Centennial Insurance Company v. Dowd's Inc.

• Decision Date: 21 June 1973
• Docket Number: No. 6609.,6609.
• Citation: 306 A.2d 648
• Parties: CENTENNIAL INSURANCE COMPANY, Appellant, v. DOWD'S INC., a/k/a Dowd's Rado and Electric Company, Appellee.
• Court: D.C. Court of Appeals

Page 648

306 A.2d 648

CENTENNIAL INSURANCE COMPANY, Appellant, v. DOWD'S INC., a/k/a Dowd's Rado and Electric Company, Appellee.

No. 6609.

District of Columbia Court of Appeals.

Argued November 7, 1972.

Decided June 21, 1973.

F. Wainwright Barnes, Washington, D. C., for appellant.

William G. Allen, Washington, D. C. with whom Francis J. Ortman, Washington, D. C., was on the brief, for appellee.

Before GALLAGHER, NEBEKER and HARRIS, Associate Judges.

HARRIS, Associate Judge:

Appellee Dowd's Inc. operates a retail appliance business at 4418 Connecticut Avenue; appellant Centennial Insurance Company is Dowd's insurer with respect to certain aspects of its operations.

In purchasing insurance coverage against theft, it was necessary for Dowd's to decide what policy limits to have for certain types of risks. Considering the amount of cash which might be on the premises (or collected by drivers making C.O.D. shipments) while the store was open for business, a limit of $2,500 was decided upon for robbery. Considering both cash and the value of the amount of merchandise which might be placed in a large van at one time, a limit of $15,000 was agreed upon for burglary or "robbery of a watchman" during non-business hours.

Closing time arrived at 6:00 p. m. on Saturday, December 6, 1969. Four employees were on duty at the store. All customers had left. Normal closing duties were being performed, and the front and rear doors had been locked. Shortly a burglar alarm would have been set; Dowd's did not employ a night security guard.

A knock was heard at the front door. Tim Dowd (the owner's son) went to the door, and saw two men whom he did not recognize. He unlocked the door, opened it slightly, and advised the men that the store was closed. The men then drew guns and entered. They compelled Dowd to unlock the door to the rear loading dock, whereupon a third intruder came through that entrance. All four employees were tied up and forced to lie on the floor; one was struck on the head with a revolver.

The three intruders then loaded television sets and a variety of other appliances into a van belonging to Dowd's. They also took money and checks, and drove off in the van. As would be expected, no visible marks of forcible entry or exit were left on either of the doors of the store.

Counsel for both sides in the trial court commendably agreed upon a statement of facts, thereby obviating the necessity for an evidentiary trial. The total cash value of the stolen merchandise was $11,007.89. Cash totaling $123.46 was taken and the face value of the stolen checks amounted to $1,514.41. Several days after the crime, the van was found abandoned. In it were all of the stolen checks. None of the merchandise or cash was recovered. The total loss (cash and merchandise) suffered by Dowd's thus amounted to $11,131.35.

The coverage limit of $15,000 was applicable to burglary or robbery of a watchman "while the premises are not open for business." As relevant here, burglary was defined as "the felonious abstraction of insured property . . . from within the premises by a person making felonious entry therein by actual force and violence, of which force and violence there are visible marks . . . upon, or physical damage to, the exterior of the premises at the place of such entry. . . ." Robbery of a watchman was defined as "the taking of insured property by violence or threat of violence inflicted upon a private watchman employed exclusively by the Insured and while such watchman is on duty within the premises." Since the store was not open for business at the time of the incident, Dowd's took the position that burglary or robbery of a watchman had occurred, making applicable the policy limit of $15,000 rather than $2,500.

The incident occurred on the evening of Saturday, December 6; it was reported to the insurer's agent on Monday, December 8. On the next day, a statement describing the circumstances and an itemized list of the articles stolen (with their value) were submitted by Dowd's president, Robert T. Dowd, to a claims adjuster for Centennial. By letter dated December 12, 1969, the insurance carrier submitted a proof of loss form to be signed by Mr. Dowd. However, in preparing that proof of loss, the carrier expressly limited its coverage to $2,500, taking the position that the robbery clause was controlling rather than the burglary or robbery of a watchman clause. Mr. Dowd refused to sign that form, apparently believing that signing it could have constituted a waiver of the higher coverage level.

Several months passed. Dowd's then engaged counsel, who wrote to Centennial's agent on June 16, 1970, making demand for the full loss. That letter was forwarded by the agent to the insurance company. On July 15, 1970, the company advised Dowd's counsel that the entire claim was being disallowed since the insured had not submitted a signed proof of loss within 90 days of the theft.¹ Dowd's replied that its claim had been timely filed. On August 3, 1970, the carrier wrote Dowd's counsel again, stating in part: "It is our position that the Company completely disclaims coverage under [your policy]. We must refuse to make any offer of settlement."

The policy provides that no action may be brought thereunder unless it is initiated within one year of the discovery by the insured of the occurrence giving rise to a claim.² Following Centennial's letter of outright rejection dated August 3, 1970, no further communication of any kind took place between the parties until July 15, 1971. On that date, Dowd's filed suit, some 19 months after the incident had occurred.

Centennial filed a motion for summary judgment, arguing that the entire cause of action was barred because of the failure to have brought suit within one year. After a hearing, the motions judge apparently concluded that the one-year limitation period should be computed from the date when the carrier denied liability, rather than from the date of the theft. He denied the motion.

A date for trial subsequently was set. As noted, the parties agreed upon a statement of facts, leaving the trial judge solely with questions of law. He properly considered the earlier denial of the motion for summary judgment to be the law of the case. Cf. Jenkins v. United States, D. C.App., 284 A.2d 460 (1971). After a full hearing, the trial court ruled that the $15,000 coverage limit was applicable. Judgment accordingly was entered in favor of Dowd's in the amount of its full loss, $11,131.35.

Both parties agree that the two issues before us are: (1) Is the entire claim barred for Dowd's failure to file suit within 12 months of the loss? (2) Is the loss a "robbery" or a "burglary or robbery of a watchman" within the definitions of the insurance policy ?

Initially, the policy is explicit to the effect that an action thereunder must be instituted within 12 months of the occurrence (or discovery thereof) giving rise to a claim. Such a provision may not be rewritten judicially to have the limitation period run from the time of the denial of coverage.³...