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Opperman v. Pruisner3/15/2000
derinsured motorist coverage. Morgan, 534 N.W.2d at 99. The court held:
We believe the only reasonable interpretation of the language is that the word 'claim' refers to an action against the uninsured tortfeasor. Therefore, the policy provides the statute of limitations for a personal injury action in the state where the accident occurred shall be the length of time the insured has for bringing suit against [the insurer] for coverage under the uninsured motorist provision of the policy.
Id. We find no reason to deviate from the Morgan court's conclusion that the policy unambiguously requires suit against both the tortfeasor and insurer within two years from the accident date.
The Oppermans contend we need not follow Morgan because the policy at issue there provided uninsurance rather than underinsurance coverage. It is true the Iowa Supreme Court has construed underinsurance coverage more broadly than uninsured coverage. See Veach v. Farmers Ins. Co., 460 N.W.2d 845, 848 (Iowa 1980). Indeed, the court has stated "the purpose of unisunsured motorist coverage is to ensure minimum compensation to victims of uninsured motorists. . . . The goal of underinsured motorist coverage, on the other hand, is full compensation to the victim to the extent of the injuries suffered." Id. However, we are not dealing with a coverage issue, as was the case in Veach, but with a statute of limitations clause. This limitations language does not directly implicate the differing goals of uninsured and underinsured coverage. See Morgan, 534 N.W.2d at 98 (deciding statute of limitations issue solely on basis of plain reading of policy language). Accordingly, we see no reason to read the clause differently here than the court did in Morgan.
We are also unpersuaded by the Oppermans' attempt to distinguish Morgan on its facts. They point out that, in Morgan, the statute of limitations expired before the insureds sued the tortfeasors. Therefore, they assert, the court was not faced with the precise issue of whether a timely filed action against the tortfeasor tolls the statute of limitations against the insurer. While appealing at first blush, this contention ignores the court's unequivocal statement that the same limitation period governs actions against the insurer and the tortfeasor. Additionally, Iowa law does not require an insured to first file suit against a tortfeasor before seeking compensation from its own insurance carrier. See Douglass v. Am. Family Mut. Ins. Co., 508 N.W.2d 665, 667 (Iowa 1993); Leuchtenmacher v. Farm Bureau Mut. Ins. Co., 461 N.W.2d 291, 294 (Iowa 1990). We accordingly reject this contention.
Finally, the Oppermans ask us to permit suit against Allied outside the limitations period as long as Allied would not suffer any prejudice. In support of their contention, they cite Alcazar v. Hayes, 982 S.W.2d 843 (Tenn. 1998). In Alcazar, the issue was whether an insured who failed to comply with a policy's notice provision could enforce the policy absent prejudice to the insurer. Alcazar, 982 S.W.2d at 847. The court held the state's public policy of permitting tort victims to recover compensation for injuries would "be thwarted by harsh application of the legalistic traditional approach." Id. at 852.
The undisputed record here reflects Allied knew of the Oppermans' claim before suit was filed and, therefore, would not have been prejudiced by surprise. However, Allied correctly points out that limitations clauses are designed to avoid stale claims and we have found them valid and enforceable. See Fisher v. McCrary-Rost Clinic, 580 N.W.2d 723, 725 (Iowa 1998); Douglass, 508 N.W.2d at 668. Accordingly, we decline to adopt Aleazar's "no prejudice" stand
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