Sunday, March 11, 2012

Summit Guaranty and Insurance Co., Inc. vs. De Guzman

Facts: This petition for certiorari stems from three consolidated complaints filed against petitioner, the facts of the three cases are as follows: 

Jose Ledesma was the owner of a tractor which was bumped by a minibus insured with petitioner for Third Party Liability. Ledesma immediately made a notice of claim. Petitioner company advised private respondent to have car repaired by G.A. Machineries, which was later estimated at an amount of Php21,000 and made assurance of payment. Upon repair, respondent made several demands on petitioner company because of repair shops warning that failure to pay would result in the auctioning of the tractor to pay expenses. Petitioner company continued giving assurance and promises to pay. Eventually, private respondent filed a formal complaint with the Insurance Commission, which petitioner company moved to dismiss on ground of prescription. 

Geronima Pulmano was the owner of a jeep insured with petitioner company in the amount of Php20,000. The jeep got into a vehicular accident which resulted in the death of one of the victims and private respondent immediately filed a notice of accident and claim. Petitioner company took no steps to process the claim so private respondents brought their claim to the Insurance Commission, but petitioner company still failed to settle. A complaint was eventually filed with the Court of First Instance of Tarlac which petitioner company moved to dismiss on the ground of prescription. 

Amelia Generao owned a passenger jeepney insured with petitioner under a Vehicle Comprehensive Policy. The jeepney struck the van of a certain Mr. Hahn and two days later Generao notified petitioner company and demanded payment on both vehicles. Generao and petitioner company even had a dialogue at the office of insurance company to settle the claim. Nonetheless, time passed without petitioner company taking any final action. Mr. Hahn filed a complaint for damages against Generao who, in response, filed a third party complaint against petitioner company which in turn filed a motion to dismiss on the ground of prescription. 

Issue: Did the causes of action of private respondents already prescribe? 

Held: NO. Petitioner company argues that under Section 384 of the Insurance Code, even if the notice of claim was timely filed with the insurance company within the six month period, if the action or suit that follows is filed beyond the one year period it should necessarily be dismissed on the ground of prescription. 

The Supreme Court finds absolutely nothing in the law which mandates that the two periods must always concur. On the contrary, it is very clear that the one year period is only required “in proper cases”. It is very obvious that petitioner company is trying to use Section 384 of as a cloak to hide itself from its liabilities. In violation of its duties to adopt and implement reasonable standards for the prompt investigation of claims and to effectuate prompt, fair and equitable settlement of claims, and with manifest bad faith, petitioner company devised means and ways of stalling the settlement proceedings. 

The one year period should be counted from the date of rejection by the insurer as this is the time the cause of action accrues. Since in these cases there has yet been no accrual of cause of action, prescription has not yet set in. 

NOTE: Section 384 has been amended as follows, “…Action or suit for recovery of damage due to loss or injury must be brought in proper cases, with the Commissioner or the Courts within one year from denial of the claim, otherwise the claimants right of action shall prescribe.”

Digg Google Bookmarks reddit Mixx StumbleUpon Technorati Yahoo! Buzz DesignFloat Delicious BlinkList Furl

0 comments: on "Summit Guaranty and Insurance Co., Inc. vs. De Guzman"

Post a Comment