SB 3
Modifies the statute of limitations for personal injury claims from five years to two years
Sponsor:
LR Number:
0851S.01I
Last Action:
4/19/2021 - Informal Calendar S Bills for Perfection
Journal Page:
Title:
Calendar Position:
Effective Date:
August 28, 2021

Current Bill Summary

SS/SB 3 - This act modifies provisions relating to civil actions, including statutes of limitations for personal injury and certain contract claims, arbitration awards, covenants not to execute, contracts to limit recovery, and intervention in court proceedings for insurance companies.

STATUTE OF LIMITATIONS FOR PERSONAL INJURY CLAIMS (SECTIONS 516.120 AND 516.140)

Currently, actions for contracts or personal injury must be brought within five years from the time the injury occurred. This act states that actions for personal injury shall be brought within two years from the time the injury occurred. Additionally, actions against an insurer relating to uninsured motorist coverage or underinsured motorist coverage, including any action to enforce such coverage, shall be brought within two years.

These provisions shall only apply to causes of action that accrue on or after August 28, 2021.

These provisions are substantially similar to HB 922 (2021) and similar to HB 855 (2021), SB 633 (2020), SB 96 (2019), and SB 934 (2018).

ARBITRATION AWARDS AGAINST INSURERS (SECTION 435.415)

This act provides that no arbitration award shall be binding, admissible in evidence, or provide the basis for any judgment or decree against any insurer, as defined in the act, unless the insurer has agreed in writing to the arbitration proceeding. Additionally, any arbitration award shall not be subject to garnishment, enforcement, or collection from any insurer unless the insurer has agreed in writing to the written arbitration agreement. Unless otherwise required by the insurance contract, an insurer's election to not participate in arbitration shall not constitute or be construed as bad faith. These provisions shall not apply to any arbitration required by statute or arbitration agreements preceding the date of injury or loss.

COVENANTS NOT TO EXECUTE, CONTRACTS TO LIMIT RECOVERY, AND INTERVENTION FOR INSURERS (SECTION 537.065)

Currently, any person having an unliquidated claim for damages against a tort-feasor may enter into a contract with the tort-feasor or any insurer to limit judgments to specified assets if the insurer has the opportunity to defend the tort-feasor without reservation but refuses to do so. This act provides that such person may enter into a contract with the tort-feasor or any insurer if the insurer has refused to withdraw a reservation of rights or declined coverage for such unliquidated claim.

If a tort-feasor rejects an insurer's defense of any claim that is the subject of a contract in this provision, then any judgment on that claim shall not be subject to garnishment, enforcement, or collection from the insurer and shall not be binding on or admissible in any action against the insurer. This provision shall not apply to a contract entered into by an individual or entity whose aggregate premiums for all property and casualty insurance, excluding workers' compensation, were equal to or greater than $100,000 in the 12-month period prior to the date of the contract.

No party to a contract to limit recovery may assign any right, claim, or cause of action for bad faith, breach of fiduciary duty, or extra-contractual liability arising out of any unliquidated claim for damages that is subject to such contract.

Currently, the insurer shall be provided with written notice of the execution of the contract and shall have 30 days to intervene before a judgment may be entered against a tort-feasor who has entered into such a contract. This act provides that for actions seeking a judgment on a claim against a tort-feasor pending at the time of execution of the contract, the tort-feasor is required to provide the insurer with a copy of the executed contract and a copy of the action within 30 days of execution of the contract. For actions which were pending at the time of execution but were later dismissed, the tort-feasor shall provide the insurer with a copy of the executed contract and the action within 30 days of any refiling of the action or the filing of any subsequent action seeking a judgment on the claim. If no action is pending at the time of the execution of any contract, the tort-feasor shall provide notice within 30 days after notice of any action. Judgment shall not be entered against any tort-feasor until the insurer has received written notice for at least 30 days. Furthermore, the act specifies that the insurers have the unconditional right to intervene in any pending civil action involving the claim for damages within 30 days of receiving notice.

This act provides that insurers intervening in a court proceeding where the tort-feasor has contracted to limit his or her liability to specified assets shall have all the same rights and defenses as are afforded to defendants, including any rights or defenses that would have been available to the tort-feasor in the absence of a contract. Additionally, the intervenor shall have reasonable and sufficient time to meaningfully assert its position. No stipulations, scheduling orders, or other orders affecting the rights of intervenors and that were entered prior to intervention shall be binding upon the intervenor. These provisions shall not alter or reduce an intervening insurer's obligations to any insureds other than the tort-feasor, including any co-insureds.

All terms of any covenant not to execute or of any contract to limit recovery to specified assets shall be in writing and signed by the parties. No unwritten terms shall be enforceable against any party, insurer, or any other person.

In actions for bad faith, any agreement between the tort-feasor and the claimant shall be admissible in evidence. Furthermore, the exercise of any rights under this provision shall not constitute or be construed as bad faith. In any claim for bad faith, breach of fiduciary duty, or extra-contractual liability of any kind against any insurer arising out of a claim that is the subject of an agreement in this provision, the additional damages shall be limited to amounts not to exceed 20% of the first $1500 of any covered loss and 10% of the amount of any covered loss in excess of $1500 and a reasonable attorney's fee.

Nothing in these provisions shall be construed to prohibit an insurer from bringing a separate action for declaratory judgment, and if any such action is commenced within 30 days after the issuance of any written declination of coverage or reservation of rights, no contract under this provision shall be effective for a period of one year from the date the insurer gives a declaratory action to determine any coverage obligations.

These provisions are similar to SB 179 (2021), HB 345 (2021), provisions in SCS/HCS/HB 2049 (2020), in HCS/SCS/SB 662 (2020), in SS#1/SCS/SB 591 (2020), SCS/SB 726 (2020), SCS/SB 49 (2019), HB 120 (2019), and in SCS/HB 186 (2019).

KATIE O'BRIEN