Boyce v. Allstate Ins. Co., 15102

• Decision Date: 19 March 1996
• Docket Number: No. 15102,15102
• Parties: Shirley BOYCE v. ALLSTATE INSURANCE COMPANY.
• Court: Connecticut Supreme Court

Page 77

673 A.2d 77

236 Conn. 375

Shirley BOYCE v. ALLSTATE INSURANCE COMPANY.

No. 15102.

Supreme Court of Connecticut.

Argued Dec. 7, 1995.

Decided March 19, 1996.

Joel J. Rottner, with whom were Robyn L. Sondak and Susan L. Miller, West Hartford, for appellant (defendant).

John Q. Gale, with whom was Kathleen Kowalyshyn, Hartford, for appellee (plaintiff).

Before CALLAHAN, BORDEN, BERDON, KATZ and PALMER, JJ.

CALLAHAN, Associate Justice.

The plaintiff, Shirley Boyce, ¹ brought suit against the defendant, the Allstate Insurance Company, to recover the proceeds of a fire insurance policy issued by the defendant. A jury found for the plaintiff on his complaint and on the defendant's counterclaim, and the trial court rendered judgment in accordance with the jury's verdicts. ² The defendant subsequently moved to set aside the verdicts and to render judgment notwithstanding the verdicts on the ground that the plaintiff was precluded from recovering on the policy because he had not commenced this action within one year from the date of the fire loss he had suffered, as required by a policy provision. ³ The trial court denied the defendant's motion. In its memorandum of decision, the court incorporated its earlier ruling denying a motion by the defendant for summary judgment. In that ruling, the court had denied summary judgment for the defendant because it had determined that whether the defendant was equitably estopped from denying payment of the plaintiff's claim was a question of fact. The defendant appealed from the judgment of the trial court to the Appellate Court, and we transferred the appeal to this court pursuant to Practice Book § 4023 and General Statutes § 51-199(c).

The defendant claims that because it did not expressly waive the statutorily mandated ⁴ requirement in the policy that the plaintiff initiate suit on the policy within one year from the date of his fire loss and because it was not estopped from enforcing the provisions of the policy, it was entitled to judgment notwithstanding the verdict. We agree that the defendant was not estopped, and reverse the judgment accordingly.

Certain facts are undisputed. The plaintiff was the owner of a three family house located at 539 Blue Hills Avenue in Hartford. The plaintiff resided in the first floor apartment, and rented the second and third floor apartments to tenants. On May 11, 1987, a fire substantially damaged the house. The plaintiff immediately notified the defendant, which provided fire insurance coverage on the premises pursuant to a homeowner's policy. The following day, a representative of the defendant conducted a brief investigation on the premises and gave the plaintiff a check for $10,000 as an advance payment for the fire damage. Shortly thereafter, however, the defendant learned that the plaintiff was suspected of having been involved in causing the fire and issued a stop payment order on the check.

On May 15, 1987, at the defendant's request, the plaintiff voluntarily signed a nonwaiver agreement. The agreement provided that the defendant's investigation into the cause of the fire did not operate as a waiver of either party's rights under the policy or as a waiver of any of the terms and conditions of the policy. ⁵ Thereafter, on June 16, 1987, as required by the policy, the plaintiff filed a proof of loss claim with the defendant, requesting that the defendant provide coverage for the fire damage to his house and its contents, and for the interruption of rental income. ⁶

Subsequently, the plaintiff was arrested and charged with arson in the second degree in violation of General Statutes § 53a-112 ⁷ in connection with the fire. The plaintiff pleaded nolo contendere to the charge and was found guilty in June, 1989. ⁸

While the arson charge was pending against the plaintiff, the defendant requested by mail that, pursuant to the terms of the policy, the plaintiff submit to an examination under oath regarding his claim. The letter sent to the plaintiff also informed him that "[t]he noticing of your examination under oath in no way shall be construed to be a waiver by [the defendant] of its rights or defenses under the policy of insurance referred to above." Because of the pending criminal prosecution, the plaintiff, on the advice of counsel in his criminal case, did not appear for the scheduled examination. Counsel handling the plaintiff's fire insurance claim then contacted counsel for the defendant by telephone and informed him that the plaintiff would not give sworn testimony until the resolution of his pending criminal prosecution. In response, on January 18, 1988, the defendant's counsel wrote a letter to the plaintiff's counsel requesting that he be notified when the plaintiff would be available to be examined under oath. The plaintiff notified the defendant in September, 1989, and, again, in October, 1989, that he was available to be examined.

Thereafter, on November 16, 1989, the defendant notified the plaintiff that it was denying his claim. ⁹ Subsequently, on January 25, 1990, almost two years and eight months after the fire, the plaintiff brought this action, alleging that the defendant had breached the insurance policy by improperly denying coverage and claiming that he was entitled to compensatory and punitive damages. The defendant pleaded as a special defense that the plaintiff's action was precluded by the one year statutory limitation on suit provision in the policy. The defendant also counterclaimed, seeking reimbursement for the sums it had paid to the plaintiff's mortgagee, ¹⁰ and for attorney's fees and other costs it had expended investigating the plaintiff's claim. In response, the plaintiff asserted that the defendant should be estopped from raising the defense of the time limit on suit in the policy because, on the basis of the defendant's conduct, the plaintiff had reasonably believed that the defendant had waived its right to rely on that provision. The jury agreed with the plaintiff, and returned a verdict in his favor on both his claim for damages and the defendant's counterclaim. Following the jury's verdicts, the defendant moved to set aside the verdicts and for judgment notwithstanding the verdicts on the ground that there was insufficient evidence to support the plaintiff's contention that the defendant had impliedly waived, or should be estopped from asserting, the statutory limitation on suit contained in the policy. The trial court denied the motion, concluding that there was sufficient evidence to support the jury's determination that the defendant was estopped from asserting the time limitation. ¹¹ This appeal followed. ¹² We reverse in part. ¹³

Our review of a trial court's decision on a motion to set aside a verdict and to direct a verdict in favor of the movant is well established. "In considering a motion to set aside the verdict, the court must determine whether the evidence, viewed in the light most favorable to the prevailing party, reasonably supports the jury's verdict. Campbell v. Gould, 194 Conn. 35, 41, 478 A.2d 596 (1984)." (Internal quotation marks omitted.) Childs v. Bainer, 235 Conn. 107, 112, 663 A.2d 398 (1995). In reviewing the action of the trial court in denying a motion to set aside the verdict, "[i]t is the function of this court to determine whether the trial court abused its discretion...." Mather v. Griffin Hospital, 207 Conn. 125, 139, 540 A.2d 666 (1988). "The verdict will be set aside and judgment directed only if we find that the jury could not reasonably and legally have reached [its] conclusion...." (Internal quotation marks omitted.) Fleming v. Garnett, 231 Conn. 77, 83, 646 A.2d 1308 (1994). "If, on the evidence, the jury could reasonably have decided as [it] did, [the reviewing court] will not find error in the trial court's acceptance of the verdict.... However, it is the court's duty to set aside the verdict when it finds that it does manifest injustice, and is ... palpably against the evidence...." (Internal quotation marks omitted.) Childs v. Bainer, supra, at 113, 663 A.2d 398.

The defendant claims that, because the plaintiff did not commence suit within one year of the date of loss as required by the policy and by § 38a-307 and because there was no express waiver of the time limitation as required by the statutory provision in the policy, the plaintiff's claim must fail as a matter of law. The policy provides in relevant part that "[n]o permission affecting this insurance shall exist, or waiver of any provision be valid, unless granted herein or expressed in writing added hereto." The defendant argues that the plaintiff's noncompliance with this provision alone is dispositive and prevents the plaintiff from recovering. ¹⁴ In the alternative, the defendant argues that the plaintiff failed to carry his burden of demonstrating that the defendant, by its actions, was equitably estopped from relying on the statutory time limit for commencing suit on the policy.

The plaintiff does not claim that the defendant expressly waived any of the terms of the policy. He contends, instead, that the doctrine of equitable estoppel precludes the defendant from asserting the policy provision limiting the time to commence suit as a defense to this action. The plaintiff argues that the evidence adduced at trial supports the jury's conclusion that the defendant's actions induced him to believe that the statutory policy provision containing the one year limit on commencing suit would not be enforced.

We agree with the plaintiff that, despite the lack of evidence of an express waiver of the terms of the policy, he could pursue this action under the theory of equitable estoppel. We conclude, however, that the dearth of evidence of misleading conduct on the part of the defendant defeats the plaintiff's recovery based on estoppel, and that the trial court should have granted the defendant's motion to set aside the verdict and for judgment notwithstanding the...