This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (1998).


Patricia Frances Oanes, et al.,


Allstate Insurance Company,

Filed October 19, 1999
Toussaint, Chief Judge

Hennepin County District Court
File No. 9818303

Michael E. Marks, Milavetz, Gallop & Milavetz, P.A., 6500 France Avenue South, Edina, MN 55435 (for appellants)

Jeanne H. Unger, John Rolland Neve, Rider, Bennett, Egan & Arundel, LLP, 2000 Metropolitan Centre, 333 South Seventh Street, Minneapolis, MN 55402 (for respondent)

Considered and decided by Toussaint, Presiding Judge, Lansing, Judge, and Randall, Judge.

U N P U B L I S H E D   O P I N I O N

TOUSSAINT, Chief Judge

In a claim for underinsured motorist coverage, appellants Patricia Frances Oanes and Gerald Oanes appeal from summary judgment for respondent Allstate Insurance Company. Because the district court did not err in concluding that appellants’ underinsured motorist claim is barred by the six-year statute of limitations, we affirm.


On appeal from summary judgment, we ask two questions: (1) whether there are any genuine issues of material fact and (2) whether the district court erred in applying the law. Weeks v. American Family Mut. Ins. Co., 580 N.W.2d 24, 26 (Minn. 1998). The reviewing court "must view the evidence in the light most favorable to the party against whom judgment was granted." Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn. 1993) (citation omitted). If the reviewing court finds that material issues of fact need to be determined, the case is to be remanded to the district court without a decision on the legal issues. Caledonia Community Hosp. v. Liebenberg, 308 Minn. 255, 258-59, 248 N.W.2d 279, 281 (1976).

The parties do not dispute that this action is governed by the six-year statute of limitations for contracts pursuant to Minn. Stat. § 541.05, subd. 1(1) (1998). See O'Neill v. Illinois Farmers Ins. Co., 381 N.W.2d 439, 440 (Minn. 1986) (applying Minn. Stat. § 541.05, subd. 1(1) (1984), to uninsured motorist claims). The parties dispute the date that the statute of limitations period began to run.

In an action to imply uninsured motorist benefits in an insurance policy and to recover those benefits, "the statute of limitations begins to run from the date of the auto accident causing the injury." Id. at 441; Nelson v. State Farm Ins. Co., 567 N.W.2d 770, 771 (Minn. App. 1997). This court acknowledges a narrow exception to the general rule in O’Neill by recognizing a party’s right to contract specifically for an accrual date other than the date on which the accident occurred. See Sargent v. State Farm Mut. Auto. Ins. Co., 486 N.W.2d 14, 16 (Minn. App. 1992), review denied (Minn. Aug. 4, 1992).

In Sargent, this court determined that the policy in that case contained a contractual accrual date. The policy stated:

There is no coverage until the limits of liability of all bodily injury liability bonds and policies that apply have been used up by payments of judgments or settlements.

Id. The policy also stated that the insurer would only pay bodily injury damages where the insured had not received compensation for those damages. Id. This court has since limited Sargent's application and held that "[a]bsent a 'no coverage until clause' like that in Sargent, there is no 'contractual accrual date' for this court to adopt." Nelson, 567 N.W.2d at 772; see also Cattnach v. State Farm Ins. Co., 577 N.W.2d 251, 253 (Minn. App. 1998) (stating Sargent's application limited to policy language that is similar to policy language in Sargent), review denied (Minn. June 17, 1998).

Appellants argue that the language contained in their policy with Allstate mirrors the language in Sargent and therefore, the statute of limitations began to run when Allstate denied coverage. The Allstate policy provides in relevant part:

We are not obligated to make any payment for bodily injury, sickness, disease or death under this coverage which arises out of the use of an underinsured motor vehicle until after the limits of liability for all liability protection in effect and applicable at the time of the accident have been exhausted by payment of the judgments or settlements.

Based on this court's decisions in Nelson and Cattnach, Sargent's application is limited to cases where policy language is similar to that used in Sargent. Here, the policy does not include the "no coverage until" language used in Sargent. Instead, Allstate uses "no payment * * * until" language. We conclude that this language is not similar to the policy language in Sargent.

In Nelson, this court observed:

The time within which an action must be commenced begins to run when the cause of action accrues. It does not necessarily follow that the right to sue on the cause of action arises immediately when the cause of action accrues. [W]here * * * a condition precedent is not a part of the right or cause of action, but merely a part of or one step in the remedy, it does not delay the running of the statute. * * * [T]he test is whether the performance of the condition is a part of the cause of action, or merely a part of or step in the remedy.

Nelson, 567 N.W.2d at 772 (citation omitted) (emphasis added). "Payment made to appellant pursuant to a settlement agreement with the tortfeasor is not part of appellant’s cause of action under the policy." Id. at 772. "[S]teps taken by a claimant in ascertaining what underinsured motorist benefits she might be entitled to, do not preclude the statute of limitations from beginning to run." O’Neill, 381 N.W.2d at 441 (citation omitted).

The provision in Allstate’s policy that required the Oaneses to exhaust all other remedies, either from payments of available judgments or settlements, is a requirement that the Oaneses needed to fulfill in order to obtain payment and is not "part of the cause of action." The use of the word "payment" instead of "coverage" indicates that the claimant is required to ascertain what other remedies she is entitled to from the tortfeasor(s) before Allstate is required to make a payment. Therefore, the "no payment * * * until" language in Allstate’s policy is not similar to the "no coverage until" language in Sargent. The district court did not err in concluding that appellants’ underinsured motorist claim is barred by the six-year statute of limitations.