Case name: Surge Resources, Inc. v. Liberty Mutual
Insurance Co., et al., No. 216-2010-CV-795 (N.H. Super. Ct. 05/23/12).
The New Hampshire Superior Court held that an insurer's claims that a company underpaid workers' compensation premiums were barred by the statute of limitations.
What it means: In New Hampshire, a three-year statute of limitations exists for claims involving overpayments and underpayments of workers' compensation insurance premiums.
An insurer provided workers' compensation insurance to an employee leasing company. At the beginning of a policy period, the company provided an estimated remuneration for each job and paid an estimated premium. At the end of each policy period, the premium would be adjusted based upon a comprehensive audit of the company's books and records. A dispute arose over the "experience modification rating." The National Council on Compensation Insurance ruled in the insurer's favor, but neither of the parties recalled receiving the decision. The company continued to make estimated payments inconsistent with NCCI's decision. Later, the company sued the insurer, alleging that it overpaid premiums. The insurer filed counterclaims alleging that the company underpaid premiums. The New Hampshire Superior Court held that the insurer's claims were barred by the statute of limitations.
The court pointed out that if the parties had known that NCCI ruled in the insurer's favor the company would not have continued to take a position inconsistent with the ruling. The court concluded that NCCI's decision did not come to the insurer's attention until the suit was filed, seven years after the decision was made. The court also found that the insurer's failure to follow up with NCCI for seven years could not constitute "reasonable diligence."
The insurer conceded that it did not bring its counterclaims within three years of the company's alleged underpayment. The fact that NCCI failed to notify the insurer of its decision did not toll the statute of limitations because the insurer was not reasonably diligent in ascertaining the information.
Read more at the WorkersComp Forum homepage.
July 26, 2012
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