In a bad-faith lawsuit, if the court dismisses because the statute of limitations has expired, what does this imply?

• A. The limits of the policy had been exceeded.
• B. There was no basis to pierce the corporate veil.
• C. She was immune to prosecution as an employee.
• D. Too much time had expired after the claim concluded.

Answer: (D)

The main idea tested is that statutes of limitations set a time limit to file a claim, and if that period expires, the case must be dismissed even if the claim has merit. When a bad-faith action is dismissed for being untimely, it means the window to sue has closed and the claim is time-barred. In this scenario, too much time has passed after the claim accrued, so the court cannot hear the case. The other options refer to policy limits, veil piercing, or immunity—topics unrelated to filing deadlines and thus do not explain why the case was dismissed for being late.