Does An Action Against An Insurer Become Time-Barred If It Is Filed After the 10-Year Limitation Period ?
In Dial Corp. v. Marine Office of America, 318 Ill. App. 3d 1056, 743 N.E.2d 621, 252 Ill. Dec. 753 (2001) a cargo owner brought an action against a motor carrier's insurer seeking a declaratory judgment as to whether the insurer owed a duty to indemnify the motor carrier, a defendant in an underlying lawsuit. Dial Corp., 318 Ill. App. 3d at 1058.
The Dial Corp. court noted that, in the absence of a specific and clear provision that limited the period within which the lawsuit must be filed, the 10-year statute of limitations for contract actions, set forth in section 13-206 of the Civil Code, applied to the action. Dial Corp., 318 Ill. App. 3d at 1066.
The Dial Corp. court then found that the plaintiff's action was filed after the 10-year limitations period had lapsed, making it time-barred. Dial Corp., 318 Ill. App. 3d at 1066.
In so finding, the Dial Corp. court noted that "the 10-year statute of limitations period is not tolled by operation of section 143.1 of the Illinois Insurance Code.
That provision, tolling the running of a limitations period from the date proof of loss is filed until the date the claim is denied, applies only to limitation periods contained in the policy." Dial Corp., 318 Ill. App. 3d at 1066.