Reference to Arbitration Did Not Toll Statute of Limitations
Where homeowners sought to arbitrate an insurance coverage dispute within the two-year statute of limitations, but the carrier declined to do so, the homeowners’ failure to file a lawsuit within that two-year period resulted in the claim being dismissed. The Massachusetts Appeals Court held that “it was open to the [homeowners] to file their complaint timely” even while waiting for the carrier to respond to the request for arbitration. What appears to have factored into the court’s decision was that the homeowners waited almost until the end of the two-year period to seek arbitration, and then waited another two years to file suit. Thus, not only did they fail to meet the literal deadline of the statute of limitations, but they also failed to file within “a reasonable period of time” afterward. And so their argument – that the carrier was estopped from defending on the statute of limitations basis due to the carrier’s failure to promptly respond to the request for arbitration – fell on deaf ears with the appellate court. The case is Hawley v. Preferred Mutual Insurance Company, Mass. App. Ct., Sept. 16, 2015, available here.