(Article from Insurance Law Alert, June 2018)
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A Massachusetts federal district court ruled that a statutory claim against an insurer for unfair and deceptive business practices accrues no later than the date of the last alleged settlement misconduct. Hong v. Northland Ins. Co., 2018 WL 2435196 (D. Mass. May 30, 2018).
In November 2017, Hong sued his insurer for unfair and deceptive practices under Massachusetts statutory law (Mass. Gen. Laws ch. 93A, § 9). The complaint alleged that in September 2013, the insurer withdrew a $4,000 settlement offer and that in November 2013, a trial verdict was entered against the insurer in the amount of nearly $60,000. The insurer argued that the statutory claim was time-barred under the applicable four-year statute of limitations. The court agreed.
The court held that the claim accrued no later than September 2013, the last date of settlement activity. The court stated: “The injury alleged here is the failure to offer a reasonable settlement under the circumstances. This was fully known as of September 24, 2013 when the defendant insurer rescinded its $4,000 offer.” The court rejected Hong’s assertion that the claim did not accrue until the adverse judgment was entered against the insurer, noting that the statute of limitations begins when actionable injury or harm occurs, which in this case, was the rescinding of the settlement offer.