Adams v. Northern Ins. Co. of New York, 1

• Decision Date: 08 February 1972
• Docket Number: No. 1,CA-CIV,1
• Citation: 16 Ariz.App. 337,493 P.2d 504
• Parties: Grace Anne ADAMS, Appellant, v. NORTHERN INSURANCE COMPANY OF NEW YORK, a New York insurance corporation and capital stock company, Appellee. 1498.
• Court: Arizona Court of Appeals

Page 504

493 P.2d 504

16 Ariz.App. 337

Grace Anne ADAMS, Appellant, v. NORTHERN INSURANCE COMPANY OF NEW YORK, a New York insurance corporation and capital stock company, Appellee.

No. 1 CA-CIV 1498.

Court of Appeals of Arizona, Division 1, Department A.

Feb. 8, 1972.

Rehearing Denied March 6, 1972.

Harrison, Myers & Singer by Noel K. Dessaint, Phoenix, for appellant.

O'Connor, Cavanagh, Anderson, Westover, Killingsworth & Beshears by John H. Lyons, Phoenix, for appellee.

CASE, Judge.

This is an appeal from a summary judgment in favor of appellee Northern Insurance Company of New York and an order denying a motion for partial summary judgment filed by Grace Anne Adams, appellant herein. The parties will be referred to herein as they appeared in the trial court.

Plaintiff filed an action in the Superior Court of Maricopa County against defendant Northern Insurance Company of New York seeking damages for an alleged breach of a Homeowners insurance policy. Plaintiff's home and its contents were damaged by a fire which occurred 9 July 1967. Defendant's representatives undertook to investigate this fire on 10 July 1967. On 24 October 1967 plaintiff mailed to defendant a purported proof of loss statement which defendant rejected on 22 November 1967. Thereafter, on 31 October 1968 plaintiff filed suit. Defendant filed a motion for summary judgment upon the grounds that plaintiff had not timely filed her suit as required by the terms of the policy to which plaintiff responded and filed a cross-motion for partial summary judgment as to the issue of liability of the defendant.

Five issues were argued to the trial court which are as follows:

1. Was Northern's homeowners policy a property policy within the terms and meaning of A.R.S. § 20--1115, subsec. A, par. 3?

2. Was Northern's policy provision, that suit must be commenced within twelve months after the inception of the loss, invalid?

3. Was A.R.S. § 12--548 the proper statute of limitations applicable to Northern's policy?

4. When did the twelve-month limitation period provided in Northern's policy begin to run?

5. Was plaintiff entitled to partial summary judgment on the issue of liability? The trial court resolved these issues in favor of defendant and found that the policy was a 'property' insurance policy; that the one-year limitation contained therein was a valid provision; that the one-year period began to run from the date of the fire and that A.R.S. § 12--548 was inapplicable. The trial court also denied plaintiff's motion for partial summary judgment.

The policy herein contains the following provisions:

'. . . within sixty days after the loss . . . the insured shall render to this Company a proof of loss . . .

'The amount of loss for which this Company may be liable shall be payable sixty days after proof of loss . . . is received by this Company and ascertainment of the loss is made either by agreement between the insured and this Company expressed in writing or by the filing with this Company of an award as herein provided.

'No suit or action on this policy for the recovery of any claim shall be sustainable in any court of law or equity unless . . . commenced within twelve months next after the inception of loss.'

Plaintiff contends that the policy involved, being a 'homeowners' policy, is not a 'property' policy within the meaning of A.R.S. § 20--1115, subsec. A, par. 3 which provides:

'A. No policy delivered or issued for delivery in this state and covering a subject of insurance resident, located or to be performed in this state, shall contain any condition, stipulation or agreement:

'3. Limiting the time within which an action may be brought to a period of less than two years from the time the cause of action accrues in connection with all insurances other than property and marine and transportation insurances. In property and marine and transportation policies such time shall not be limited to less than one year from the date of occurrence of the event resulting in the loss.' (Emphasis supplied)

We do not agree. Plaintiff's complaint alleges that she has 'sustained a property loss.' It is apparent that she is suing under the property loss portion of the policy. Plaintiff urges that this portion cannot be separated from the rest of the policy and that while the coverages are separate and distinct it is one contract.

While the terms which relate to each other within the policy must be read together, the policy is divisible into two parts and the portion concerning property insurance is within the scope of A.R.S. § 20--1115, subsec. A, par. 3. This is in accord with the majority rule enunciated in 4 Appleman, Insurance Law and Practice, § 2372 (1969) where it is stated:

'A policy purporting to be entire may be divisible and severable where it covers several different kinds of risks. . . .'

The case of Consumer's Money Order Corp. of America, Inc. (Mo.) v. New Hampshire Ins. Co., 386 S.W.2d 674, 677 (Mo.App.1964) holds in part.

'It is a general rule of law that a policy of insurance purporting to be entire may be divisible and severable, where it covers several different kinds of risks or property at different locations. The question rests upon the intention of the parties, which intent must be deducible from the stipulations in the contract and the application of the rules governing the ascertainment of that intent. If the character of the risks assumed is such that what affects the risk on one item does not affect the risk on the others the parties must have intended that the policy should be regarded as severable and divisible,...