No UM/UIM Coverage Supports Denial & Starts Running of Limitations

Statute of Limitations Ran From Denial of Claim

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In Glenna L. Novak And Estate Of Jeffery Leonard Novak, A/K/A Estate Of Jeffery L. Novak By And Through Glenna L. Novak, Executrix v. Mutual Benefit Insurance Company, No. 1592 MDA 2021, No. J-S23016-22, Superior Court of Pennsylvania (October 14, 2022) when the plaintiffs lawyer admitted a letter was a denial of a UM/UIM claim that denial started the running of the statute of limitations.

Glenna L. Novak and the Estate of Jeffrey Leonard Novak (collectively “Appellants”) appealed from the order granting summary judgment in favor of Mutual Benefit Insurance Company (“MBIC”).


In June 2011, Jeffrey Leonard Novak (“Decedent”) was operating a motorcycle when a vehicle driven by Roy E. Wright made a left turn across Decedent’s lane of travel, causing the motorcycle to strike the vehicle. Decedent was thrown from his motorcycle and sustained injuries, including severe head trauma, which resulted in death.

Appellants sought recovery from Wright, who had an insurance policy through Progressive Specialty Insurance Company (“PSIG”). Wright’s policy had a bodily injury limit of $50,000, which PSIG tendered. Appellants also submitted a claim for underinsured motorist (“UIM”) coverage under Decedent’s motorcycle policy (“motorcycle policy”). The motorcycle policy was issued by Progressive Advanced Insurance Company (“PAIC”). PAIC informed Appellants that Decedent had rejected UIM coverage. Appellants sued, contending the UIM rejection was ineffective, and they eventually reached an agreement to resolve the suit for $20,000.

Appellants’ counsel wrote to MBIC, which had issued insurance on two of Appellants’ other vehicles, a car and a truck, seeking consent to settle the two claims. In a letter dated October 3, 2012, MBIC stated the motorcycle that Decedent was driving at the time of the accident was not insured by MBIC. Therefore, MBIC explained, UIM coverage was not available under its policy and its consent was not required for settlement.

Appellants later made a claim to MBIC for UIM coverage under the personal auto policy. MBIC denied UIM coverage, stating it had previously denied coverage in the October 2012 letter, when it explained that its consent was unnecessary for the settlements. Appellants sued in February 2018 (six years after the first denial), and they filed a complaint in May 2019. They alleged breach of contract, sought a declaratory judgment, and requested damages for bad faith.

MBIC ultimately filed a motion for summary judgment arguing, in part, that Appellants’ claims were barred by the statute of limitations.


Appellants maintain the accrual date for the action could not have occurred before August 2017, when they submitted a UIM claim to MBIC. Appellants contended that an unsolicited opinion or observation by an insurer that it may or may not have coverage applicable to a particular matter is different from an insurer processing a claim affirmatively stated and submitted by an insured to the insurer for action and denying that insured the specific benefits claimed.

Pennsylvania law provides for a four-year statute of limitations on breach of contract actions and related declaratory judgment actions. In this case the trial court concluded the limitations period began to run when MBIC denied coverage in the October 2012 letter and therefore the current case, commenced in 2018, was barred by the statute of limitations.

It cannot genuinely be disputed that MBIC denied coverage of the subject accident by letter dated October 3, 2012. Although Appellants had not yet made a claim under their MBIC Policy, a plain reading of the 2012 letter makes clear that MBIC was denying coverage for the subject accident. In order to file a timely breach of contract claim, Appellants should have filed their action no later than October 3, 2016, which they did not do.

Therefore, the Court of Appeal concluded that Appellants’ claims were untimely, and summary judgment should be entered in favor of MBIC on all claims.

The October letter stated that UIM coverage is not available under the policy. Even Appellants’ counsel admitted that upon receipt of the letter in 2012, he interpreted the letter as a denial of coverage. Therefore, the record supported the finding of a concession by counsel and an obvious failure to sue timely which defeated the suit.


When the lawyer for the plaintiff concedes that there was a denial in 2012 and the suit was not filed until 2018 he has conceded the statute of limitations applied and the suit was untimely probably because he agreed there was no coverage under the MBIC policy. When a plaintiff has a viable cause of action against an insurer there is no excuse for failing to sue within a four year statute of limitations.

(c) 2022 Barry Zalma & ClaimSchool, Inc.

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 54 years in the insurance business. He is available at and and receive videos limited to subscribers of Excellence in Claims Handling at to Excellence in Claims Handling at

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An insurance coverage and claims handling author, consultant and expert witness with more than 48 years of practical and court room experience.
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