Jimenez v. Allstate Indemnity Co.
765 F. Supp. 2d 986
E.D. Mich.2011Background
- Jimenez alleges Allstate underpaid his June 11, 2006 loss and filed suit October 22, 2007.
- Jimenez notified Allstate of the loss around June 15, 2006; an offer of $48,000 was made on November 6, 2006 and rejected, with a check for $48,000 issued November 20, 2006 and cashed December 6, 2006.
- Allstate’s February 2, 2007 letter stated it stood by the $48,000 evaluation and would not supplement payment.
- The parties disputed whether tolling applies to underpayment and when (if ever) Allstate formally denied liability.
- Michigan mandatory tolling provisions and state law require tolling from notice until a formal denial; the court ultimately held the action timely under the statutory scheme.
- The court invalidated Allstate’s tolling provision as conflicting with the statutory mandate and reversed a prior limitation restricting potential class members to Michigan policyholders with losses after October 22, 2006.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether underpayment constitutes denial of liability for tolling. | Jimenez argues denial includes underpayment per Bourke v. North River. | Allstate argues denial requires a formal denial of liability, not merely underpayment. | Underpayment constitutes denial of liability; tolling applies. |
| Whether Allstate formally denied liability and when. | Jimenez asserts denial occurred when Allstate paid and later correspondence did not clearly deny further liability. | Allstate contends no formal denial occurred. | Allstate formally denied liability on February 2, 2007. |
| What is the applicable tolling provision—statutory or contractual? | Statutory tolling should control if it conflicts with the policy provision. | Policy tolling should control if properly construed. | Statutory provision controls; Allstate's contractual tolling is void; tolling from notice June 15, 2006 until February 2, 2007, plus time after, renders the suit timely. |
Key Cases Cited
- Bourke v. N. River Ins. Co., 117 Mich. App. 461 (Mich. App. 1982) (denial of liability includes underpayment; tolling can apply when formal denial occurs)
- Ford Motor Co. v. Lumbermens Mut. Cas. Co. (In re Certified Question), 413 Mich. 22 (Mich. 1982) (established tolling language: period tolled from notice until formal denial)
- Randolph v. State Farm Fire & Cas. Co., 229 Mich. App. 102 (Mich. App. 1998) (mandatory provisions applied to insurance contracts and tolling rules)
- William H. Sill Mortgages, Inc. v. Ohio Cas. Ins. Co., 412 F.2d 341 (6th Cir. 1969) (laches and tolling principles in insurance context)