Hegseth v. American Family Mut. Ins. Co.

(Published, No. A14–1189)

Minnesota Supreme Court, March 23, 2016

 

The Minnesota supreme court in Hegseth v. American Family held that the six-year statute of limitations for bringing an excess uninsured motorist (UM) claim begins accruing on the date of the injury, not the date that the underlying UM claim is settled.

Appellant Jamy Hegseth was injured in a motor vehicle collision that took place in 2007.  The at-fault driver fled the scene and was never identified.  Ms. Hegseth brought claims for uninsured motorist benefits against West Bend Insurance and against American Family Insurance.  West Bend insured the vehicle Ms. Hegseth was riding in at the time of the collision and carried a $50,000.00 policy limit.  American Family insured Ms. Hegseth’s own vehicle, which was not involved in the collision, and carried a $100,000.00 policy limit.

On June 14, 2012, Ms. Hegseth settled her underlying claim for uninsured motorist benefits against West Bend for the UM policy limit of $50,000.00.  Ms. Hegseth then brought a claim against American Family for excess UM coverage.  American Family denied her claim, asserting that she had already been fully compensated for her injuries.

On July 9, 2013, Ms. Hegseth brought a district court action against American Family for excess UM benefits.  American Family moved for summary judgment, asserting that the six-year statute of limitations had passed, since it was more than six years since the motor vehicle collision had occurred.  The district court granted American Family’s motion for summary judgment and Ms. Hegseth appealed.  The court of appeals then affirmed the district court’s ruling, and Ms. Hegseth petitioned the supreme court for review.

The court notes that it is well-settled law that the statute of limitations on UM claims is generally six years, and the time limit begins to run when the claim accrues which, the court had previously held, is the date of the motor vehicle collision.  Ms. Hegseth argued to the court that the excess UM claim did not accrue until the underlying UM claim was settled.

However, the court disagreed.  The court states that resolution of the underlying UM claim is not a condition precedent to the excess UM claim.  In fact, the court states, Ms. Hegseth could have brought both UM claims at the same time.  As such, the court finds that the statute of limitations for the excess UM claim began running on the date of the motor vehicle collision.

This case sets important precedent for any situation where an injured party may be making a claim for excess UM coverage; attorneys must be aware that the statute of limitations for these claims begin running on the date of loss, not the date that the underlying UM claim is resolved.

 

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