Policy Limitation Period Defeats Insured’s Bid to Save Lawsuit

By Don R. Sampen, published, Chicago Daily Law Bulletin, July 22, 2025

The 2nd District Appellate Court recently held that an insured’s lawsuit against an insurer was barred by the policy’s one-year suit limitations clause. Equitable tolling was found not to apply, even though the insured filed an earlier suit that was dismissed for improper joinder.

The case is Anne Arora v. State Farm Fire & Casualty Co., 2025 IL App (2d) 240522 (June 23). The insured, Arora, was represented by Loftus & Eisenberg Ltd. of Chicago. Dinsmore & Shohl LLP of Chicago represented the insurer, State Farm.

A storm damaged Arora’s property in Long Grove in 2021. She and four other property owners filed a joint complaint in Cook County against State Farm a year later for storm damage. Each had a separate claim for different property, and only one plaintiff was located in Cook County.

State Farm filed a motion to dismiss due to misjoined parties, arguing that joinder was improper because the plaintiffs and their claims had no connection with each other. In response the Cook County Circuit Court dismissed with prejudice Arora’s claim and the claims of three other plaintiffs, leaving the Cook County plaintiff as the sole remaining plaintiff.

The dismissed plaintiffs at that time did not seek reconsideration of the ruling. Nor did they request that their matters be transferred to another county, or request a Supreme Court Rule 304(a) finding allowing for an immediate appeal. Instead, three plaintiffs filed new lawsuits in McHenry County, and Arora filed the instant lawsuit in Lake County in April 2023.

Arora’s new lawsuit alleged that she had earlier notified State Farm of the storm damage from 2021, that State Farm acknowledged damage of about $28,000, but that it denied coverage for a full roof replacement. She estimated her total repair costs at about $857,000.

State Farm answered the complaint and later filed a motion for judgment on the pleadings based on the suit limitation clause in its policy issued to Arora. That clause provided that “any action [against State Farm] by any party must be started within one year after the date of loss or damage” (with exceptions not relevant here).

While State Farm’s motion was pending, Arora filed a motion to reconsider the dismissal of her claim in the Cook County Circuit Court, since that case was still pending. The Cook County court, however, subsequently dismissed the case once the remaining plaintiff settled, and it denied Arora’s reconsideration motion.

Ultimately, the Lake County Circuit Court granted State Farm’s motion for judgment on the pleadings based on the suit limitations clause and Arora took this appeal.

No Waiver

In an opinion by Justice Ann B. Jorgensen, the 2nd District affirmed. She observed initially that contractual time limitations are valid in Illinois and compliance is a condition precedent to recover under an insurance policy.

She then turned to Arora’s argument that the State Farm suit limitations provision was ambiguous and found the argument meritless. She also rejected Arora’s position that her lawsuit in Cook County effectively “started” the lawsuit in Lake County for purposes of the suit limitations provision. Jorgensen wrote that Arora’s new complaint in Lake County was plainly an entirely new action within the meaning of the suit limitations clause.

Arora further argued that the McHenry County Circuit Court had denied a similar motion for judgment on the pleadings in the three cases filed in that court. Although the bases for those rulings were not made of record here, Arora cited Romano v. Morrisroe, 326 Ill. App. 3d 26 (2d Dist. 2001), for the proposition that limitations provisions should be strictly construed and could be readily waived.

As part of the same argument she contended that by seeking dismissal, rather than a transfer to a different county based on improper venue, State Farm was the cause of Arora’s own purportedly late filing, thus giving rise to a waiver.

Jorgensen declined to go along. She stated that State Farm moved to dismiss in Cook County based on improper joinder, that the motion was proper, that it had no obligation to challenge venue or to seek transfer to another county, and that State Farm had not waived the suit limitations provision.

Equitable Tolling

In a related argument, Arora took the position that State Farm should have sought a severance in Cook County rather than a dismissal, which would have been a more equitable approach. This argument led Jorgensen to consider whether the court, sua sponte, should apply the principles of equitable tolling and excuse Arora’s failure to comply with the suit limitations provision.

Equitable tolling, however, in Jorgensen’s view, would apply only where a plaintiff’s failure to comply with a limitations period was due to circumstances beyond the plaintiff’s control, and it also required that the plaintiff exercise due diligence.

Those circumstances were not present here. At the time of dismissal in Cook County, for example, Jorgensen found that Arora could have moved for a voluntary dismissal under 735 ILCS 5/13-217, which automatically would have extended her filing deadline. Or she could have asked the court to sever her case and transfer it to Lake County. Or she could have moved for reconsideration at the time of dismissal, or could have requested a Rule 304(a) finding and sought to appeal.

Instead, Arora undertook none of those steps, and her failure to comply with the suit limitations provision could not be said to have been beyond her control.

Accordingly, the court affirmed the judgment in favor of State Farm.

Key Points

• Insurance policies may validly set forth time limitations for suits brought against an insurer, compliance with which is a condition precedent to recovery.

• Equitable tolling of a limitations period, which may relieve a plaintiff from compliance with the time limitation, applies only when the plaintiff has exercised due diligence and is prevented from complying by circumstances beyond the plaintiff’s control.