Ashland Finance Co. v. Hartford Acc. & Indem. Co.
| Citation | 474 S.W.2d 364 |
| Parties | ASHLAND FINANCE COMPANY, Appellant, v. HARTFORD ACCIDENT & INDEMNITY COMPANY, Appellee. |
| Decision Date | 17 December 1971 |
| Court | United States State Supreme Court — District of Kentucky |
W. Henderson Dysard, Ashland, for appellant.
J. W. McKenzie, Ashland, for appellee.
CULLEN, Commissioner.
Ashland Finance Company procured from Hartford Accident and Indemnity Company a 'blanket bond' covering losses from dishonest or fraudulent acts of employes or from robbery, burglary or larceny by strangers. On December 23, 1965, Ashland discovered the loss of a note for some $5,200, it not being clear whether the loss was due to a dishonest act of an employe or to a burglary by a stranger. After a period of negotiations Hartford denied liability. Ashland brought suit on February 3, 1967. Judgment was entered dismissing the suit on the ground that it was barred by a limitation provision of the bond which required that suit be brought within one year after discovery of the loss. Ashland appeals from the judgment.
The development of the suit was somewhat extraordinary. Initially, both parties were under the impression that the bond contained a two-year limitation, and the original answer filed by Hartford, in undertaking to quote certain provisions of the bond, quoted a section which contained a two-year limitation clause (apparently this was from some other bond). Hartford did not plead limitations as to time of bringing suit because the suit was timely if the limit was two years. During the development of the suit the parties made a partial stipulation of facts, which included a stipulation that an attached copy of a bond was a true copy of the bond sued on. That copy showed that the limitation period was one year, but it appears that neither party had yet become aware that such was the limitation. The case was submitted to the trial court without any suggestion of an issue as to limitations. About two weeks later, Hartford tendered an amended answer in which the one-year limitation clause was pleaded as a bar to the action. Motion was made to file the answer 'to conform to the proof.' Notice of motion was served on Ashland but the court sustained the motion on the same day it was made, without giving Ashland any opportunity to be heard. About one month later the court entered findings of fact and conclusions of law in which the court found that the suit was barred by the one-year limitation clause. Ashland then moved for a new trial and to alter and amend the findings and conclusions, and asked that it be allowed to submit evidence on the issue of limitations. The court denied that motion and entered judgment dismissing the suit.
Ashland's primary contention is that the limitation period for suit on the bond should be considered to run from the expiration of a no-suit period specified in the bond, rather than from the date of discovery of the loss. A companion contention is that if the limitation period is not considered so to commence running, the limitation clause is void as specifying an unreasonably short period .
Under the provisions of the bond a period of three months is allowed, after discovery of loss, in which to file proof of loss, and the bringing of suit is barred prior to the expiration of three months from the furnishing of such proof. This means that there is a minimum of three months, and a possible maximum of six months (depending on how soon proof of loss is filed), in the period of one year after discovery of the loss allowed by the bond for bringing suit, in which suit cannot be brought, so that the effective period of limitation is from six months to nine months. Ashland points out that it was allowed until March 23, 1966, to file proof of loss (three months after discovery of loss); and that it then could not bring suit until June 23 (three months after proof of loss was due); it argues, therefore, that its suit brought within eight months after June 23 should be considered to be timely.
Some early Kentucky cases held that where an insurance policy purported to fix a limitation period running from the date of occurrence of the loss, but specified a period after occurrence of the loss during which action could not be brought on the policy, the...
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Smith v. Allstate Ins. Co.
...provisions under which the time for suit began to run before the insured had a right to sue. In Ashland Finance Co. v. Hartford Accident & Indemnity Co., 474 S.W.2d 364, 365-66 (Ky.1971), for example, Kentucky's highest court gave effect to a one-year limitations period running from discove......
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Rife v. Nationwide Ins., CIVIL ACTION NO. 7:18-CV-112-EBA
...limiting the right to sue to one year from the date of loss are valid and enforceable. See Ashland Finance Co. v. Hartford Accident & Indemnity Co., 474 S.W.2d 364, 365-66 (Ky. 1971); Webb v. Kentucky Farm Bur. Ins. Co., 577 S.W.2d 17 (Ky. App. 1978); See also Edmondson v. Pennsylvania Nati......
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Shupe v. Asplundh Tree Expert Co., 13-5747
...citation omitted). Kentucky's highest court has held that a six-month limitations period is reasonable. Ashland Fin. Co. v. Hartford Acc. & Indem. Co., 474 S.W.2d 364, 366 (Ky. 1971) (internal citation omitted). Shupe does not dispute the enforceability of a statute-of-limitations waiver. S......
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F.D.I.C. v. Hartford Acc. and Indem. Co.
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