The statute of limitations begins to run on an uninsured motorist claim when an alleged breach of a contractual duty takes place, the Pennsylvania Supreme Court has ruled in a case that caused a clash among justices after the court tweaked the question under consideration two weeks after oral arguments.

A 6-1 majority found Nov. 22 in Erie Insurance Exchange v. Bristol that a cause of action accrues when an insurance contract is allegedly breached, not when a claimant first learns of the other driver's insurance status following an accident, as the Superior Court had determined.

“This [lower court] conclusion is not adequately grounded in the pertinent statutory text, prevailing statute of limitations doctrine, or significant public policy concerns,” Justice Sallie Updyke Mundy wrote for the majority. “Accordingly, we hold that statute of limitations principles attending contract claims apply, and that the running of the statute is commenced upon an alleged breach of a contractual duty, which in this case would be occasioned by the insurer's denial of coverage or refusal to arbitrate.”

Justice David N. Wecht issued a dissenting opinion rebuking the majority as “apparently eager to overturn more than 30 years of Superior Court precedent” by allowing Michael Bristol to challenge a legal principle that he had conceded in the lower courts, resulting in a “choose-your-own-adventure litigation strategy.” Wecht issued a dissenting statement in May after the court rewrote the question on appeal to consider whether the Superior Court's decision had created a new rule that ran contrary to prior Supreme Court decisions and the Arbitration Act.

According to the majority opinion, Bristol was injured in a 2005 hit-and-run while in the scope of his employment for RCC Inc., which was insured through Erie Insurance Exchange with a UM/UIM coverage of $500,000 per accident. The policy included a binding arbitration clause. Nearly two years later, in 2007, Bristol put Erie on notice of his UM claim, and the following month Erie issued a letter reserving its rights.

The parties selected arbitrators and, in 2012, exchanged correspondence regarding Bristol's unrelated incarceration and the need to delay proceedings. No action was taken until Erie filed an action for declaratory judgment in 2013, claiming Bristol was time-barred by the four-year statute of limitations. The following year, Erie filed a motion for summary judgment asserting that the statute began to run on the date of the accident when Bristol became aware that he had a UM claim. The trial court granted Erie's motion and the Superior Court affirmed, reasoning that the statute begins to run when an insured sustains an injury in an accident and knows the other vehicle is uninsured. The court also held that Bristol was required to commence his action within the required time period by filing a complaint or petition with the court.

Bristol argued before the justices that for a cause of action based on a contract to trigger the statute of limitations, it must be based on a breach of that contract. Erie contended that failing to start the clock on the knowledge that a UM claim exists would allow claimants an unlimited window to extend a matter.

Applying general contract principles to the enforcement of a UM claim would lead to the statute commencing when an insurer is alleged to have breached its duty, Mundy said, but Erie argued that insurance contracts are viewed as special cases.

Mundy found no reason to deviate from the norm, noting that any apprehensions about an insured delaying submission of a claim or an insurer delaying action on a claim “do not justify departing from the normal breach of contract principles attendant to triggering the statute of limitations.” The court also lacked any public policy ground or legislative intent sufficient to create a special rule, she said. The decision rejected the Superior Court's finding that Bristol missed his window to commence an action.

“Because it is undisputed that Erie has not refused arbitration or denied coverage in this case, it follows that Bristol had no accrued cause of action to initiate through the court either by complaint or motion to compel arbitration,” Mundy said. “We determine, therefore, that the trial court erred in granting summary judgment to Erie in its declaratory judgment action on the basis that the statute of limitations had expired for Bristol to assert his UM claim.”

Daniel J. Siegel, who represented Bristol, said the decision was consistent with long-established contract principles. Jessica Bowman of Pancio Law Group, who represented Erie, did not respond to a request for comment.