RRD Partner Obtains Dismissal of Professional Liability Claims: Reaffirms Pennsylvania's Discovery Rule as it Pertains to the Statute of Limitations

In a decision focusing on the statute of limitations and the “discovery rule”, Bradley J. Vance, Partner in Reger Rizzo & Darnall’s Philadelphia Office, recently obtained dismissal of all professional liability claims against his insurance broker client in Delaware County, in James D. Flick, et al. v. Anthony G. Naab, et al. 

The action involved multiple claims against an insurance broker based on alleged negligence in procuring insurance for the plaintiff. Plaintiff was the purchaser of a property who was faced with liability arising out of pollution exposure to a neighboring property purportedly emanating from a dry cleaning operation on the plaintiffs' property. The Plaintiffs alleged that they were compelled to settle a large environmental claim in an underlying action initiated by the owner of the neighboring property. After settling those claims, plaintiff instituted this lawsuit, claiming the settlement funds it was forced to pay in the prior litigation were incurred as the result of the negligence and breaches of common law and contractual duties owed to Plaintiff by its insurance broker, insurer, real estate agent, the prior land owners and an environmental expert.

Mr. Vance asserted the affirmative defense that all claims were barred by exhaustion of the applicable statute of limitations. Plaintiffs argued various legal positions in opposition to the statute of limitations defense, including equitable tolling of the statute of limitations, and estoppel from asserting the defense based on purported misrepresentations of the broker. After nearly two years of litigation addressing both the issues surrounding the statute of limitations defense and the professional liability claims themselves, a Motion for Summary Judgment was filed. The Motion sought dismissal of all claims based upon the recorded facts established by Mr. Vance, which provided beyond any factual dispute that the Plaintiffs had actual knowledge of the broker’s conduct and of the alleged exposure for the environmental claim more than two years prior to Plaintiffs commencing the action against the broker. Thus, the claims against the broker were not timely. The Court granted the Motion for Summary Judgment and dismissed all claims against Mr. Vance's client.

This case reaffirms the long-standing precedent in Pennsylvania that the statute of limitations on claims begins to run once a party has been harmed and suffers damage as the result. While the doctrine of equitable tolling or the "discovery rule" can serve to extend the limitations period, the burden is on the plaintiff to establish that he or she could not have known of the purported acts of negligence or breach of duty, and that no amount of vigilance on the plaintiff’s part would have allowed him to detect the injury.