DiIorio v. Abington Mut. Fire Ins. Co.

• Decision Date: 21 June 1979
• Docket Number: No. 77-138-A,77-138-A
• Citation: 402 A.2d 745,121 R.I. 689
• Parties: Theresa DiIORIO v. ABINGTON MUTUAL FIRE INSURANCE COMPANY. ppeal.
• Court: Rhode Island Supreme Court

Page 745

402 A.2d 745

121 R.I. 689

Theresa DiIORIO v. ABINGTON MUTUAL FIRE INSURANCE COMPANY.

No. 77-138-Appeal.

Supreme Court of Rhode Island.

June 21, 1979.

[121 R.I. 698] Nugent & Nugent, J. Joseph Nugent, Jr., Providence, for plaintiff.

Hanson, Curran & Parks, David P. Whitman, Providence, for defendant.

OPINION

WEISBERGER, Justice.

This is a civil action in which the plaintiff, the named insured in a homeowner's insurance policy issued by the defendant Abington Mutual Fire Insurance Company (insurer), seeks to be indemnified for damage to her home allegedly caused by the freezing and bursting of plumbing pipes when a faulty oil burner broke down.

The case was tried to a jury in the Superior Court. The trial justice granted the insurer's motion for a directed verdict on November 26, 1976, and judgment was accordingly entered against plaintiff on November 29, 1976. The case is before us on appeal from this judgment pursuant to G.L. 1956 (1969 Reenactment) § 9-24-1, as amended by P.L. 1975, ch. 244, § 1.

The following evidence was adduced in the course of plaintiff's presentation of her case. On January 18, 1974, plaintiff left her house at 5 p. m. to visit her sister for the weekend. When she returned home 3 days later on January 21, 1974, at 2 p. m., she found that her house was cold, the cellar was flooded and water was running onto her kitchen floor through the ceiling above. The flooding caused extensive damage to her home and furnishings. Thereafter plaintiff's attorney contacted the insurer's agent on February 19, 1974 and advised the agent of the loss. The agent assigned the claim to an adjuster, Mr. Rourke, who sent a proof of loss form to plaintiff on April 12, 1974. The plaintiff completed the form and returned it to the adjuster on May 20, 1974. On or about September 18, 1974, plaintiff received a letter from the adjuster advising her that the proof of loss form had been rejected for certain enumerated reasons:

"(a) The cause and origin of the loss is not truly stated;

"(b) The purported Proof of Loss does not truly state the value of the property allegedly damaged and destroyed;

"(c) The property alleged to have been damaged or destroyed has not been properly itemized;

"(d) The actual cash value of each item of loss and the amount of the loss thereto is not set forth."

The plaintiff submitted a second proof of loss form and received an identical rejection letter on October 18, 1974.

At this point, approximately 10 months after the date of the loss, plaintiff filed suit on November 15, 1974, against the insurer in the District Court. In her complaint, plaintiff alleged that the insurer had breached the terms of the insurance policy by rejecting her proof of loss even though the damage to her home was covered by the terms of the policy. As a result of this conduct of the insurer, plaintiff alleged that she incurred uncompensated expenses in restoring her home, sustained unreimbursed damages for loss of the use of her home and suffered emotional and physical stress. The plaintiff demanded judgment in the amount of $5,000, plus interest, costs and attorney's fees.

On July 7, 1975 plaintiff's attorney withdrew from the case. A new attorney was retained in his place and at his request the complaint was dismissed on July 22, 1975. The new attorney filed a second complaint in the Superior Court on August 15, 1975, approximately 19 months after the date of the loss. In the second complaint, plaintiff raised the demand for judgment to $500,000, plus interest, costs and attorney's fees.

The second complaint consisted of two counts, one sounding in contract and the other in tort. Count I in substance alleged a breach of the duty of good faith and fair dealing between the parties to an insurance contract and requested a declaratory judgment concerning the parties' rights and liabilities under the contract. In Count II plaintiff alleged several tort theories of recovery, only one of which is relevant to this appeal. That theory of recovery is based on a breach of the duty of good faith and fair dealing by the insurer.

The trial justice directed a verdict on Count I of the complaint on the basis that suit in the Superior Court was not commenced within the 1-year limitation of actions period contained in the insurance policy, and that the Rhode Island saving statute, § 9-1-22, which allows a new action to be brought within a year after termination under certain circumstances, does not apply where the dismissal of an action is voluntary. The trial justice also found that there was insufficient evidence in the record to establish a prima facie case of estoppel against the insurer. The trial justice directed a verdict on Count II on the basis that a cause of action in tort for a breach of the duty of good faith and fair dealing does not exist in this jurisdiction and even if it does, there is insufficient evidence in the record to withstand a motion for a directed verdict. The plaintiff appealed from the judgment entered pursuant to the granting of a directed verdict on each count.

On appeal from the granting of a motion for a directed verdict we have the same duty as the trial justice to view the evidence and the inferences to which it is reasonably susceptible in the light most favorable to plaintiff and without regard to its weight or the credibility of the witnesses, Gonsalves v. First National Stores, Inc., 111 R.I. 438, 304 A.2d 44 (1973), in making the determination of whether the evidence is sufficient in law to support a verdict in plaintiff's favor. Marshall v. Tomaselli, R.I., 372 A.2d 1280 (1977); Simeone v. Prato, 82 R.I. 496, 111 A.2d 708 (1955).

The plaintiff contends that the trial justice erred in directing a verdict on Count I because the 1-year limitations period contained in the policy does not act as an absolute bar to suit in every case. Although there have been situations in which we have not strictly enforced the limitations period, our review of the record reveals no evidence to support plaintiff's contention that the present case is one of them.

The limitations period in question is required to be included in every fire insurance policy by G.L. 1956 (1968 Reenactment) § 27-5-3. Lines 157-161 of that section read as follows:

"No suit or action on this policy for the recovery of any claim shall be sustainable in any court of law or equity unless all the requirements of this policy shall have been complied with, and unless commenced within twelve (12) months next after inception of the loss."

It is undisputed by the parties to this appeal that this term has been incorporated into the homeowner's policy which includes fire as one of the perils against which plaintiff is insured.

The rights and liabilities of the parties to an insurance contract are to be ascertained in accordance with the terms as set forth therein. Donahue v. Hartford Fire Insurance Co., 110 R.I. 603, 295 A.2d 693 (1972). A 1-year limitations period in an insurance policy is a term to which the parties are specifically bound. Greater Providence Trust Co. v. Nationwide Mutual Fire Insurance Co., 116 R.I. 268, 335 A.2d 718 (1976).

Our refusal to apply the 1-year limitations period contained in an insurance policy in cases cited by plaintiff, Messler v. Williamsburg City Fire Insurance Co., 42 R.I. 460, 108 A. 832 (1920) and Koury v. Providence-Washington Insurance Co., 50 R.I. 118, 145 A. 448 (1929), is completely consistent with the above stated rule. In those cases we determined as a...