When representing policyholders with first-party property insurance claims, being cognizant of applicable statute of limitations for particular jurisdictions is critical in order to avoid losing an opportunity to have the policyholder’s case heard. One of my colleagues, Jean Niven, discussed this topic in a very informative video blog last week.
In Tennessee, a breach of contract claim on an insurance policy shall be commenced within six years after the cause of action accrues.1 It is also important to distinguish that Tennessee has a three-year statute of limitations for actions for injuries to real or personal property. See Tenn. Code. Ann. §28-3-105.
In determining whether the three year or the six year statute of limitations is applicable, Tennessee courts look to the “gravamen of the action rather than its designation as an action in tort or contract” and “the subject matter of the controversy rather than the remedial procedure employed.”2
Finally, in Tennessee, a policyholder should be aware that a statute of limitations for breach of an insurance policy may be shortened by the terms of the policy as long as the shorter period is reasonable.3
1 See Tenn. Code. Ann. § 28-3-109(a) and Bluff Springs Apartments Ltd v. People’s Bank of the South, 2010 WL 2106210 (Tenn. App. May 26, 2010)(where an insured is seeking damages based upon a breach of the contractual promise to insure, the claim is subject to a six-year statute of limitations).
2 Taylor v. Trans Aero Corp., 924 S.W.2d 109, 112-13 (Tenn. Ct. App. 1995) (involving a suit seeking recovery of damages based on the defendants’ breach of the contractual promise to insure an aircraft, the gravamen of the claim is breach of contract and the six year statute of limitations under Tenn. Code. Ann. § 28-3-109(a) applied.)
3 See Wynne v. Stonebridge Life Ins. Co., 694 F. Supp. 2d 871, 875 (W.D. Tenn. 2010); see also Boaz v. Federal Exp. Corp., 742 F.Supp.2d 925 (W.D. Tenn. September 24, 2010).