Can a Claims Adjuster’s Conduct/Statements Bar an Insured’s Affirmative Defenses?


Can an insured be estopped to assert a statute of limitations defense based on the conduct or statements of a liability insurance claims adjuster?  Possibly. It has been held that a liability insurer can act as the insured’s agent when adjusting claims arising against the insured.  Brenner v. Nordby, 306 N.W.2d 126 (Minn. 1981) (affidavits of the adjuster who handled the claim for defendant and plaintiff’s attorney created an issue of material fact as to whether defendant was estopped to assert statute of limitations); Frank v. Bradshaw, 920 S.W.2d 699 (Tex. Ct. App.‑Houston 1996) (defendant may be estopped from asserting the limitations defense by reason of representations made by the claims adjuster for the defendant’s insurance carrier); Clinton v. State Farm Mutual Auto. Ins. Co., 110 Ga. Ct. App. 417, 138 S.E.2d 687 (Ga. Ct. App. 1964) (same). Minnesota courts have also recognized that “[p]romises lulling a plaintiff into inactivity may estop a defendant from asserting a statute of limitations defense.” Kappes v. American Family Ins. Group, 1994 WL 1120 (Minn. Ct. App. 1994).  See also Sohns v. Pederson, 354 N.W.2d 852 (Minn. Ct. App. 1984) (“[a] plaintiff’s assertions that the defendant stated he was involved in an investigation that might lead to settlement is sufficient factual showing of a representation”).  The fact that the defendant or his/her representative does not expressly mention the statute of limitations is not important.  Albachten v. Bradley, 212 Minn. 359, 362‑363, 3 N.W.2d 783, 785 (1942) (“it is not important that there was no express mention of the statute of limitations” – the “assurance that plaintiff would not lose anything by waiting was in effect an agreement that the statute of limitations would not be asserted as a defense by defendant”).  While the fact that settlement negotiations are ongoing is not, standing alone, sufficient to estop a defendant from asserting the statute of limitations, the plaintiff in Brenner v. Nordby, 306 N.W.2d 126 (Minn.1981), contended that the defendant claim adjuster never denied liability, told plaintiff that he was investigating the claim and represented that the investigation might lead to a settlement. The court in Brenner found this evidence sufficient to create an issue for trial.  

This blog is for informational purposes only. By reading it, no attorney-client relationship is formed. The law is constantly changing and if you want legal advice, please consult an attorney licensed in your jurisdiction. © All rights reserved. 2010.

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