Curry, who owned a chiropractic practice, was insured by a disability policy issued by Trustmark. The policy provided a monthly benefit if disability prevented Curry from working as a chiropractor. The policy also required Curry to submit continuing proof of loss and, if requested, to submit to an independent medical examination.
Curry injured his back in 2003 and underwent spinal cord surgery. He applied for disability benefits in early 2004. Trustmark paid benefits for the next three years, subject to Curry's submission of information regarding his injury. The information provided by Curry was inconsistent in some respects, and incomplete in others.
In 2007, Trustmark discontinued the payment of benefits until it received information it had requested. During the next year, Trustmark and Curry exchanged correspondence, and Trustmark paid benefits for an additional three months. After Curry refused to undergo an IME, Trustmark denied additional benefits, effective in June 2008, and closed Curry's claim in September 2008.
In July 2011, Curry sued Trustmark, alleging breach of contract. Trustmark moved for summary judgment, relying on Maryland's three-year statute of limitation.
The district court held that Curry's cause of action for breach of contract had accrued anew each month when benefits were not paid. Consequently, the court concluded that the three-year statute of limitation only barred Curry's claim for benefits between September 2007 and July 2008.
The court addressed on the merits the claim for benefits after July 2008. Because Curry did not comply with Trustmark's requirements that he submit to an IME and provide continuing proof of loss, the district court granted summary judgment to Trustmark.
On appeal, Curry contended that his disability policy should be thought of as an installment contract, and that for purposes of the statute of limitation there was a new breach each month benefits were not paid. The district court agreed, but the Fourth Circuit reversed, noting that in the tort context, "a similar theory does not apply to the continuing effects of a single earlier act," citing MacBride v. Pishvaian, 937 A.2d 233, 240 (Md. 2007).
The court noted that both the Tenth and Eleventh Circuits have rejected the idea that disability policies are installment contracts giving rise to continuing breaches for each unpaid monthly benefit, citing Lang v. Aetna Life Ins. Co., 196 F.3d 1102, 1105 (10th Cir. 1999), and Dinerstein v. Paul Revere Life Ins. Co., 173 F.3d 826, 828 (11th Cir. 1999).
The Fourth Circuit held that the three-year statute of limitation began to run in June 2008, when Trustmark stopped paying benefits.
Curry argued in the alternative that the statute did not begin to run until Trustmark closed his claim in September 2008. Curry relied on Vigilant Ins. Co. v. Luppino, 723 A.2d 14, 15 (Md. 1999), involving an insurer's denial of its duty to defend. The court distinguished that case, because the duty to defend is a "continuing one," such that the statute only began to run from the time the duty could be completed ‒ in that case, at the end of the underlying lawsuit.
The court also rejected the argument that the discovery rule should have tolled the statute of limitation. Curry argued that even if his cause of action arose when Trustmark stopped paying benefits, he was not aware of the breach until Trustmark closed his claim in September 2008. However, by Curry's own admission, he believed that Trustmark had breached the contract when it stopped paying benefits, and Curry did not dispute his receipt of Trustmark's June 2008 letter, denying additional benefits until Curry produced proof of continuing loss. The court held that those facts established that Curry both knew and should have known of any alleged wrong before July 2008.