Northwest Airlines, Inc. v. Ontario Aircraft Services, Inc.

Plaintiff and appellant Northwest Airlines, Inc. (Northwest) alleged in its complaint that an insurer, Great American, breached its obligation required by a regulation to inform Northwest of the statute of limitations applicable to its claim against Great American's insured, Ontario Aircraft Services, Inc. (Ontario). After the period of the applicable statute of limitations expired, Northwest filed its action against Ontario claiming that Ontario is estopped from raising the statute of limitations based on its insurer's (Great American's) failure to comply with its obligation to inform Northwest of the applicable statute of limitations. The trial court sustained Ontario's demurrer without leave to amend on the grounds that the statute of limitations barred the action and that Ontario was not estopped to invoke the statute of limitations. We reverse the trial court's judgment and hold that the insurer's failure to comply with its obligation by regulation to inform a third party claimant of the statutory time limits pertaining to the claim may estop the insured from relying on the applicable statute of limitations in defense of the third party claim against the…