AI Generated Opinion Summaries

This summary was computer-generated without any editorial revision. It is not official, has not been checked for accuracy, and is NOT citable.

Facts

• In July 2002, Thomas P. Whelan, Sr., was in a parked truck owned by his son, Plaintiff Thomas P. Whelan, Jr., when it was struck by another vehicle. The collision resulted in severe injuries to Whelan, Sr., leading to medical expenses over $100,000 and his death in March 2004. At the time of the accident, the truck's occupants were insured under a State Farm liability policy that ostensibly provided no uninsured/underinsured motorist (UM/UIM) coverage. Following the Supreme Court's decision in Jordan v. Allstate Ins. Co., which required explicit written rejections of UM/UIM coverage for it to be excluded from policies, Plaintiff demanded UM/UIM coverage from State Farm in 2011, which the insurer refused, citing a policy clause that barred claims made more than six years after the accident (paras 2, 4-5).

Procedural History

• [Not applicable or not found]

Parties' Submissions

• Plaintiff: Argued for the reformation of the insurance policy to include UM/UIM coverage equal to the liability limits, based on the Supreme Court's decisions in Progressive N.W. Ins. Co. v. Weed Warrior Servs. and Jordan v. Allstate Ins. Co. Plaintiff also contended that the policy's time limit for UM/UIM claims, which barred claims made more than six years after the accident, was unreasonable and unenforceable (paras 5-7).
• Defendant (State Farm): Contended that the lawsuit was barred by the policy's limitations provision, which required any arbitration or suit against the insurer to be commenced within six years from the date of the accident. Additionally, State Farm argued that ignoring a contractual provision and providing a benefit for which the insured never paid would violate constitutional principles (para 6).

Legal Issues

• Whether a policy provision that bars enforcement of UM/UIM coverage six years after an accident is reasonable and enforceable.
• Whether the Supreme Court's decision in Jordan, requiring explicit written rejections of UM/UIM coverage, applies retroactively to policies issued before the Court's decision in Montaño v. Allstate Indemnity Co. (paras 8-9, 20-28).

Disposition

• The Supreme Court held that a limitations clause based solely on the date of the accident, without consideration of the actual accrual of the right to make a UM/UIM claim, is unreasonable and unenforceable as a matter of law.
• The Court also held that judicial reformation under Jordan does not extend to historical insurance contracts formed before the issuance of Montaño in 2004. Therefore, the policy in question, issued before Montaño, is not subject to retroactive reformation to include UM/UIM coverage (paras 3, 19, 28).

Reasons

• Per CHARLES W. DANIELS, Justice (PETRA JIMENEZ MAES, Justice; EDWARD L. CHÁVEZ, Justice; NAN G. NASH, Judge, concurring): The Court reasoned that a limitations clause that could potentially bar a claim before a lawful cause of action accrues does not align with the principles of fairness or the legislative intent behind UM/UIM statutes. The Court emphasized the importance of protecting insured individuals from uninsured motorists and ensuring that rejections of UM/UIM coverage are made knowingly and intelligently. It was determined that the policy's limitations provision did not meet these standards. Furthermore, the Court clarified that its decision in Jordan, which built upon the new direction set by Montaño regarding UM/UIM coverage rejections, should not be applied retroactively to policies issued before Montaño. This decision was based on the principle that insurers could not have anticipated the requirement for explicit written rejections of UM/UIM coverage before Montaño established such a standard (paras 10-19, 20-29).