G.R. No. 210302 - Integrated Micro Electronics, Inc. vs. Standard Insurance Co., Inc.

Integrated Micro Electronics, Inc. (Integrated Micro) secured an all-risk insurance policy (Policy No. HOF09FD-FAR086036) issued in March 2009 by a panel of insurers, including Standard Insurance Co., Inc. (Standard Insurance), among others.
The policy covered all properties of Integrated Micro against “all risks of physical loss, destruction of, or damage, including fire” for the period from March 31, 2009 to March 31, 2010.

A fire incident occurred on May 24, 2009 at Integrated Micro’s facility, causing damage to production equipment and machineries.
On May 25, 2009, Integrated Micro promptly filed a claim for indemnity based on the insurance policy.
Standard Insurance ultimately rejected the claim on February 24, 2010, on the ground that the loss was caused by an excluded peril.

Integrated Micro sought reconsideration by Standard Insurance, which was denied in a letter dated April 12, 2010 (received April 15, 2010).
Almost one year later, on April 11, 2011, Integrated Micro filed a complaint before the Regional Trial Court (RTC) seeking specific performance and damages amounting to US$1,117,056.84 or its peso equivalent, arguing for indemnity against Standard Insurance.

Invalid service of summons – the summons was allegedly served on the legal assistant or the secretary of Standard Insurance’s in-house counsel, rather than on the persons prescribed under the Rules of Court.
Lack of a viable cause of action – contending that mere allegation of a fire did not meet the policy requirement of the fire being “unforeseen, sudden, and accidental.”
Prescription – arguing that Integrated Micro filed the complaint beyond the 12-month period prescribed from the notice of rejection of their claim.

Although the RTC initially denied the motion to dismiss, Standard Insurance escalated the issue by filing a petition for certiorari with the Court of Appeals (CA).

Integrated Micro’s cause of action had prescribed because the complaint was filed more than 12 months after the rejection (the cause of action accrued on February 24, 2010).
The service of summons was invalid as it did not conform to the designated list of persons under Section 11, Rule 14 of the 1997 Rules of Court.

The cause of action should have accrued only upon final rejection (after reconsideration) and not upon the initial denial.
Service on the legal assistant or secretary constituted substantial compliance since Standard Insurance did receive the summons.

Was the summons properly served given that it was delivered to the legal assistant or the secretary of Standard Insurance’s in-house counsel rather than the persons specifically enumerated under Section 11, Rule 14 of the 1997 Rules of Court?

Did Integrated Micro file its complaint within the 12-month prescriptive period prescribed by the insurance policy after receiving notice of the claim rejection?
Should the prescriptive period be reckoned from the insurer’s initial rejection or from the final rejection after reconsideration?

How should the terms of the policy be construed regarding the commencement of the cause of action?
Is there any contractual basis or implication that filing a motion for reconsideration should suspend the running of the prescriptive period?