J-A19039-15



                                  2015 PA Super 264

MATTHEW RANCOSKY, ADMINISTRATOR                    IN THE SUPERIOR COURT OF
DBN OF THE ESTATE OF LEANN                               PENNSYLVANIA
RANCOSKY, AND MATTHEW RANCOSKY,
EXECUTOR OF THE ESTATE OF MARTIN
L. RANCOSKY,

                            Appellants

                       v.

WASHINGTON NATIONAL INSURANCE
COMPANY, AS SUCCESSOR BY
MERGER TO CONSECO HEALTH
INSURANCE COMPANY, FORMERLY
KNOWN AS CAPITAL AMERICAN LIFE
INSURANCE COMPANY,

                            Appellee                  No. 1282 WDA 2014


               Appeal from the Judgment Entered August 1, 2014
              In the Court of Common Pleas of Washington County
                       Civil Division at No(s): 2008-11797


BEFORE: BENDER, P.J.E., JENKINS, J., and MUSMANNO, J.

CONCURRING AND DISSENTING OPINION BY JENKINS, J.:

FILED: December 16, 2015

       I concur with the majority’s decision to affirm the entry of summary

judgment in favor of Conseco1 on Martin’s claims. I respectfully dissent from

the majority’s decision to vacate the judgment on LeAnn’s claims and

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1
  I use the same shorthand references to the parties as in the majority
opinion.


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remand for a new trial on LeAnn’s claim for bad faith under 42 Pa.C.S. §

8371.      In my view, LeAnn’s bad faith claim is time-barred under

Pennsylvania’s two-year statute of limitations for bad faith, 42 Pa.C.S. §

5524.

        The majority contends in footnote 30 of its opinion that Conseco

waived the statute of limitations issue by failing to raise it in post-verdict

motions. I am constrained to disagree.

        At the close of evidence during trial, Conseco moved for a directed

verdict on LeAnn’s bad faith claim based on the statute of limitations. N.T.,

6/27/14, at 168-72.     The trial court took the motion for directed verdict

under advisement. Id. at 172. Subsequent to trial, the trial court entered a

decision in favor of Conseco on the merits, finding that LeAnn failed to

present clear and convincing evidence of bad faith. Verdict, 7/3/14, at 1-2.

The trial court did not address the statute of limitations issue.

        As the verdict winner, Conseco could not file post-verdict motions

objecting to the trial court’s failure to decide the statute of limitations issue.

DeFazio v. Labe, 507 A.2d 410, 414 (Pa.Super.1986) (“[because]

judgment n.o.v. is the directing of a verdict in favor of the losing party,

despite a verdict to the contrary … we must therefore agree with the lower

court that appellees, as verdict winners, lack standing to move for a




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judgment n.o.v.”) (emphasis in original).2           Because Conseco lacked

standing, as the verdict winner, to file post-verdict motions in the trial court

seeking judgment n.o.v. on the statute of limitations, Conseco did not waive

its statute of limitations argument in this Court.

       In addition, the evidence demonstrates, as a matter of law, that

LeAnn’s claim is time-barred. This Court has the authority to affirm the trial

court on the basis of the statute of limitations, even though the trial court

decided the case on another ground. “[W]e are not bound by the rationale

of the trial court and may affirm on any basis.” Richmond v. McHale, 35

A.3d 779, 786 n. 2 (Pa.Super.2012).

       Under Pennsylvania law, a bad faith action under 42 Pa.C.S. § 8371 is

subject to a two-year statute of limitations. Ash v. Continental Ins. Co.,

932 A.2d 877, 885 (Pa.2007). In general, a claim accrues when the plaintiff

is harmed.       Adamski v. Allstate Ins. Co., 738 A.2d 1033, 1042-43

(Pa.Super.1999). In other words, “a statute of limitations begins to run as

soon as the right to institute suit arises. This is true regardless of whether

the full extent of harm is known when the action arises.” Id. “Whether a

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2
  The Supreme Court granted allocatur in DeFazio but split 3-3 concerning
whether verdict winners lack standing to move for judgment n.o.v. DeFazio
v. Labe, 543 A.2d 540, 541-45 (Pa.1988). Thus, the Superior Court’s
decision in DeFazio was affirmed on this issue, Id., and it remains good law
today. See Marks v. Nationwide Ins. Co., 762 A.2d 1098, 1101
(Pa.Super.2000) (decision of Superior Court remains precedential until it has
been overturned by Supreme Court).



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complaint is timely filed within the limitations period is a matter of law for

the court to determine.”   Crouse v. Cyclops Indus., 745 A.2d 606, 611

(Pa.2000).    “Once a cause of action has accrued and the prescribed

statutory period has run, an injured party is barred from bringing his cause

of action.” Fine v. Checcio, 870 A.2d 850, 857 (Pa.2005).

      Pennsylvania courts have held that a bad faith claim under 42 Pa.C.S.

§ 8371 is deemed to have accrued at the point the claim for insurance

benefits is first denied. See, e.g., Ash v. Continental Ins. Co., 861 A.2d

979, 984 (Pa.Super.2004) (two-year limitation period began running at

initial denial of coverage for damage to insured’s property under first-party

fire policy), aff’d, 932 A.2d 877 (Pa.2007); Adamski, 738 A.2d at 1040

(limitation period under section 8371 began to run upon first occurrence of

refusal to pay).   Thus, the statute of limitations begins running when the

insurer sends a letter denying a claim, even where the insurer later agrees

to re-evaluate a decision to deny benefits at the request of the insured.

See, e.g., Jones v. Harleysville Mut. Ins. Co., 900 A.2d 855, 858-59 (Pa.

Super.2006) (statute of limitations began running when insurer first issued

letter denying claim for property damage under fire policy; rejecting

argument that statute of limitations did not begin running until after insurer

conducted additional investigation and sent another letter reaffirming

previous decision to deny coverage); see also Cozzone v. AX4 Equitable

Life Ins. Soc., 858 F.Supp.2d 452, 459 (M.D.Pa.2012) (“an insurance

company’s willingness to reconsider its denial does not toll the statute of

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limitations, as the limitations period runs from the time when Plaintiff’s claim

was first denied”).3      The bad faith statute also begins running when the

insurer sends a letter terminating the policy for failure to make timely

premium payments. See Bariski v. Reassure America Life Ins. Co., 834

F.Supp.2d 233, 237 (M.D. Pa. 2011).              Nor can the plaintiff extend the

limitations period by arguing that the insurer’s bad faith conduct was

continuing, because the plaintiff is not entitled to “separate initial and

continuing refusals to provide coverage into distinct acts of bad faith.”

Adamski, 738 A.2d at 1042; see also CRS Auto Parts, Inc. v. Nat’l

Grange Mut. Ins. Co., 645 F.Supp.2d 354, 365 (E.D.Pa. 2009) (“where an

insurer clearly and unequivocally puts an insured on notice that he or she

will not be covered under a particular policy for a particular occurrence, the

statute of limitations begins to run and the insured cannot avoid the

limitations period by asserting that a continuing refusal to cover was a

separate act of bad faith”).

       In this case, on March 9, 2005, Conseco sent a letter to LeAnn

advising that her policy lapsed. Exhibit D-17. Despite this lapse, on March

27, 2006, LeAnn sent Conseco a claim form seeking payment of additional

benefits. Exhibit D-34. In a letter dated April 12, 2006, Conseco denied this
____________________________________________


3
   Although decisions of federal district courts are not binding on
Pennsylvania courts, we may still consider them persuasive authority. See
Dietz v. Chase Home Finance, LLC, 41 A.3d 882, 886 n.3
(Pa.Super.2012).



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claim and advised LeAnn that “Your CANCER insurance coverage ended on

5-24-03. Therefore, we cannot pay any benefits to you for the claims you

submitted.” Exhibit D-39. The April 12, 2006 letter was the only denial of a

claim for payment of benefits that Conseco sent to LeAnn.

     On September 8, 2006, Conseco received a WOP Claim Form from

LeAnn which Dr. Krivak signed and dated on August 28, 2006 and which

identified the starting disability date due to cancer as “3-27-2006-New

Chemo Regimen.” Exhibit D-43-2. In a letter dated September 21, 2006,

Conseco denied this request for WOP benefits and again advised LeAnn that

“Your CANCER insurance coverage ended on 5-24-03. Therefore, we cannot

pay any benefits to you for the claims you submitted.” Exhibit D-45.

     To the extent LeAnn could commence an action against Conseco for

bad faith for refusal to pay her claim for monetary benefits, this right

accrued on April 12, 2006, when Conseco denied LeAnn’s claim for payment.

To the extent Leann could commence an action against Conseco for bad faith

in lapsing her Policy, that right accrued either on March 9, 2005, when

Conseco first advised LeAnn that her policy had lapsed, or on September 21,

2006, when Conseco denied LeAnn’s request for WOP and advised that her

coverage ended on May 24, 2003. There were no benefit denials under the

Policy either for a claim payment or WOP after September 21, 2006.

Therefore, at the latest, the two-year bad faith statute of limitations began

running on September 21, 2006.      LeAnn instituted this action via writ of




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summons on December 22, 2008, more than two years after September 21,

2006. Docket Entries, at 5. Therefore, her bad faith claim is time-barred.

     I   disagree   with   LeAnn’s   claim    that   the   statute   of   limitations

commenced when Conseco sent a letter to LeAnn dated January 5, 2007 in

response to her November 30, 2006 letter. Exhibit D-50. This letter did not

make any denials of claims or benefits but merely summarized the history

with respect to LeAnn’s claims, explained why the policy previously lapsed,

explained that several claims were paid in error but that Conseco did not

plan to seek reimbursement for those funds, and enclosed a duplicate copy

of the Policy for LeAnn’s review.       Id.    As the authorities cited above

demonstrate, Conseco’s letter explaining its prior denial of benefits and WOP

did not toll the statute. See Jones, Cozzone, supra.

     For these reasons, I respectfully dissent from the majority’s decision

on LeAnn’s bad faith claim on the ground that the trial court properly

entered a verdict in favor of Conseco on LeAnn’s bad faith claim.




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