Florida Appellate Court Reverses Lower Court Decision, Remanding Summary Judgment Insurance Case Back to Trial Court

Recently, the district court of appeals for the State of Florida Sixth District issued an opinion in an appeal involving an insurance claim between Rosemary Arway and the Progressive American Insurance Company (Progressive). The trial court entered summary judgment against Arway on the grounds that her claim for underinsured motorist (UM) benefits under an insurance policy issued by Progressive was time-barred by a five-year statute of limitations running from the date of Arway’s collision with an underinsured, third-party tortfeasor. Progressive’s insurance contract with Arway, however, tolled
the statute of limitations until the tortfeasor’s bodily injury (BI) liability insurance benefits were fully paid to Arway. Accordingly, Arway timely filed her UM claim against Progressive, and the appellate court reversed and remanded the case for further proceedings.

Facts of the Case

On August 25, 2015, Arway was seriously injured in an automobile collision with an underinsured motorist. At the time of the collision, Arway was covered under a Florida automobile insurance policy issued by Progressive, which included UM benefits coverage. The UM coverage section of the policy (Part III) included an exhaustion provision, conditioning Progressive’s payment of UM benefits on the payment of all BI liability benefits by the underinsured motorist’s insurer, and the policy’s “General Provisions” section (Part VII) included a no-action provision, conditioning suit against Progressive on compliance with all policy terms.

On November 27, 2018, in accordance with the policy, Arway notified Progressive that the underinsured motorist’s insurer had tendered its BI coverage limits of $50,000 to settle Arway’s claims against the motorist, and Arway requested that Progressive approve the settlement and release of Arway’s claims against the motorist. On December 26, 2018 (three years, four months after the collision), Progressive approved the settlement and offered to pay Arway $1,000 to resolve her claim for UM benefits under the Progressive policy. Arway and Progressive traded several additional demands and counteroffers, and on December 21, 2020 (five years, four months after the collision), Arway demanded $150,000 from Progressive to resolve her UM claim. On January 15, 2021, Progressive denied Arway’s UM claim on the ground that the statute of limitations had run on August 25, 2020—five years after Arway’s collision with the underinsured motorist.

On January 25, 2021, Arway sued Progressive for breach of the policy’s UM provisions. The trial court held Arway’s UM claim was time-barred and entered final summary judgment for Progressive on March 15, 2022. Arway timely appealed the judgment.

On appeal, the appellate court found that Arway sued Progressive less than two years after Progressive approved Arway’s settlement with the tortfeasor’s liability carrier, which was well within the applicable five-year statute of limitations as tolled by the policy language.

Accordingly, the appeals court reversed the trial court’s summary judgment against Arway and remanded the case for proceedings consistent with the appellate opinion.

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