In Lederer v. Gursey Schneider, 22 Cal. App. 5th, 508, 231 Cal.Rptr.3d 508 (2nd Dist. 2018) the issue before the court was when the statute of limitations began to run against an accounting firm that handled the client’s insurance needs. It was alleged that the accounting firm failed to procure the requested UIM coverage. The court held that the statute of limitations began to run when the insurance company paid the UIM limit rather than when the insured was injured and discovered the inadequate amount of coverage.
After acknowledging that a two-year statute of limitations governed the claimant’s claims against the accounting firm, the court noted that before the cause of action would accrue which would trigger the statute of limitations running, the claimant had to suffer an actual injury. In this case, the court found that the insured’s right to underinsured motorist benefits did not accrue until the insured had reached a settlement against a tortfeasor’s insurer because the liability of the insurer providing UIM coverage depended on the amount recovered from the tortfeasor’s insurer. The accounting firm had argued that the claimant suffered an “actual injury” based upon the diminution of the claimant’s right to recover full compensation for injury as a result of the inadequate UIM coverage. However, this argument was rejected. The court found that harm was not realized until the claimant had a right to UIM benefits.