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Esad Osmic v. Nationwide Agribusiness Insurance Company

May 15, 2013

ESAD OSMIC, PLAINTIFF-APPELLEE,
v.
NATIONWIDE AGRIBUSINESS INSURANCE COMPANY, DEFENDANT-APPELLANT, AND WESTFIELD NATIONAL INSURANCE COMPANY, DEFENDANT.



Appeal from the Iowa District Court for Black Hawk County, David F. Staudt, Judge.

The opinion of the court was delivered by: Doyle, J.

Nationwide Agribusiness Insurance Company appeals from the denial of its motion for summary judgment. AFFIRMED.

Considered by Vogel, P.J., and Potterfield and Doyle, JJ.

Esad Osmic was injured in a motor vehicle collision while riding as a passenger in his brother's SUV. Two years and thirty-one days later, Esad sued Nationwide Agribusiness Insurance Company (Nationwide) seeking recovery for damages under the underinsured motorist (UIM) provisions of his brother's personal auto policy. Nationwide filed a motion for summary judgment asserting Esad's petition was untimely because it was not filed within the policy provision's two-year deadline. The district court denied the motion, holding that as a non-party to the contract, Esad was not bound by the contract's shortened limitations period. Further, the court found Nationwide played "hide the ball" with Esad in failing to timely reveal to him the policy's two-year-filing deadline.

Nationwide's application for interlocutory appeal was granted by our supreme court, and the appeal was then transferred to this court. Upon our review of this question of first impression, we affirm.

I. Scope and Standards of Review.

We review the district court's summary judgment ruling for the correction of errors at law. Mueller v. Wellmark, Inc., 818 N.W .2d 244, 253 (Iowa 2012). Summary judgment is appropriate when the pleadings, depositions, answers to interrogatories, admissions on file, and affidavits show there is no genuine issue of material fact, and the moving party is entitled to a judgment as a matter of law. Iowa R. Civ. P. 1.981(3); Mueller, 818 N.W.2d at 253. As this case arises from a denied motion for summary judgment, we view the record in the light most favorable to Esad as the nonmoving party. See Mueller, 818 N.W.2d at 253; Kern v. Palmer Coll. of Chiropractic, 757 N.W.2d 651, 657 (Iowa 2008).

II. Background Facts and Proceedings.

On May 23, 2009, Esad Osmic and his two children were riding in an SUV owned and driven by Esad's brother, Selim, when another vehicle, driven by Rochelle Heasley, collided with the Osmic SUV. The collision caused the Osmic SUV to lose control, leave the roadway, and roll several times on an embankment. As a result, Selim and his family, as well as Esad and his children (hereinafter collectively as "Esad" unless otherwise specified), were injured.

Heasley's vehicle was insured through Progressive Insurance Company. After settling the claims of Selim and his family, the balance of the Progressive policy limits were offered to Esad, however, this was insufficient to fully satisfy Esad's claims.

Selim's SUV was insured under a Nationwide personal auto policy, which included UIM coverage. Esad's counsel contacted a representative of Nationwide by telephone on March 25, 2011, regarding the offer from Progressive to settle Esad's claims. Nationwide requested Esad provide copies of Esad's demand letter to Progressive, medical bills, and medical records, including records from the three preceding years.

On March 28, Esad's counsel followed up by letter to Nationwide. Esad's counsel requested a copy of the Nationwide policy declarations page so he could determine the UIM policy limits. Additionally, Esad's counsel asked if he could proceed with settling with Progressive for the amount offered. The letter concluded: "I look forward to hearing from you to conclude the claim with the tortfeasor as our statute is running." The demand letter to Progressive, Esad's medical bills, and some of Esad's medical records were enclosed.

On April 1, Esad's counsel sent a second letter to Nationwide and enclosed Esad's prior three years medical records. Esad's counsel specifically asked for the policy limits and repeated his request for a copy of the policy's declarations page. He also again asked if he could proceed to settle with Progressive for the balance of Heasley's liability limits.

Nationwide responded by a letter dated April 12. It agreed to waive its subrogation rights for the UIM coverage for Esad on Selim's personal auto policy, and it granted consent for settlement with Progressive for the liability claims against Heasley. Additionally, although it had not sought consent from Selim, Nationwide stated in its letter it did not have Selim's consent to provide his policy's declarations page, and it did not disclose the UIM policy limits. Further, Nationwide opined in the letter that it did not see "an underinsured exposure" for either of Esad's children, stating "it appears the settlement offers presented by Progressive . . . will adequately indemnify them." Nationwide's letter concluded: "I am aware of the fast approaching statute expiration date and will be in contact with you regarding the underinsured claim of Esad once I have had the opportunity to review the information you have provided." (Emphasis added.)

On May 4 and 10, additional medical records and bills were provided to Nationwide by Esad's counsel. Then, on May 27, Nationwide sent a letter to Esad's counsel notifying him that the "[UIM] coverage available under [Selim's] policy ha[d] now expired per the contract language which states [UIM] coverage will be barred unless suit filing is commenced within two years after the date of the accident." A copy of the UIM Coverage Endorsement was enclosed "for your review." Further correspondence ensued.

On June 23, 2011, Esad filed suit against Nationwide and his own insurance carrier, seeking UIM benefits. Nationwide answered raising a number of affirmative defenses, including that Esad's claim was "barred by the statute of limitations provided in the applicable policy." Later, Nationwide filed a motion for summary judgment asserting Esad's UIM claim was barred by the two-year contractual limitations period of the policy. Because Esad filed his petition two years and thirty-one days after the accident, Nationwide requested the case be dismissed. Esad resisted, maintaining the contractual limitation was unreasonable and unenforceable as to him because he did not know the extent of his injuries, he was not a party to the contract and lacked knowledge of the policy's time limitation, and Nationwide acted unfairly in not telling him of the policy's time limitation, despite knowing he was going to file a claim, requesting numerous documents from him, and failing to provide him with a copy of the policy.

A hearing on the motion was subsequently held before the district court. Thereafter, the court entered its order denying Nationwide's motion for summary judgment, finding:

Esad Osmic is not a party to the insurance contract between Nationwide and Selim Osmic. The fact that Esad is not a party to the contract with Nationwide prevents Nationwide from ...


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