle being driven by Minh Bao Vien. Plaintiff Darlene Hamm sustained personal injuries as a result of the collision. At the time of the accident, Darlene and Ronald Hamm were insured under an automobile insurance policy issued by defendant Allied Mutual Insurance Company, which included underinsured motorist coverage in the amount of $25,000.
On August 5, 1996, Darlene and her husband Ronald Hamm settled Darlene's personal injury claim and Ronald's loss of consortium claim with Vien and his automobile liability insurance carrier for $20,000, the limits of Vien's automobile insurance policy. Plaintiffs contend that amount, however, was insufficient to compensate Darlene for her injuries and damages.
The Hamms were unable to settle their UIM claim with their insurer, Allied. As a result, the Hamms filed a petition in district court against both Allstate (the insurer of the vehicle in which Darlene was a passenger) and Allied on January 15, 1998, seeking to recover the policy limits of underinsured motorist coverage.
Allied filed an answer to the Hamms' petition, raising expiration of a policy limitations period as an affirmative defense. Allied also filed a motion for summar
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