It is no secret that insurance claims take time, and depending on the damage, these claims can take even longer to be resolved. One of the tactics insurance companies use is the affirmative defense of laches, which is a doctrine based in equitable estoppel.
Their argument is that the insured waited too long to file, which is unfair to the insurance company. In Tennessee, in order for this laches defense to be successful, the insurance carrier must prove (1) an inexcusably long delay caused by the claimant’s negligence in asserting its claim; and (2) an injury to another’s rights resulting from this delay.1
The landmark case for laches is Brown v. Ogle, as it provides a robust discussion on how Tennessee courts should analyze the defense, as well as providing the narrow instances where such defenses were successful.2 Though laches has not been adjudicated as to property insurance claims in Tennessee appellate courts, as noted in an earlier blog post:
Tennessee courts have long agreed that ‘insurance policies are, at their core, contracts.’3
Therefore, despite Brown being rooted in contract law, it remains as the valuable case on this issue when applied to property insurance.
Laches is a complicated legal doctrine as it presents a mixed question of both law and fact. Whether the above elements, negligent inexcusable delay and injury as a result, are satisfied is a question of fact; however, whether “it would be inequitable or unjust to the defendant to enforce the complainants’ right  is a question of law,” for judicial consideration.4 Unfortunately, this question of law is relative to the individual judge as “[n]o hard and fast rule for its [laches] application can be formulated.”5 In Brown, the court noted that:
Relief is generally refused by courts of equity, because of lapse of time, only in such cases where the loss of evidence, death of witnesses or parties, and failure of memory resulting in the obscuration of facts to the prejudice of the defendant, render uncertain the ascertainment of truth, and make it impossible for the court to pronounce a decree with confidence.6
The court also noted that the defense of laches is successful when the listed excuses are insufficient and more tactical in nature. The crux of laches is that it is an equitable remedy; therefore, fairness and justice play a significant role in the analysis by courts.
The doctrine of laches in courts of equity is not an arbitrary or technical doctrine. Where it would be practically unjust to give a remedy, either because the party has, by his conduct, done that which might fairly be regarded as equivalent to a waiver of it, or where, by his conduct and neglect, he has, perhaps, not waiving that remedy, yet put the other party in a situation in which it would not be reasonable to place him if the remedy were afterward to be asserted, in either of these cases, lapse of time is most material.7
When it is the appropriate time to file a lawsuit is not always easy to determine, but one should be aware of this defense by insurance companies that could prevent any recovery. When policyholders think it may be time to file a lawsuit, they should not wait too long to reach out.
1 Cincinnati Ins. Co. v. Malone, 2016 WL 58889 (Tenn. Ct. App., Oct. 7, 2016).
2 Brown v. Ogle, 46 S.W.3d 721 (2000).
3 Jamie Glass, Tennessee Court Interpretation of Insurance Contracts, PROPERTY INS. COVERAGE LAW BLOG (Dec. 30, 2020), https://www.propertyinsurancecoveragelaw.com/2020/12/articles/insurance/tennessee-court-interpretation-of-insurance-contracts/, quoting Allstate Ins. Co. v. Tarrant, 363 S.W.3d 508, 527 (Tenn. 2012) (Koch, J., dissenting).
4 Brown v. Ogle, 46 S.W.3d at 726.
6 Id. at 727.
7 Nicholson v. Holt, 174 Tenn. 358, 125 S.W.2d 483 (1939), quoting Lindsay Petroleum Co. v. Hurd, L.R. 5 P.C. 221, 239–40 (1874).