Nationwide Mut. Insurance v. Shilling, 227 A.3d 171

On April 19, 2011 Margaret Shilling was injured in a rear-end collision; the at-fault driver’s insurer (Agency) offered its $20,000 policy limits. Nationwide provided Shilling with underinsured-motorist (UIM) coverage of $300,000 per person.
Agency’s $20,000 offer was communicated in April 2013; Nationwide consented and waived subrogation on April 23, 2013. Shilling executed the tortfeasor’s release on February 3, 2014 and deposited the settlement check on February 14, 2014.
Shilling formally demanded UIM benefits from Nationwide on January 26, 2015. Nationwide requested additional records and never—on the record before the Court—expressly denied the claim.
Shilling sued Nationwide for breach of contract and UIM benefits on September 23, 2016. The circuit court dismissed as time‑barred, finding limitations began at the date Nationwide consented to the settlement; the Court of Special Appeals reversed, holding limitations began at signing of the release.
The Court of Appeals granted certiorari and held the three‑year limitations period for an insured’s contractual UIM claim begins when the insurer denies the insured’s demand for benefits (i.e., when the insurer breaches the contract). Because Nationwide had not shown a denial more than three years before suit, Shilling’s claim was not time‑barred. The Court affirmed the intermediate appellate court’s judgment but on different grounds and limited Pfeifer.

Issue	Plaintiff's Argument	Defendant's Argument	Held
When does the 3‑year statute of limitations begin to run for an insured’s action against its own insurer for underinsured‑motorist benefits?	Shilling: limitations begin when the insurer denies the claim (breach of contract); alternatively, if exhaustion controls, it begins when the insured settles the tortfeasor.	Nationwide: limitations begin when the tortfeasor’s policy is exhausted — here when Nationwide consented to the $20,000 settlement.	Court of Appeals: limitations begin when the insurer denies the insured’s demand for UIM benefits (breach). No express denial on the record, so Shilling’s suit was timely; Pfeifer is overruled to the extent inconsistent.

Lane v. Nationwide Mut. Ins. Co., 321 Md. 165 (1990) (statute of limitations for uninsured‑motorist contract claim does not run until insurer denies claim)
Pfeifer v. Phoenix Ins. Co., 189 Md. App. 675 (2010) (intermediate appellate decision holding limitations may run at exhaustion—overruled in part)
Mayor & Council of Federalsburg v. Allied Contractors, Inc., 275 Md. 151 (1975) (contract actions accrue and limitations run upon breach)
Ceccone v. Carroll Home Servs., LLC, 454 Md. 680 (2017) (discussion of purposes and policy of statutes of limitations)
Woznicki v. GEICO Gen. Ins. Co., 443 Md. 93 (2015) (background on Maryland’s uninsured/underinsured motorist statute and its remedial purpose)