California high court extends insurer liability.The California Supreme Court has ruled that insurers can be sued by policyholders who find damage that the insurers' adjusters failed to discover, even if the deadline to file a legal action has expired. (Vu v. Prudential Prop. & Cas. Ins. Co., 33 P.3d 487 (Cal. 2001).) Prudential policyholder Policyholder An individual who owns an insurance policy. Peter Vu's house was damaged in California's 1994 Northridge earthquake The Northridge earthquake occurred on January 17, 1994 at 4:31 AM Pacific Standard Time in the city of Los Angeles, California. The earthquake had a "strong" moment magnitude of 6. . A Prudential adjuster examined the dwelling after the earthquake and estimated the damage at about $4,000, well below Vu's $30,000 deductible That which may be taken away or subtracted. In taxation, an item that may be subtracted from gross income or adjusted gross income in determining taxable income (e.g., interest expenses, charitable contributions, certain taxes). on his $300,000 policy. However, in 1997, an architect Vu hired concluded there was actually more than $300,000 worth of damage to the house. Vu sued the insurer in federal district court. The court threw out his lawsuit, saying the state insurance code requires that any legal action be filed within one year of the event that caused the damage. The Ninth Circuit Court of Appeals asked the California Supreme Court to clarify this issue of state law before the case progressed. Without ruling on the substance of Vu's claim, the state high court concluded that his case can go to trial. The insurer is barred from raising the one-year statute of limitations A type of federal or state law that restricts the time within which legal proceedings may be brought. Statutes of limitations, which date back to early Roman Law, are a fundamental part of European and U.S. law. as a defense if Vu can prove he "reasonably relied on Prudential's representation in not bringing a lawsuit within the statutory period," the court held. The principle of estoppel A legal principle that bars a party from denying or alleging a certain fact owing to that party's previous conduct, allegation, or denial. The rationale behind estoppel is to prevent injustice owing to inconsistency or Fraud. limits the insurer's right to invoke To activate a program, routine, function or process. the statute of limitations, the court said, because it was the finding of the insurer's own employee that caused Vu to stop inspecting his house for further damage. "Where the delay in commencing action is induced by the conduct of the defendant, that delay cannot be used by him as a defense," the court wrote. Prudential argued that Vu failed to exercise due diligence Research; analysis; your homework. This term has caught on in all industries, because it sounds so "wired." Who would want to do analysis or research when they can do due diligence. See wired. to discover the full extent of the damage, even considering the adjuster's finding. The court said that this is a factual issue that should be resolved at trial. The California legislature has passed a new law that gives plaintiffs one more year to file lawsuits stemming from the Northridge quake Quake - A string-oriented language designed to support the construction of Modula-3 programs from modules, interfaces and libraries. Written by Stephen Harrison of DEC SRC, 1993. . Vu's case was filed before that law took effect. Attorney Glenn Kantor, who represents Vu, said the ruling could affect thousands of other cases. Insurers "won't be able to hide behind a statute of limitations when they fail to fairly investigate all claims," he said. |
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