Martes, 31 Mayo 2022

Thoughts on suspending the limitation period against the insurer. Supreme Court Judgment 1382/2022, of 6 April 2022, given by the Civil Chamber in the cassation appeal no. 294/22

VolverThe Supreme Court confirms that the limitation period is suspended by the notice to the insured, regardless of whether the insurer has been notified.

We find ourselves in the following scenario:

1.- A community of owners spotted some construction defects, arising from the works of the architect xxxxx, who had a civil liability insurance.

2.- In 2010, the community of owners and some co-owners filed a lawsuit due to construction defects against the construction and real estate company. And in 2013, they filed a lawsuit against the aforementioned architect.

Joining both cases, a guilty verdict was issued against the architect on 16th May 2014.

3.- On 17th February 2016, the community and the aforementioned co-owners sued the insurance company, requesting the payment of the compensation, to which the insured architect, Mr xxxx, had been previously sentenced and which wasn’t collected while enforcing the indictment against him.

4.- The first instance court dismissed the suit, deeming the case barred by the statute of limitations, because the complaint against the insured party did not suspend the limitation period of the suit against the insurance company.

5.- The appeal lodged by the claimants was dismissed by the Provincial Court.

6.- The claimants lodged a cassation appeal.

With that in mind, we highlight that the lawsuit was filed against the insurance company, which is bound to the insured party by an insurance agreement and, therefore, has joint and several liability.

Therefore, the first ground of cassation appeal exposes the infringement of art. 1974.I CC and the case law on the liability between the insured and the insurer.

Accordingly, the appellant submits that, once a case was lodged against the insured party of the defendant, who exercised legal defence, the judicial claim interrupted the statute of limitations regarding the insurance company.

Against this background, the judgment of the Supreme Court chamber has been as follows:

A.- Traditionally, case law deemed that the complaint against a joint and several liable debtor interrupted the statute of limitations related to all, without specific requirements for each joint and several debtor, as it was understood that the liability is joint and several from its beginning, the time when the damage occurs, and the judgment is declaratory but not a constitutive of the liability.

However, from the Agreement of the First Chamber of the Supreme court, meeting in plenary, of 14 March 2003, for these purposes a distinction between “proper” and “non-proper” joint and several liability was made as follows:

"The first paragraph of article 1974 of the Civil Code only covers the suspensory effect in the event of proper joint and several liability when such a character arises from the legal norm, and cannot be extended to the non-proper joint and several liability, such as the liability arising from the non-contractual liability when there are several persons judicially convicted".

B.- According to case law issued after that Agreement of the plenary meeting, since the liability does not originate from a pre-existing bond, but from the wrongful act producing the damage, as declared by the judgment, the suspensory acts operate individually regarding the persons against whom they are exercised and not related to others, and therefore art. 1974.I CC may not be applied.

C.- However, this case law, which seems to be based on the appealed judgment, is not applicable to the case, since it cannot be applied to the relationships between insured and insurer, as declared by judgments 161/2019, of 14 March, and 171/2021, of 26 March.

The insurance company does not contribute through its behaviour to cause damage, but ensures cover thanks to the insurance agreement, to the extent that the injured, in accordance with art. 76 in the Spanish Insurance Agreement Act (LCS), may only sue the insurance company but not the insured party, who caused the damage.

D.- As set out in the judgment 129/2022, of 21 February:

“In this kind of [civil liability] insurances, if there is not civil liability for the insured, in such a way as their estate may be affected on a legal basis that will entail covering a damage (art. 1911 CC), the insurance company may not be liable, since stating it otherwise should entail that the damage goes different ways as those set up by the parties at the taking-out of the insurance.

There may not be a liability just for the sake of the insurability, so the existence of an insurance policy provides cover to damage claims outside the scope of the law and the agreement, as provided in art. 73 of LCS on the operationality for the cover subject to the process.”

Subsequently, if the liability of the insurer, which is required through direct action, presupposes the liability of the insured, the out-of-court complaints against the insured suspends the limitation period regarding the insurer, according to the provision in art. 1974.I CC.

Under that provision, pursuant the dates stated in the first legal ground, the first ground of appeal must be considered and it must be stated that the action brought by the initial lawsuit is not barred by the statute of limitations.

Conclusion. – The case against the insured, liable for a damage under civil liability, also suspends the limitation period with regards to the insurer, and therefore the latter may not invoke the limitation period in the event that the direct action is exercised.

Particularly, in this instance, the action is not only barred by the stature of limitations due to the initial lawsuit against the liable insured, but it also was suspended for the insurer.

 Jose Garzon Garcia - Departamento del SeguroJosé Garzón García 

Director del Departamento de Derecho del seguro | Madrid (España)

 

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