Dec. 17, 2019
- Whether a one-year statute of limitations in an insurance policy was unenforceable for violating public policy and whether genuine issues of material fact existed on several challenges to the statute of limitations defense.
The plaintiffs’ home suffered damage due to burst pipes, and they filed a claim with the defendant insurer. The defendant denied the plaintiffs’ claim. The insurance policy contained a provision that stated: “No action can be brought unless the policy provisions have been complied with and the action is started within one year after the date of loss.” Although the parties’ counsel communicated regarding possible settlement pre-suit, the plaintiffs sued the defendant for breach of contract nearly two years after their loss and more than a year after the claim was denied. The defendant filed a motion for summary judgment on the basis that the one-year statute of limitations in the contract barred the claims. The plaintiffs’ opposed summary judgment and argued that the one-year statute of limitations was unenforceable for violating public policy and that the conduct of the defendant gave rise to estoppel, waiver, or tolling defenses to the statute of limitations bar.
Although the Court previously held that agreements to extend the limitations period violated public policy by permitting stale claims to be heard, this contract for a reduced limitations period did not violate any recognized public policy. The plaintiffs also argued that the effect of the contract was that they had less than a year to file a lawsuit, which was unreasonable because the insurer could take steps that would cause the plaintiffs to receive a denial of their claim after more than a year had passed from the date of loss. The Court assumed without deciding that the one-year statute of limitation may run from the date of denial rather than the date of loss, but the suit would still be time-barred in this case. Finally, the plaintiffs argued that the requirement for the insured to comply with all policy provisions acted as a condition precedent that could cause the insured to be unable to file a claim within the limitations period. The Court found that the provision was not unreasonable as it applied to these plaintiffs because there was no evidence that they could not have filed their claim within a year.
The Court was also unpersuaded that there were genuine issues of material fact as to whether the defendant’s communications tolled the limitation period or constituted grounds for a finding of estoppel or waiver of the defense. Even if a contractual statute of limitations could be tolled in the same manner as a statutory limitation, the defendant’s counsel’s request for information and statement that the defendant “would like to resolve this claim if possible” did not create a genuine issue of material fact as to whether the defendant acknowledged a debt or made a direct or unqualified admission of liability or willingness to pay. Similarly, the communications could not be interpreted as a promise to resolve the claim through negotiations that the plaintiffs could have relied on to show estoppel. Finally, the Court also found that no interpretation of the communications could lead to a conclusion that the defendant waived the statute of limitations defense.
Roy W. Tilsley, Jr., Bernstein, Shur, Sawyer & Nelson, with Hilary Holmes Rheaume (on the brief), Manchester, for the plaintiff. Gary M. Burt, with John D. Prendergast (on the brief), Primmer Piper Eggleston & Cramer, Manchester, for the defendant.