First Sec. Bank v. Fireman's Fund Ins. Co.

Decision Date24 June 1970
Docket NumberCA-CIV,No. 1,1
Citation12 Ariz.App. 476,472 P.2d 87
PartiesFIRST SECURITY BANK, an Arizona corporation, Appellant, v. FIREMAN'S FUND INSURANCE COMPANY, a foreign corporation, Appellee. 1045.
CourtArizona Court of Appeals

Skousen, McLaws & Skousen, by Richard E. Skousen, Mesa, for appellant.

Moore, Romley, Kaplan, Robbins & Green, by Robert A. Scheffing and Kenneth J. Sherk, Phoenix, for appellee.

HOWARD, Chief Judge.

This is an appeal from an order granting summary judgment.

Appellant, hereinafter called First Security, is a judgment creditor of the Shaffers who in turn made a claim against appellee, hereinafter called Fireman's, for the loss of part of a coin collection. First Security filed a writ of garnishment against Fireman's. A motion for summary judgment was made, granted and entered on behalf of Fireman's. First Security is appealing from said summary judgment.

Prior to this action Fireman's had issued a policy of insurance which insured Shaffer against the loss or theft of a certain coin collection owned by him. Sometime in January of 1967 part of the said collection was lost or stolen. Shaffer made a claim for the loss under his policy. On May 26, 1967 a writ of garnishment was served upon Fireman's seeking any money or property which it owed to Shaffer. On July 5, 1967, Fireman's denied Shaffer's claim.

The controlling question, as stated by First Security, is whether a creditor of the insured has the right to garnish a loss claim of the debtor-insured prior to Fireman's agreement to accept said claim for a stipulated amount. Fireman's claims that this particular debt was not subject to garnishment as it was unliquidated and contingent.

Let us begin by first examining the theory upon which Fireman's brought the motion for summary judgment in the trial court, namely, that First Security's claim as a creditor of Shaffer is barred by the contractual period of limitation of 12 months.

The insurance contract between Shaffer and Fireman's provides in condition 11 as follows:

'Suit. No suit, action or proceeding for the recovery of any claim under this policy shall be sustainable in any court of law or equity unless the same be commenced within twelve (12) months next after the discovery by the insured of the occurrence which gives rise to the claim, provided however, that if by the laws of the State within which the policy is issued, such limitation is invalid, then any such claim shall be void unless such action, suit or proceeding be commenced within the shortest limit of time permitted by the laws of such State.'

Basing their contention upon the above policy provision, Fireman's claims that since no suit, action or proceeding was brought within 12 months from the discovery of any claim sustained by loss or theft of Shaffer's coin collection, the claim is void. Thus, Shaffer has no cause of action against them and they are entitled to summary judgment against First Security.

The Arizona statutes allow a two-year period of time for bringing such an action. Such is the contention of First Security and it cites A.R.S. § 20--1115. The pertinent portions are as follows:

'A. No policy delivered or issued for delivery in this state and covering a subject of insurance resident, located or to be performed in this state shall contain any condition, stipulation or agreement:

3. Limiting the time within which an action may be brought to a period of less than two years from the time the cause of the action accures in connection with all insurances other than property, marine and transportation insurances. In property and marine and transportation policies such time shall not be limited to less than one year from the date of occurrence of the event resulting in the loss.'

The question then arises, does Fireman's policy fall under the classification of property insurance which limits the period to one year or under the general category limiting the time to a two-year period? First Security claims that upon examination of this particular policy, it is readily apparent that, basically, it provides insurance against burglary and theft and even describes itself as a personal articles floater policy on the face thereof. First Security further contends that this policy fits, more specifically into the class of casualty insurance, rather than property insurance.

A.R.S. § 20--252, defines casualty insurance as follows:

"Casualty insurance' includes vehicle insurance as defined in § 20--259, and in addition includes:

3. Burglary and theft insurance, which is insurance against loss or damage by burglary, theft, larceny, robbery * * * and also Insurance against loss of or damage to money, coins, * * * or any other valuable papers and documents Resulting from any cause.

4. Personal property floater insurance, which is insurance upon personal effects against loss or damage from any cause.' (Emphasis added)

A.R.S. § 20--256 defines property insurance as:

"Property insurance is insurance on real or personal property of every kind and interest therein, against loss or damage from any or all hazard of cause, and against loss consequential upon such loss or damage, other than noncontractual legal liability for any such loss or damage. Property insurance shall also include miscellaneaus insurance as defined in paragraph 11 of § 20--252 except as to any noncontractual liability coverage includable therein.' (Emphasis added)

The property insurance definition in the above section appears to be very broad and we must refer to A.R.S. § 20--1501 of art. 7 entitled, Property Insurance, which reads as follows:

'This article shall not apply to vehicle, Casualty, invalid marine or ocean marine insurance, or reinsurance.' (Emphasis added)

Furthermore, the statute dealing with property insurance (A.R.S. § 20--256) does not refer to, nor incorporate, the statute dealing with casualty insurance (A.R.S. § 20--252) except as to a subsection thereof dealing with miscellaneous insurance. This subsection is specifically included within property insurance. Thus, by implication, the remainder of the section on casualty insurance is excluded from the category of property insurance.

From an examination of the aforesaid statutes it is evident that property insurance is not intended to include casualty insurance. The Shaffer insurance policy falls under the classification of casualty insurance. Thus, being casualty insurance, the 12-month limitation in the insurance policy is invalid and...

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