Karen Robinson v. Allied Property and Casualty Insurance Company , 816 N.W.2d 398 ( 2012 )

IN THE SUPREME COURT OF IOWA
No. 10–1721
Filed June 29, 2012
KAREN ROBINSON,
Appellant,
vs.
ALLIED PROPERTY AND CASUALTY INSURANCE COMPANY,
Appellee.
On review from the Iowa Court of Appeals.
Appeal from the Iowa District Court for Pottawattamie County,
Timothy O’Grady, Judge.
Defendant insurance company contends plaintiff’s suit for
underinsured motorist benefits is barred by two-year contractual
limitations period. DECISION OF COURT OF APPEALS VACATED;
DISTRICT COURT SUMMARY JUDGMENT AFFIRMED.
Randall J. Shanks of Shanks Law Firm, Council Bluffs, for
appellant.
Joseph D. Thornton and Marvin O. Kieckhafer of Smith Peterson
Law Firm, LLP, Council Bluffs, for appellee.
2
WATERMAN, Justice.
In this appeal, we must decide whether to judicially invalidate an
insurance contract requirement that the insured file her lawsuit for
underinsured motorist coverage (UIM) within two years of her auto
accident. Plaintiff, Karen Robinson, argues the deadline is unenforceable
because, although she was still experiencing pain two years after the
accident, only later did she discover the full extent of her injuries and
realize her claim exceeded the other driver’s liability limits. She filed this
UIM action against her insurer, defendant, Allied Property and Casualty
Insurance Company, nearly six years after the accident. The district
court granted Allied’s motion for summary judgment enforcing the
contractual deadline as reasonable. The court of appeals reversed,
holding the two-year limitation period “was unreasonable under these
circumstances.” We granted Allied’s application for further review.
We hold this two-year UIM insurance policy deadline is enforceable
as a matter of law because it matches the two-year statute of limitations
in Iowa Code section 614.1(2) (2009) for personal injury actions. The
Iowa legislature chose that statutory deadline for lawsuits alleging
personal injuries, and we decline to invalidate the same limitations
period as unreasonable in a contract for UIM coverage. In both
situations, the injured party must file suit within two years even if the
full extent of the injury is not reasonably discovered until later.
I. Background Facts and Proceedings.
On June 15, 2004, Karen Robinson injured her neck in a car crash
caused by another driver insured by State Farm with $100,000 liability
policy limits. At the time of the accident, Robinson carried an
underinsured motorist policy with Allied with a $50,000 limit. The Allied
policy provided:
3
No one may bring a legal action against us under this
Coverage Form until there has been full compliance with all
the terms of this Coverage Form. Further, any suit against
us under this Coverage Form will be barred unless
commenced within two years after the date of the accident.
(Emphasis added.)
Paramedics took Robinson by ambulance to a hospital for
treatment of her injuries, and she was not released until the next day.
She was instructed to follow up with her family physician, Dr. Johnson.
He diagnosed a neck sprain and strain and prescribed a regimen of
physical therapy and anti-inflammatories. In October, Dr. Johnson
noted Robinson was continuing to have neck pain and numbness in her
arms and hands. He recommended a nerve-conduction study, which
was interpreted as normal. In December, Dr. Johnson noted the
physical therapy was not helping Robinson and that she “did not have
improvement of any significance” and “[c]ontinued to have quite limited
[range of motion] and pain with movement.” A second nerve-conduction
study conducted on December 29 again failed to document a physical
abnormality.
In January 2005, although Robinson was still experiencing
discomfort, Dr. Johnson released her from his care for the injuries
sustained in her accident. In a report authored in March 2005,
Dr. Johnson stated: “I think as time progresses, the soft tissue injury will
gradually repair itself. It is not going to be an overnight type resolution.”
He predicted “no possible complications or negative secondary effects”
and did not anticipate any additional procedures or treatments. “It is my
opinion,” Dr. Johnson wrote, “that there will be no restrictions upon
Ms. Robinson and it is my opinion that this will gradually improve with
time although it will probably be a long time.”
4
On August 1, Robinson’s attorney opened settlement discussions
with State Farm, the insurance carrier for the driver who caused the
accident. Based upon Dr. Johnson’s prognosis and her medical
expenses of $5111, her initial settlement demand was for $40,000, well
within State Farm’s $100,000 limits. State Farm made a counteroffer to
settle for $7000. Robinson subsequently reduced her settlement demand
to $30,000 and then $20,000 before negotiations with State Farm broke
down. She filed suit against State Farm’s insured on October 27, 2005,
with more than eight months remaining in the two-year limitations
period.
Meanwhile, Robinson had returned to Dr. Johnson the preceding
month because of continuing neck pain. She underwent a cervical MRI
on September 10, 2005. After Robinson’s MRI study reported a normal
cervical spine, she consulted a pain specialist who administered cervical
facet joint injections in November and December of 2005. The injections
provided temporary pain relief for a few weeks each time, but her pain
returned.
As the two-year anniversary of her car accident approached, her
neck and back pain persisted, and her pending tort action against State
Farm’s insured was nowhere close to settlement. In the first six months
of 2006, Robinson continued to see Dr. Johnson occasionally with
complaints of neck and back pain. Robinson’s attorney did not file a
UIM action or ask Allied to suspend the June 4, 2006 deadline through a
tolling agreement, and that contractual deadline expired.
In November 2006, two years and three months after the accident,
Robinson underwent an MRI of her lumbar spine, which indicated a mild
central bulge in L4–5. A month later, an x-ray of her cervical spine
indicated mild C6–7 degenerative disc changes. She began physical
5
therapy in late December. Although the therapy provided some relief,
she continued to experience pain. In February 2007, Robinson was
examined by a surgeon, Dr. Jensen, who for the first time proposed a
surgical option for Robinson’s condition. Dr. Jensen performed an
anterior cervical interbody discectomy on April 7, 2007. The surgery was
successful, and Robinson experienced significant improvement.
Dr. Jensen authored a report in July 2007 stating Robinson’s
“[c]urrent prognosis is guarded. She may well harbor a permanent
degree of paracervical pain as a result of her injury.” He estimated
future medical expenses in the range of $5000 to $10,000 and predicted
that Robinson will have permanent activity restrictions.
At the end of July 2008, State Farm offered its policy limit of
$100,000 to settle Robinson’s claim. Robinson promptly notified Allied of
this development and also offered to settle her UIM claim against Allied
for $50,000, the policy limit. On August 13, Allied denied her UIM claim
as untimely based on the two-year limitation contained in Robinson’s
insurance contract. On August 28, Robinson accepted State Farm’s
policy limits settlement.
Robinson waited over another twenty-one months to file this UIM
action against Allied on May 13, 2010, nearly six years after her auto
accident. Allied moved for summary judgment on grounds the two-year
deadline in its UIM policy had expired. Robinson resisted, arguing the
deadline was unreasonable because she was unable to ascertain her
damages within two years of her accident. The district court ruled the
two-year provision was reasonable and entered summary judgment for
Allied because the UIM claim was untimely. Robinson appealed, and the
court of appeals reversed the summary judgment, concluding the two-
year limitation was unreasonable under the circumstances because
6
Robinson was not “able to ascertain her damages” within that period.
We granted Allied’s application for further review.
II. Scope of Review.
We review a district court’s grant of summary judgment for errors
at law. Nicodemus v. Milwaukee Mut. Ins. Co., 612 N.W.2d 785, 786
(Iowa 2000); Iowa R. App. P. 6.907. We view the evidence in the light
most favorable to the nonmoving party. Faeth v. State Farm Mut. Auto.
Ins. Co., 707 N.W.2d 328, 331 (Iowa 2005). Summary judgment is
appropriate when there is no genuine issue of material fact and the
moving party is entitled to judgment as a matter of law. Id.; Iowa R. Civ.
P. 1.981(3).
In this case, the facts relevant to the limitations issue are
undisputed, so the enforceability of the contractual limitations period is
a question of law for the court. Nicodemus, 612 N.W.2d at 787. We will
decide if “the district court correctly applied the law to the undisputed
facts in deciding that [Allied] was entitled to summary judgment.” Id.
III. Analysis.
Iowa law requires insurers to include UIM coverage in motor
vehicle liability insurance policies unless rejected by the insured. Iowa
Code § 516A.1. A UIM claim is contractual and therefore subject to the
ten-year statute of limitations for written contracts. See Douglass v. Am.
Family Mut. Ins. Co., 508 N.W.2d 665, 666 (Iowa 1993) (citing Iowa Code
section 614.1(5) (1991)), overruled on other grounds by Hamm v. Allied
Mut. Ins. Co., 612 N.W.2d 775, 784 (Iowa 2000). However, as we noted in
Douglass, “[u]nder general contract law, it is clear that the parties may
agree to a modification of statutory time limitations.” Id. We emphasized
that “Iowa has long recognized the rights of insurers to limit time for
claims, irrespective of a legislative imprimatur on such provisions.” Id. at
7
667. In that case, we surveyed the authorities to conclude that the
contractual deadline must allow the insured a reasonable period to sue
for the policy benefits. Id. at 666–68.
We specifically held in Douglass “that the two-year limitation
provided by the policy was valid and enforceable.” Id. at 668. We
enforced that deadline even though the insured “was not aware that the
tortfeasors were judgment proof until the two years had passed.” Id. at
667. We affirmed the summary judgment in favor of the insurer
dismissing the insured’s claim for uninsured motorist (UM) coverage filed
more than two years after the accident. Id. at 668. We reasoned that the
two-year contractual limitation period matched the two-year statute of
limitations for a personal injury action against the tortfeasor. Id. at 667
(“An uninsured motorist provision that allows two years to sue, therefore,
grants as many rights as the plaintiff would have in the case of an
insured tortfeasor.”). We recently reiterated that “an insurer may
reasonably reduce the ten-year statutory limitations period for
contractual claims to a two-year period for filing suit against the
insurer.” Faeth, 707 N.W.2d at 334 n.3.
Robinson argues the two-year contractual deadline in her Allied
policy is unreasonable under the circumstances because she could not
have known the extent of her injuries within that deadline. She relies
primarily on Faeth and Nicodemus, which invalidated as unreasonable
contractual deadlines for UIM claims under different circumstances. The
district court, in a well-reasoned, ten-page ruling concluded:
While Ms. Robinson may have had to file suit before she
realized the full extent of her damages, none of the Iowa
cases dealing with the present issue have held that it is
unreasonable to require an insured to sue before all
components of damages are actually realized. Even the
discovery rule does not permit such delay.
8
Accordingly, the district court granted Allied’s motion for summary
judgment because Robinson failed to file her UIM claim within the two
years allowed by her policy.
A three-judge panel of the court of appeals viewed Iowa law
differently. The panel concluded the reasonableness of a contractual
limitations period is determined in light of the circumstances of the
particular case. The appellate panel concluded Robinson was unable to
ascertain that her damages exceeded the tortfeasor’s liability limits
before her surgery the third year following the accident. The panel
determined the two-year contractual deadline was unreasonable under
these circumstances.
We have not previously invalidated a two-year contractual UIM
deadline on grounds the insured did not reasonably discover the full
extent of her injuries until later. We decline to do so here for the reasons
that follow.
A. Robinson’s Reliance on Faeth and Nicodemus. In Faeth and
Nicodemus, we invalidated contractual deadlines as unreasonable on
grounds inapplicable here. In Faeth, the plaintiff was injured when his
vehicle was rear-ended by a truck owned by Umthun Trucking Company
and operated by its employee. 707 N.W.2d at 330. Umthun was self-
insured for liability under the authority of the United States Department
of Transportation. Id. Plaintiff timely sued Umthun in tort within two
years of the accident. Id. Umthun became insolvent over four years after
the accident. We held “the postaccident insolvency of a legally
sanctioned self-insurer” triggered the statutory right to uninsured
motorists benefits. Id. at 333. Faeth’s policy required UM claims to be
filed within two years of the accident. Id. at 330. Significantly for
present purposes, Faeth could not have filed a claim for UM benefits
9
during the two-year contractual limitations period because Umthun was
solvent and therefore deemed insured. Id. at 334–35. Under those
unique circumstances, we held the two-year limitation in the policy was
unreasonable as applied because it “left Faeth with no time to sue
following the accrual of his claim.” Id. at 335. We noted that UM
benefits are statutorily required and would be forfeited if the contractual
deadline was enforced. Id. at 334–35. By contrast, Robinson had two
years from her accident during which time she could have sued Allied for
UIM benefits. We do not equate her lack of appreciation of the extent of
her injuries to Faeth’s legal inability to bring a UM claim until the self-
insured trucker became insolvent.
Nicodemus also fails to support Robinson’s position. The
contractual limitations provision in that case required the insured to
conclude her tort action by settlement or judgment before filing her UIM
suit within two years of her accident. Nicodemus, 612 N.W.2d at 787–88.
We contrasted that policy provision with the two-year statute of
limitations for personal injury claims in Iowa Code section 614.1(2),
noting “the legislature has deemed it appropriate to give an injured party
two years simply to investigate her claim against a tortfeasor and get her
lawsuit on file.” Id. at 788. Here, the Allied policy merely required
Robinson to file her lawsuit within two years—she was not required to
also conclude her tort claim by settlement or judgment by that deadline.
The policy provision found per se unreasonable in Nicodemus was much
more onerous than the tort statute of limitations. By contrast, the Allied
provision simply imposed the same burden on Robinson as the
legislature imposed on tort claimants—the obligation to file suit by the
two-year anniversary of the accident.
10
Neither Nicodemus nor Faeth required a fact-intensive inquiry into
when the insured knew or should have known her damages exceeded the
tortfeasor’s liability limits.1 We recognize that Faeth invalidated the
contractual limitation “as applied here.” 707 N.W.2d at 335. But, we did
not have to engage in any factual analysis to reach that conclusion. The
only relevant “fact” we had to consider was that Umthun became
insolvent more than two years after the accident. On that basis, we
declined to enforce the clause as a matter of law. Id. at 335 n.4. Here,
by contrast, we are asked to embark on an approach that would require
sifting through the medical evidence to determine whether the insured
had a reasonable basis to believe her damages exceeded the tortfeasor’s
policy limits. Neither Nicodemus nor Faeth requires us to invalidate
1After Faeth, we reiterated the well-settled tenet of contract interpretation that
“whether an agreement is unconscionable must be determined at the time it was
entered.” C & J Vantage Leasing Co. v. Wolfe, 795 N.W.2d 65, 81 (Iowa 2011) (citing
Casey v. Lupkes, 286 N.W.2d 204, 208 (Iowa 1979)). That is the categorical approach
we follow today. The Nicodemus court quoted part of a sentence from a 1963 treatise
that “[t]he reasonableness of a contractual limitations period is determined in ‘ “light of
the provisions of the contract and the circumstances of its performance and
enforcement.” ’ ” Nicodemus, 612 N.W.2d at 787 (quoting 1A Arthur L. Corbin, Corbin
on Contracts § 218, at 311–12 (1963) [hereinafter Corbin]). This language, in context,
does not require the reasonableness of the limitation to be determined case by case, as
applied to the particular facts. The full sentence in that treatise reads as follows:
Although the parties cannot at the time of contracting effectively
bargain not to plead a statute or that the time for suit shall be longer
than that allowed by statute, it is not against the public interest that
they shall then agree upon a shorter time limit than that fixed by statute
if the time agreed upon is not so short as to be unreasonable in light of
the provisions of the contract and the circumstances of its performance
and enforcement.
Corbin § 218, at 311 (emphasis added). The very next sentence in the Corbin treatise
states: “Such time limits in insurance policies have often been held valid.” Id. (footnote
omitted). The italicized language confirms whether the limitations period is
“reasonable” is determined as of the time the contract is entered. The “circumstances of
its performance and enforcement” refer to the type of contract at issue, here, a claim for
UIM coverage, consistent with a categorical approach. Thus, the UIM provision in
Nicodemus was found unreasonable on its face. 612 N.W.2d at 788–89. The categorical
approach is equally appropriate here.
11
Allied’s two-year deadline as unreasonable on grounds that Robinson
could not ascertain the full extent of her injuries within that period.
B. A Contractual UIM Limitation Matching the Two-Year
Statute of Limitations for Personal Injury Tort Claims Is Per Se
Reasonable. Our legislature has determined it is reasonable to require
tort claimants to file lawsuits for personal injuries within two years “after
their causes accrue.” Iowa Code § 614.1(2). Importantly, the statutory
limitations clock begins to run on the date of the motor vehicle accident,
even for more serious injuries that first appear over two years later.
LeBeau v. Dimig, 446 N.W.2d 800, 802–03 (Iowa 1989). In LeBeau, we
held a lawsuit seeking recovery for epilepsy caused by car accident was
time-barred under section 614.1(2), even though plaintiff thought she
had only minor neck injuries until her epilepsy manifested after the two-
year limitation expired. Id. Robinson’s argument that her two-year
contractual limitation is unreasonable because she did not know the full
extent of her injuries is at odds with the policy determination our
legislature made in analogous tort cases.
UIM actions are contract claims, but the trial requires juries to
consider evidence and make findings typical of motor vehicle negligence
actions, including the comparative fault of both drivers and the extent of
personal injuries. Accordingly, it makes good sense for an insurer to
provide for a UIM limitation period matching the two-year deadline in
Iowa Code section 614.1(2) to file suit for personal injuries.
The purpose of our statutes of limitations is to spare courts
the burden of adjudicating stale claims after memories have
faded, witnesses have died, and evidence has been lost. This
purpose explains why the limitation on an action on a
written contract is longer than the limitation on an action in
tort; generally, the evidence surrounding a tort claim is more
likely to disappear or become less reliable over time than the
evidence surrounding a written contract. Cf. Matherly v.
12
Hanson, 359 N.W.2d 450, 457 (Iowa 1984) (observing the
policy reasons for a shorter limitations period on unwritten
contracts than on written contracts).
Wetherbee v. Econ. Fire & Cas. Co., 508 N.W.2d 657, 662 (Iowa 1993)
(McGiverin, C.J., concurring) (citation omitted). In the absence of an
enforceable contractual limitations period, UIM claims are governed by
the ten-year statute of limitations for written contracts. Faeth, 707
N.W.2d at 335. This would require UIM insurers to defend claims with
stale evidence.
We hold it is reasonable, as a matter of law, for a UIM insurer to
select the same two-year deadline from the date of the accident to file a
UIM claim as the legislature prescribed for filing a personal injury tort
action. See Hamm, 612 N.W.2d at 784 (“[T]he insurance company has
the ability, if it so chooses, to clearly articulate the applicable limitations
period for claims against the tortfeasor and the insurer, and the event
upon which the limitations period begins to run.”); see also Faeth, 707
N.W.2d at 334 n.3 (“Our decision in Hamm did not affect our holding in
Douglass that an insurer may reasonably reduce the ten-year statutory
limitations period for contractual claims to a two-year period for filing
suits against the insurer.”). In Douglass, we upheld the two-year
contractual limitation specifically because it matched the statutory
deadline for filing personal injury lawsuits in section 614.1(2). 508
N.W.2d at 667. We rejected the insured’s argument the deadline was
unreasonable in that case because she did not discover the tortfeasors
were judgment proof until over two years after the accident. Id.
Similarly, we decline to conclude Allied’s two-year deadline is
unreasonable as applied to Robinson because she did not ascertain the
full extent of her injuries within that time.
13
Our precedent is consistent with other jurisdictions that enforce
UIM contractual deadlines matching the state’s statute of limitations for
personal injury tort actions. The Ohio Supreme Court made clear a two-
year contractual deadline to bring UIM claims is enforceable because it
matches that state’s statutory deadline for filing tort claims for personal
injuries:
Consistent with our analysis, a two-year period, such as that
provided for bodily injury actions in R.C. 2305.10, would be
a reasonable and appropriate period of time for an insured
who has suffered bodily injuries to commence an action or
proceeding for payment of benefits under the uninsured or
underinsured motorist provisions of an insurance policy.
Miller v. Progressive Cas. Ins. Co., 635 N.E.2d 317, 321 (Ohio 1994).
Miller held a one-year policy deadline is unreasonable because it provides
the insured less protection than if the tortfeasor had been adequately
insured—the same reason we invalidated the UIM limitation in
Nicodemus. Id. The Miller court, however, emphasized a two-year
limitations period to file a UIM claim is reasonable because it matches
the time statutorily allowed to sue the tortfeasor—a deadline the
legislature had deemed reasonable. Id.
Illinois appellate courts have employed a similar analysis in
evaluating the enforceability of UIM contractual deadlines. See Shelton v.
Country Mut. Ins. Co., 515 N.E.2d 235, 240 (Ill. App. 1987) (noting the
insurer is placed “in the boots of the tortfeasor” and the “insured . . .
should not be conferred with rights any different” from a claim against
the tortfeasor); Coyne v. Country Mut. Ins. Co., 349 N.E.2d 485, 486 (Ill.
App. 1976) (“Here the contractual provision has a two year limitation, the
same amount of time plaintiffs would have had to determine financial
14
responsibility for an accident with an insured motorist.”).2 Thus, in
Parish v. Country Mutual Insurance Co., the appellate court affirmed
dismissal of the UIM claim brought by the insured who, like Robinson,
did not appreciate the extent of her injuries until she had surgery over
two years after the accident. 814 N.E.2d 166, 169–70 (Ill. App. Ct.
2004).
As we said in Douglass in the context of uninsured motorist
coverage:
Of course, if the plaintiff had sued a tortfeasor who did
have insurance, she would have to do so within two years.
An uninsured motorist provision that allows two years to
sue, therefore, grants as many rights as the plaintiff would
have in the case of an insured tortfeasor.
508 N.W.2d at 667 (citation omitted). We are applying the same
symmetry principle here.3 The approach advocated by Robinson, on the
other hand, could result in an anomaly. Suppose Robinson’s
negotiations with State Farm had not broken down and the parties had
settled for $20,000 in the fall of 2005. Later, Robinson discovered her
injuries were more serious than she previously thought. Clearly, she
could not sue the tortfeasor again, regardless of the circumstances,
because she had released her tort claim. But, could she sue Allied,
giving a credit for the tortfeasor’s policy limits? Our precedents suggest
she could. Waits v. United Fire & Cas. Co., 572 N.W.2d 565, 573–74
(Iowa 1997) (holding release of underinsured motorist does not bar claim
2We cited Coyne with approval in Douglass, 508 N.W.2d at 667.
3We have discussed both a “broad coverage” view and a “narrow coverage” view
with respect to underinsurance coverage. See Mewes v. State Farm Auto. Ins. Co., 530
N.W.2d 718, 723–24 (Iowa 1995). However, under both “views,” the injured party does
not end up better off than he or she would have been with a tortfeasor who was fully
insured for the loss that occurred. Id.
15
for recovery of UIM benefits). This would make Robinson better off than
she would have been with a fully insured tortfeasor.
C. Ethical and Practical Considerations. Robinson argues
applying the two-year statutory limitation for tort claims is unreasonable
because to recover on her UIM claim she must additionally allege and
prove her damages exceed the tortfeasor’s $100,000 liability limits, which
she was incapable of doing before Dr. Jensen performed surgery on her
nearly three years after her accident. Indeed, she suggests to file a UIM
action when the insured’s damages appear unlikely to exceed the
underlying liability limits would risk sanctions under Iowa Rule of Civil
Procedure 1.413(1) for filing frivolous pleadings. Her concern is
overstated and belied by the common practice in Iowa of filing UIM
claims together with tort claims against the other driver. See Barnhill v.
Iowa Dist. Ct., 765 N.W.2d 267, 272 (Iowa 2009) (indicating that the
standard to be used in determining the reasonableness of an attorney’s
conduct for rule 1.413 purposes is that of “ ‘a reasonably competent
attorney admitted to practice before the district court’ ” (quoting Weigel v.
Weigel, 467 N.W.2d 277, 281 (Iowa 1991)). We do not see this case as
presenting claimants’ counsel with a Hobson’s choice between filing
frivolous claims or losing what might be a meritorious UIM claim. If the
UIM claim potentially has merit, no Iowa court should impose sanctions
for filing it to toll the contractual deadline. Indeed, in Nicodemus, we
noted “the insured could simply commence her action against the
insurer at the same time she files suit against the underinsured
motorist, thereby complying with the two-year limitations period
governing both claims,” and we further observed that, “this course of
action is certainly permissible under our UIM statute.” 612 N.W.2d at
788. We invalidated as per se unreasonable the contractual limitations
16
period in that case that required the insured to conclude her tort claim
before filing her UIM claim within two years of the accident. Id. at 789.
Our state’s trial bar has a long-standing custom and practice of
filing UIM claims together with the tort action against the driver. The
UIM claim is typically stayed with the UIM insurer to be bound by the
verdict in the underlying tort action. See Wilson v. Farm Bureau Mut. Ins.
Co., 714 N.W.2d 250, 262 (Iowa 2006) (recognizing UIM insurer bound by
original judgment on jury verdict in tort action); Handley v. Farm Bureau
Mut. Ins. Co., 467 N.W.2d 247, 249–50 (Iowa 1991) (addressing
bifurcation).
Attorneys facing a contractual deadline should assume the UIM
action will be barred once the contractual deadline expires and should
act to protect the client’s interests. We could find no case sanctioning an
attorney for a frivolous pleading filed to preserve a UIM claim on the eve
of a deadline. The reasonable course of action is simply for the plaintiff’s
counsel to request a tolling agreement from the UIM insurer, which in all
likelihood would be forthcoming. If the UIM insurer balks, the attorney
reasonably can file the UIM claim without violating Iowa Rule of Civil
Procedure 1.413 or Iowa Court Rule 32:3.1. The future course of a
person’s medical condition—especially a neck injury as here—is
inherently open to some doubt. An attorney who has made a reasonable
inquiry and has not received a definitive determination that the client’s
damages will be within the tortfeasor’s policy limits does not violate
either rule by bringing a precautionary action against the UIM carrier.
The district court would have discretion to stay the UIM claim pending
resolution of the underlying tort action or to permit the case to proceed
to trial, as many Iowa personal injury actions do while the plaintiff
continues medical treatment. UIM insurers do not like to incur avoidable
17
defense costs any more than plaintiff’s attorneys like to prosecute UIM
claims expected to be resolved within the tortfeasor’s policy limits. Both
sides will be motivated to agree to toll the UIM contractual statute of
limitations under the circumstances of this case.4
Illinois courts have been down this road repeatedly. The Parish
court’s analysis addresses the practical concerns raised by Robinson as
follows:
“[T]he insured can sufficiently allege a cause of action for
UIM motorist benefits if she has sufficient facts to proceed
against the tortfeasor. The only additional allegations
required are that the insured’s damages and UM–UIM
coverage exceed the tortfeasor’s liability insurance.
Insurance companies that utilize suit limitation provisions
must expect to be subjected to lawsuits which allege the
likelihood of liability under the UM–UIM coverage. Of
course, the insurance company can avoid the lawsuit by
agreeing with the insured to put the UM–UIM issue on hold
until the resolution of the action against the tortfeasor. As a
practical matter, this is an insurance company’s probable
(and most reasonable) course of action.”
814 N.E.2d at 169–70 (quoting Vansickle v. Country Mut. Ins. Co., 651
N.E.2d 706, 707 (Ill. App. Ct. 1995)).
If we were to adopt Robinson’s position, insurance underwriters
would have to assume going forward when setting UIM rates in Iowa that
two-year contractual limitation periods would be unenforceable whenever
4We are concerned about conserving scarce judicial resources. In our view, the
approach we have outlined with respect to UIM claims is less taxing on judicial
resources than litigating the reasonableness of the two-year deadline as applied case by
case. Under an as-applied analysis, courts and perhaps juries would have to make
case-by-case determinations based on medical chronologies whether a claim is even
timely before getting to the merits of that claim.
We are also concerned about fairness to the injured party. Even under a case-
by-case reasonableness approach, this plaintiff sued nearly six years after the accident
and three years after discovering the full extent of her injuries. We do not believe
Robinson had a reasonable expectation of coverage at that point, given the two-year
statute of limitations period for personal injury claims and the corresponding two-year
contractual limitations period in her insurance policy.
18
the insured can argue he reasonably did not realize his claim would
exceed the underlying liability limits. Such fact-sensitive inquiries are
poorly suited for summary judgment and will increase the cost of
litigation. More insureds will be able to sue their UIM insurer ten years
after the accident after avoiding shorter limitations periods in the
insurance contract. This would inject uncertainty into our contract law
by invalidating a bright-line, unambiguous, and reasonable contractual
deadline to file UIM claims within two years of the accident. It is easy to
foresee the result will be to increase auto insurance rates for Iowans.5
D. Freedom of Contract. We should be reluctant to interfere
with the freedom of contract under these circumstances. As the
Vansickle court recognized, “[i]nsurance companies are entitled to
reasonably limit their exposure from an insurance contract.” 651 N.E.2d
at 707. To declare a contractual deadline for UM or UIM claims
unenforceable “is an extraordinary remedy, and we find it unpalatable.”
Id. Our own precedent reflects our traditional caution when asked to
5Insurers are, of course, free to sell UIM coverage with limitations periods longer
than two years or to tie the longer limitation period to the resolution of the tort claim or
the date by which it becomes reasonably apparent to the insured his or her damages
are likely to exceed the other driver’s liability limits. We decline to judicially rewrite or
blue pencil the Allied provision allowing two years from the date of the accident. That is
for the marketplace to resolve, with rates set accordingly.
Basic economics teaches that, if Iowans really want more extensive coverage and
are willing to pay for it, the market will make it available. Moreover, the representatives
of Iowa’s elected government already have the ability to mandate more extensive
coverage if that is what Iowans want. See Iowa Code § 516A.1 (“The form and
provisions of such coverage shall be examined and approved by the commissioner of
insurance.”). The fundamental problem with allowing the enforceability of contract
language to depend on a case-by-case determination of whether the insured reasonably
knew his or her claim exceeded the tortfeasor’s policy limits is that it increases litigation
costs while creating an uncertain liability. Insurers have to charge a premium to
account for the potential risk that contract language will be enforced as well as the
costs of litigating that issue. The coverage that Allied provided in this case is not
“illusory.” It is the same contractual limitations period that we approved in Douglass
and again in Faeth.
19
invalidate contract provisions. “[T]here is a certain danger in too freely
invalidating private contracts on the basis of public policy. This concern
is especially valid in the area of insurance contracts . . . .” Skyline
Harvestore Sys., Inc. v. Centennial Ins. Co., 331 N.W.2d 106, 109 (Iowa
1983). To do so “ ‘is to mount “a very unruly horse, and when you once
get astride it, you never know where it will carry you.” ’ ” Grinnell Mut.
Reins. Co. v. Jungling, 654 N.W.2d 530, 540 (Iowa 2002) (quoting Skyline
Harvestore Sys., 331 N.W.2d at 109)).6
We decline Robinson’s invitation to mount the “unruly horse.”
IV. Disposition.
For these reasons, we determine that the contractual deadline
requiring Robinson to file her UIM claim within two years of her accident
is reasonable and enforceable as a matter of law. Accordingly, we vacate
the court of appeals decision and affirm the district court’s summary
judgment in favor of Allied.
DECISION OF COURT OF APPEALS VACATED; DISTRICT
COURT SUMMARY JUDGMENT AFFIRMED.
All justices concur except Hecht, Wiggins, and Appel, JJ., who
dissent.
6See also Thomas v. Progressive Cas. Ins. Co., 749 N.W.2d 678, 687 (Iowa 2008)
(enforcing named driver exclusion in UIM policy and stating “[t]he power to invalidate a
contract on public policy grounds must be used cautiously and exercised only in cases
free from doubt” (citation and internal quotation marks omitted)). In Galloway v. State,
our court observed, “[a]s the freedom to contract weighs in the balance when public
policy grounds are asserted against the enforcement of a contract, courts must be
attentive to prudential considerations and exercise caution.” 790 N.W.2d 252, 256
(Iowa 2010). The Galloway majority nevertheless relied on public policy to invalidate a
parent’s preaccident liability waiver used for a school field trip. Id. at 258–59. Two
dissenters appropriately would have deferred to the legislature to make the policy
determination whether to disallow such contracts. Id. at 259. The majority opinion in
Galloway recently was described as an “outlier,” with most states enforcing such
liability waivers for nonprofit activities sponsored by schools, volunteers, or community
organizations. Kelly v. United States, 809 F. Supp. 2d 429, 437 (E.D.N.C. 2011).
20
#10–1721, Robinson v. Allied Prop. & Cas. Ins. Co.
HECHT, Justice (dissenting).
I cannot join the majority opinion in this case because it fails to
properly apply a rule of law employed in recent decisions of this court, it
ignores the fundamental difference between tort and contract claims, and
condones the marketing of illusory underinsured motorist insurance
coverage in Iowa.
Although the Iowa legislature prescribed ten years as the time limit
for filing suit for breach of a written contract, Iowa Code § 614.1(5)
(2009), our decisions in Faeth v. State Farm Mutual Automobile Insurance
Co., 707 N.W.2d 328, 334 (Iowa 2005), and Nicodemus v. Milwaukee
Mutual Insurance Co., 612 N.W.2d 785, 787 (Iowa 2000), reaffirmed that
an insurer can impose a shorter time limit for filing suit on underinsured
(UIM) and uninsured (UM) motorist claims. However, these decisions
held that the time limit established in an insurance contract for such
suits must be reasonable. Faeth, 707 N.W.2d at 334; Nicodemus, 612
N.W.2d at 787. Our decisions in Faeth and Nicodemus acknowledged
and respected the importance of freedom of contract, but they did so with
an understanding of the fact that insurance contracts are a different
breed. Insurance contracts are “adhesionary” in nature and therefore
different than other arms-length agreements. This is illustrated by the
fact that Iowans who purchase automobile liability insurance do not have
an opportunity to bargain with their insurance company about the
amount of time they will be permitted to sue to collect UIM benefits if
they are badly injured and later discover the person who caused the
injury failed to purchase enough liability insurance to cover the
damages. Instead, the insurance company dictates this term of the
coverage. The insured takes what the insurance company offers and
21
pays the premium. Because they are largely “take-it-or-leave-it”
propositions, public policy considerations underlying the law have led to
certain mandates imposed on insurance contracts that are not imposed
in other contractual contexts. As the majority has noted, for example,
Iowa Code chapter 516A limits insurers’ freedom of contract by requiring
companies selling automobile insurance in Iowa to offer UM and UIM
coverage as a condition of doing business here. This mandate limiting
freedom of contract arose, at least in part, because market forces were
deemed inadequate to consistently provide important kinds of insurance
protections needed by Iowans.
The common law rule followed by this court in Faeth and
Nicodemus similarly limits freedom of contract by allowing insurance
companies to shorten the time period which policyholders may file suit to
recover UIM and UM benefits only if the time period is reasonable. We
implicitly recognized that if left to market forces unrestricted by
boundaries of reasonableness, companies selling contracts for UM and
UIM coverage could so shorten the time frame for suits against them as
to effectively render the coverage meaningless. In Faeth and Nicodemus,
we refused to enforce contractual provisions allowing insureds only two
years after an injury to sue their insurance companies. Faeth, 707
N.W.2d at 335; Nicodemus, 612 N.W.2d at 789. Our refusal to enforce
the shortened contractual periods of two years for filing suit was based
on the fact that the factual circumstances confronting Faeth and
Nicodemus made it unreasonable to expect them to sue their insurance
companies within two years after injury-causing car crashes. Faeth, 707
N.W.2d at 334–35; Nicodemus, 612 N.W.2d at 788–89. Without the
common law’s mandate of reasonableness, the insurance coverage
22
purchased by Faeth and Nicodemus to protect them against financially
irresponsible drivers would have been illusory.
The majority’s attempts to distinguish our decisions in Faeth and
Nicodemus and justify the failure to grant Robinson the protection of the
reasonableness standard are singularly unconvincing. Although I grant
the accuracy—at the most superficial level—of the proposition that the
factual circumstances faced by Robinson during the two years after her
injury were different than those faced by the plaintiffs in Faeth and
Nicodemus, this proposition proves nothing that would help us decide
this case correctly. The factual circumstances faced by Faeth were of
course not the same as those faced by Nicodemus, but we found
unreasonable and unenforceable as a matter of law the contractual
provisions limiting to two years the time in which both of those plaintiffs
could sue their insurance companies. The relevance of Faeth and
Nicodemus to our decision in this case is derived not from identical facts,
but rather from the principle of law we consistently applied in those
cases and should apply in this case: A contractual provision requiring
an insured to sue for UIM or UM benefits within two years after an injury
will not be enforced if it is unreasonable under the circumstances faced
by the insured. Faeth, 707 N.W.2d at 334; Nicodemus, 612 N.W.2d at
787. In my view, the factual circumstances faced by Robinson during
the two years after her injury provide reasons to deny enforcement of the
contractual limitation period that are as equally compelling as those
deemed sufficient in Faeth and Nicodemus. In Robinson’s case—just as
in Faeth and Nicodemus—a two-year contractual limitation provision so
nullified the purpose of the coverage as to make it functionally worthless.
Robinson diligently pursued medical care after her injury and
followed the recommendations of her doctors in securing treatment.
23
When she began negotiating with State Farm, the other driver’s
insurance company, more than a year after the accident, she had
accumulated a little over $5000 in medical bills and had a report from
her doctor indicating she was not going to need further medical care and
would likely not incur any further medical expenses. She was informed
that she had suffered a sprain-strain injury and that her body would
slowly, but surely, heal over time with no residual permanent
restrictions. When the contractual two-year limitation period expired,
Robinson knew she was still experiencing pain in her neck, but this was
precisely what her doctor had told her to expect as part of the healing
process. She still, therefore, had no reason to understand her damages
could exceed State Farm’s $100,000 liability coverage limit insuring the
person who caused the injury. Indeed, Robinson’s settlement
negotiations with State Farm prior to June 15, 2006, suggest State Farm
valued the claim at $8000 and that Robinson and her counsel valued it
at $20,000 when negotiations ended. It was not until two years and
eight months after the accident that a physician recommended a cervical
interbody discectomy procedure—a recommendation that caused
Robinson to first realize the other driver’s liability insurance coverage
limit would be insufficient to fully compensate her for her damages.
Under these factual circumstances, “[t]he two-year limitation from the
date of the accident contained in [Allied’s] policy left [Robinson] with no
time to sue following the accrual of [her] claim.” Faeth, 707 N.W.2d at
335. Applying the reasonableness test as we did in Faeth and
Nicodemus, I would hold the provision allowing Robinson only two years
from the date of her injury to file suit under Allied’s policy is
unreasonable and unenforceable under the circumstances of this case.
In light of the goal of underinsured motorist coverage—to fully
24
compensate the insured for the injuries suffered—I cannot find
reasonable a limitations period which not only began to run, but also
expired, before Robinson knew or could have reasonably known her
damages would exceed the liability insurance coverage limit of the party
who caused the injury.
The majority concludes two years after the occurrence of an injury
is, as a matter of law, an adequate length of time for an insured to file
suit against his or her UIM carrier because the same time limit applies to
suits filed against the party who caused the injury.7 The majority
emphasizes that our decision in Douglass v. American Family Mutual
allowed enforcement of a contractual limit of two years for filing suit for
UM coverage even though the insured “was not aware that the tortfeasors
were judgment proof until the two years had passed.” Douglass v. Am.
Family Mut. Ins. Co., 508 N.W.2d 665, 667–68 (Iowa 1993) overruled on
other grounds by Hamm v. Allied Mut. Ins. Co., 612 N.W.2d 775, 784
7Further, it is unclear whether the majority’s conclusion that a contractual UIM
limitation period matching the tort statute of limitation is “per se reasonable” is
intended to overrule the well-settled tenet of contract interpretation that “[t]he
reasonableness of a contractual limitations period is determined in ‘ “light of the
provisions of the contract and the circumstances of its performance and
enforcement.” ’ ” Nicodemus, 612 N.W.2d at 787 (quoting 1A Arthur L. Corbin, Corbin
on Contracts § 218, at 311–12 (1963)). I disagree with the majority’s interpretation of
the quoted language from Corbin’s treatise. The circumstances of a UIM contract’s
performance and enforcement to which the esteemed treatise author adverted are those
faced by the insured from the time of injury to the time she knows or should know her
damages could exceed the liability insurance coverage limits of the other driver. I find
unpersuasive the majority’s contention that the language quoted from the treatise refers
to a “categorical” reasonableness assessment as of the time the adhesionary contract is
formed. A more reasonable interpretation of Corbin’s words would understand
“circumstances” is a reference to the actual circumstances in which the limitation
period is to be enforced against an insured. Those actual circumstances are, as we
have seen in Robinson’s case, unknown and unknowable at the time the UIM coverage
commences. Thus, I strongly believe this court took nothing from Corbin’s treatise out
of context and correctly expressed the essence of his understanding of the
reasonableness constraint in Nicodemus. See Nicodemus, 612 N.W.2d at 787.
25
(Iowa 2000). It should be noted, however, that our decision noted no
factual circumstances in that case making it impossible or even difficult
for Douglass to have learned within two years after the injury that the
person who caused it was uninsured. In deciding to enforce the
provision limiting the time for Douglass’ suit, we did not suggest that for
public policy reasons, or any other reasons, the limitation period for
filing suit for UIM benefits should not exceed the period of time allowed
to sue the person who caused the injury. Notably, in our more recent
decisions in Faeth and Nicodemus, we enforced a reasonableness
standard and held unenforceable contractual provisions limiting to two
years an insured’s right to file suit for UIM or UM under circumstances
in which their enforcement would have defeated the very purpose, and
nullified the essential value, of such coverage.
The majority finds a UIM policy provision matching the limitation
periods for suing the party who caused the injury and the insurance
carrier providing the UIM coverage reasonable as a matter of law. Their
attempt to justify synchronicity of the statutory limitation for filing suits
based on tort law with the limitations period for suits based on contract
law discounts the legislature’s choice to allow two years for tort suits and
ten years for suits based on written contracts. Compare Iowa Code
§ 614.1(2) (allowing two years from the date of injury to file tort suits),
with id. § 614.1(5) (allowing ten years to file suit for breach of a written
contract). Robinson’s tort claim against the other driver for personal
injuries and her contract claim against Allied for UIM benefits are based
on different conduct and discrete legal relationships. Because the claims
are distinctly different, there is no compelling reason supporting the
majority’s conclusion that suits to enforce them should, as a matter of
law, be brought within the same time periods.
26
All Robinson needed to know during the two years after the car
crash in order to file suit against the person who caused the injury is
that she was injured in some way. She had that knowledge and
complied with the statutory time limit for filing suit within two years after
she was hurt. Robinson’s UIM rights against Allied are based upon a
completely different civil law framework—the law of contract. Hamm,
612 N.W.2d at 779. The purpose of the UIM coverage is to finish the
“clean-up” of a mess caused by a financially irresponsible person. In
order to know she had a UIM claim against Allied within two years after
her car crash, Robinson must have known she had been injured severely
enough that her damages could exceed the liability coverage limit of the
person who caused the injury. Put another way, she needed to know or
at least have reason to know the size of the mess created by the crash.
The fundamental need of an insured for such knowledge as a
prerequisite for filing suit for UIM benefits was the foundation of our
pronouncement in Nicodemus that “[a] contractual limitations provision
that would require a plaintiff ‘ “to bring his action before his loss or
damage can be ascertained” ’ is per se unreasonable.” Nicodemus, 612
N.W.2d at 787 (quoting Douglass, 508 N.W.2d at 666). We have not
made such a statement with respect to the limitation period controlling
tort actions because they are fundamentally different than UIM actions.
While it arguably makes sense to require a plaintiff who knows she
has been injured to some extent in a motor vehicle crash to file suit for
damages within two years against a person who caused the injury, a
provision narrowing to two years the time for filing suit for UIM benefits
can be very problematic for policyholders. The facts of this case
illustrate it is sometimes impossible for an insured to comprehend within
two years after an injury the extent of “the mess” left by the person who
27
caused the personal injury and resulting damages. Although the
majority’s opinion in this case presents with great care the perspective of
the insurance company who seeks to narrow just as far as the law will
allow its window of exposure to pay benefits to its policyholder, I think it
ignores both the purpose of UIM coverage and the insured’s interest in
receiving the protection she reasonably expected for the premiums she
paid. We have clearly stated that “ ‘[t]he goal of underinsured motorist
coverage . . . is full compensation to the victim to the extent of the
injuries suffered.’ ” Hamm, 612 N.W.2d at 779 (quoting Veach v. Farmers
Ins. Co., 460 N.W.2d 845, 848 (Iowa 1990)) (characterizing this as the
“broad coverage view” of UIM coverage).
I reject the majority’s suggestion that Robinson’s view of the
reasonableness standard could leave her better off than she would have
been had the other driver been fully insured. Utilizing a strained
hypothetical assuming facts not present in Robinson’s case, the majority
posits a scenario in which she settled her case against the other driver
for twenty percent of the applicable liability limits and later sued Allied
for underinsurance benefits. In fact, Robinson actually recovered the full
liability insurance limits of the other driver because she prudently waited
to settle her claim until she knew how badly she was hurt. If she were
now allowed, as I think she should be, a UIM recovery against Allied she
would clearly not be better off than she would have been if the other
driver had been fully insured. She will merely get what she is entitled to
under the policy if she proves her total damages exceed $100,000.
The majority’s opinion speculates that the enforcement of the
reasonableness standard would cause an increase in the cost of
insurance. Although there is no evidence supporting this assertion in
the record of this case, I will assume its truth for the sake of discussion.
28
Should we suppose Iowans would prefer to pay a low premium for UIM
coverage that provides no protection under circumstances such as
Robinson faced in this case? Or should we believe they would prefer to
pay a fair premium for real protection against an injury caused by a
financially irresponsible person? In my view, the answer is clear. Iowans
would prefer to pay a fair premium for insurance protection that is real
rather than illusory. Notwithstanding the majority’s assertion to the
contrary, the limitation periods for filing suit to enforce a UIM claim will
not be dictated by the laws of basic economics or market forces directed
by consumer choices, because consumers are not routinely given a
choice regarding that term of a UIM contract. It will instead be dictated
by insurers motivated to shorten the length of their obligation to pay
claims.
I also believe the majority’s decision will cause greater inefficiency
in our civil justice system by forcing some policyholders to sue their
insurance companies for UIM benefits before they have reason to believe
their damages will exceed the liability insurance coverage limit of the
person who caused the injury. The court’s decision in this case will lead
some people to file suit against their insurance company for UIM benefits
within two years after they are injured and before they have a factual
basis for doing so just to be sure they will be protected if their seemingly
minor injuries later prove unexpectedly to be worse. This will result in
the filing of unnecessary lawsuits tending to increase the costs of
litigation and waste precious judicial branch resources, as well as raise
serious ethical considerations for attorneys. See Iowa R. Civ. P. 1.413
(“Counsel’s signature to every . . . pleading . . . shall be deemed a
certificate that: . . . to the best of counsel’s knowledge, information, and
belief, formed after reasonable inquiry, it is well grounded in fact and is
29
warranted by existing law.”); Iowa R. Prof’l Conduct 32:3.1 (“A lawyer
shall not bring . . . a proceeding . . . unless there is a basis in law and
fact for doing so that is not frivolous . . . .”); Iowa Lawyer’s Oath (“As a
zealous advocate and counselor for my client, I will . . . [c]ounsel clients
to maintain only those disputes supported by law and the legal
process.”). The rule adopted by the majority will in some cases place an
insured’s attorney in a no-win situation: risk violating one’s ethical
obligations as an officer of the court by bringing a frivolous lawsuit
against an insurance company for UIM benefits, or risk committing
malpractice for failing to file a suit for which a factual basis might exist
sometime in the future. The majority’s decision in this case would have
required Robinson’s attorney to file what would have appeared to a
reasonable person to be a frivolous lawsuit against Allied for
underinsured motorist benefits when Robinson’s damages amounted to a
small fraction of the other motorist’s liability insurance coverage limit.
“The law does not favor bringing litigation . . . when the claim has yet no
basis in fact or law,” Worley v. Ohio Mut. Ins. Ass’n, 602 N.E.2d 416, 419
(Ohio Ct. App. 1991), and we should not condone as reasonable an
interpretation of a contract that would require such conduct. Although
the majority correctly observes that Iowa lawyers often file tort and UIM
suits at the same time, we should not force them to do so when there is
no factual basis for a UIM claim. Accordingly, the majority’s conclusion
that Robinson should have filed her action against Allied when she sued
the tortfeasor simply misses the mark.
The majority favors the approach taken by the Illinois Court of
Appeals in Parish v. Country Mutual Insurance Co., 814 N.E.2d 166 (Ill.
App. Ct. 2004). Unburdened by the reasonableness constraint adopted
by our court years ago and applied in Faeth and Nicodemus, the Illinois
30
court ignored the distinction between the factual basis for a claim
against the party who caused the injury and the factual basis required
for suit on a UIM claim. Parish, 814 N.E.2d at 169. Although we are
justifiably cautious in the imposition of public policy-based limitations
on the freedom to contract, we mounted that “unruly horse” years ago,
and I believe we tamed it in Faeth and Nicodemus. I see no principled
reason to emulate the Illinois court’s exemption of counsel handling a
UIM claim from the requirement of a good faith factual and legal basis
dictated by our rule 1.413. See id. at 170. We should never encourage
frivolous lawsuits, especially in this time of scarce judicial resources.
I also find unconvincing the majority’s argument that Robinson
should have requested a waiver of the two-year limitation provision to
secure the UIM protection she purchased with her premium payments.
This argument carries the same baggage as the argument that Robinson
should have sued Allied within two years after the injury. Both
arguments are plausible only if Robinson knew or reasonably should
have known within two years that her damages might exceed the
negligent motorist’s liability coverage limit. As the record demonstrates
Robinson was not armed with such knowledge within two years of her
injury, the applicable reasonableness standard did not require her to
take either course of action.
For these reasons, I respectfully dissent. I would reverse the
district court’s ruling and would remand this case for trial.
Wiggins and Appel, JJ., join this dissent.