A Partial Denial Starts the Running of the Private Limitation of Action

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A construction company with an assignment from an insured of its claim benefits sued more than two years after a partial denial of the claim only to face a motion for summary judgment based on a private limitation of action provision in the insurance policy. In Affordable Construction Services, Inc. v. Church Mutual Insurance Company, S.I., Civil Action No.: 1:19-cv-01288-STA-jay, United States District Court For The Western District Of Tennessee Eastern Division (March 1, 2021).

ZALMA OPINION

When an insurance company pays a claim for what it believes to be the full amount of indemnity owed to the insured and the insured (or its assignee) dispute that decision, the claim in excess of the payment made, was effectively denied and the refusal to pay more started the running of the private limitation of action provision. The undisputed facts presented revealed that Affordable Construction’s suit was filed more than two years after the denial of any claim over the amount paid, defeated Affordable Construction’s claims.