Conte v. Yorkshire Ins. Co. of N.Y.

• Court: New York Supreme Court
• Writing for the Court: OWEN McGIVERN
• Citation: Conte v. Yorkshire Ins. Co. of N.Y., 163 N.Y.S.2d 28, 5 Misc.2d 670 (N.Y. Sup. Ct. 1957)
• Decision Date: 03 April 1957
• Parties: Vincenzo CONTE, d/b/a J. C. Trucking Co., Plaintiff, v. The YORKSHIRE INSURANCE COMPANY OF NEW YORK, Defendant.

Page 28

163 N.Y.S.2d 28

5 Misc.2d 670

Vincenzo CONTE, d/b/a J. C. Trucking Co., Plaintiff, v. The YORKSHIRE INSURANCE COMPANY OF NEW YORK, Defendant.

Supreme Court, Special Term, New York County, Part III.

April 3, 1957.

James A. Roe, Jr., New York City, for plaintiff.

Max J. Gwertzman, New York City, for defendant.

OWEN McGIVERN, Justice.

In this action by an insured under a fire insurance policy to recover the amount of an alleged fire loss, plaintiff has moved for summary judgment and the defendant has made a cross motion for similar relief.

The principal defense is the one-year statute of limitations contained in the so-called standard form fire insurance policy prescribed by section 168 of the Insurance Law. Concededly, the instant action was not commenced within twelve months 'after inception of the loss', as required by the standard policy. But in this particular instance, there was omitted from the policy issued to the plaintiff, and upon which this suit was based, the statutory provision of section 168 which dictates the institution of an action within twelve months after the occurrence of a loss. The defendant now attributes this omission to a printer's error, but nevertheless would hold the plaintiff to the short statute of which he had no apparent notice. The plaintiff contends that the defendant is bound by the policy it actually issued, and that the provisions of the Insurance Law calling for standard policies is solely for the benefit of insureds.

It is the conclusion of this court that the defendant is estopped from relying on the short statute of limitations, applicable generally to standard fire insurance policies of this state, and which would have been available as a defense, if the policy before us had included the necessary provision.

The history of statutory insurance clearly indicates that standard policies were made obligatory upon insurance companies to protect ingenuous insureds against the refinements and legalisms devised by the companies. Whenever the Legislature stepped into this area its purpose was to afford the insured more protection and less obfuscation (cf. 3 Richards on Insurance, 5th ed., sec. 497, et seq.). We are on firm ground then when we say that primarily, standard policies are for the safeguarding of policy holders.

Of course, if for any reason at all, apparent or ulterior, an insurer chooses to waive benefits conferred by the statutes providing for uniform policies, this may be done. Thus, as to the specific provisions for a short statute of limitations, it has been said:

'The policy provision being in derogation of the general statute of limitation, the courts are not slow in holding the company estopped from insisting upon it, where the promise or conduct of the company has induced the delay' (Idem, § 557, p. 1875).

Also, as was recently stated:

'However, it is equally well established that policy provisions requiring an action to be brought within a time limited after the happening of the event may be waived by the insurer. Bowen v. Preferred Accident Ins. Co., 82 App.Div. 458, 81 N.Y.S. 840; Aktiebolaget Malareprovinsernas Bank v. Hanover Fire Ins. Co., 211 App.Div. 608, 208 N.Y.S. 173, reversed on other grounds 241 N.Y. 551, 150 N.E. 551' (Longe's Estate v. Assurance Co. of America, Sup., 107 N.Y.S.2d 961, 963).

The Bowen case and that of Aktiebolaget Malareprovinsernas Bank, cited by the court in Longe's Estate v. Assurance Co. of America, supra fully uphold the proposition for which they were cited. In Sassi v. Jersey Trucking Service, Inc., 283 App.Div. 73, 78-79, 126 N.Y.S.2d 389, 394, our Appellate Division said, in passing upon a motion for summary judgment:

'We need not reach the question as to whether the twelvemonth statute of limitations was waived by the insurance company, but we deem it expedient to state that although rather conclusory, the allegations in the appellant's affidavit were sufficient to raise an issue requiring trial.'

Implicit in this statement is a clear recognition of the proposition that the benefit of a standard short statute of limitation may be waived by an insurance company and that whether it was so waived may present a triable issue.

It is but a short and logical step to further declare that if by its conduct a company may waive any advantage accruing to it from a short statute of limitations, then it may also be estopped from relying on it when it fails to include in the policy a specific provision limiting the time of the insured for the commencement of an action; by failing to so warn the insured, the ordinary insured has no intimation that his time to sue has been limited.

In any event, the statute makes it incumbent upon the company to deliver to the policyholder a printed form of fire insurance which embodies the standard provisions stipulated in the statute, including the proviso limiting the commencement of an action to a twelve-month period. § 168 of the Insurance Law. The insured has no duty or responsibility in this respect, and speaking realistically, has no reason to know of such a limitation. If the company, as in the case at bar, fails to provide him with a proper policy, one which complies with the statute, it should suffer the consequences of its neglect and not suddenly pull a trapdoor on the innocent insured who parted with the premiums.

This particular defendant asserts that as a result of a typographical error the stipulation for a short period of limitations was omitted from the policy under consideration. And there is not the slightest vestige of a reason to doubt its good faith. But if the short statute were to apply to every policy, even when as here it was not included in the policy, some companies might lapse into lax habits and omit the provision in the vague expectation that insured persons who had suffered losses would not consult counsel in time to initiate an action.

It is the considered view of this court that a period of limitation, so short as this, one-sixth of the accepted time for the start of an action in contract, should not be imposed upon an insured without his knowledge (see generally, in addition to cases hereinabove cited, Meekins v. Aetna Ins. Co., 231 N.C. 452, 57 S.E.2d 777, 15 A.L.R.2d 949; and cases cited and discussed in annotation, 15 A.L.R.2d, pages 955-962; also see Insurance Co. of North America v. Board of Education, etc., 10 Cir., 196 F.2d 901, and 29 A.L.R.2d, Annotation, pages 638 et seq.).

Nor is this view weakened by the dicta in the cases on which the defendant herein relies. In Hamilton v. Royal Insurance Co., 156 N.Y. 327, 50 N.E. 863, 42 L.R.A. 485, the insured plaintiff did not cause process to be served within one year, and the defendant company pleaded the one-year statute which had been specifically written into the policy; in considering the narrow issue before it (viz., whether Code Civ.Proc., § 399, now § 17 of the Civil Practice Act, should be conjoined for consideration) the court did not need to consider what would have been the effect of the company's failure to have included in the policy the short period of limitation. Nor was the court concerned with the possible application of an estoppel against the company. And regardless of the dicta that gives such comfort to the defendant, the net result of the decision was to extend the period of limitation for the benefit of the insured.

Similarly, reliance by the defendant upon Hicks v. British America Assurance Company, 162 N.Y. 284, 56 N.E. 743, 48 L.R.A. 424, appears to be misplaced. There the court held that the standard provision for service by the insured of proofs of loss should be implied in an oral contract of fire insurance. In that case no policy of insurance had been delivered and there was no written agreement of insurance. There was simply a verbal contract between the insured and an agent of the insurance company. As the court said (162 N.Y. at page 288, 56 N.E. at page 744):

'The jury have found that the defendant's agent said to Hicks, after a general discussion on the subject of insuring the property, 'You are insured from noon on the 30th day of December, 1893, to noon of December 30, 1894.''

In such circumstances it was obviously necessary for the court to ascertain the terms of insurance which were not reduced to writing and which were not even orally discussed except as to the 'sum for which the property was to be insured, the amount of premiums, and the period of insurance' (162 N.Y. at page 289, 56 N.E. at page 744). The terms of insurance which the court concluded that the parties had impliedly assumed were those provided by statute for standard contracts of insurance. This was a reasonable and indeed a necessary result. Broad and general...