Foamcraft, Inc. v. First State Ins. Co.

• Decision Date: 23 November 1992
• Docket Number: No. 1-90-2305,1-90-2305
• Citation: 606 N.E.2d 537,179 Ill.Dec. 705,238 Ill.App.3d 791
• Parties: , 179 Ill.Dec. 705 FOAMCRAFT, INC., a Delaware corporation, Plaintiff-Appellant, v. FIRST STATE INSURANCE COMPANY, a foreign corporation, Defendant-Appellee.
• Court: United States Appellate Court of Illinois

Page 537

606 N.E.2d 537

238 Ill.App.3d 791, 179 Ill.Dec. 705

FOAMCRAFT, INC., a Delaware corporation, Plaintiff-Appellant, v. FIRST STATE INSURANCE COMPANY, a foreign corporation,

Defendant-Appellee.

No. 1-90-2305.

Appellate Court of Illinois,

First District, First Division.

Nov. 23, 1992.

Office of Michael J. Rovell, Chicago (Michael J. Rovell, Lisa I. Fair and Matthew N. Young, of counsel), for plaintiff-appellant.

Office of Clausen Miller Gorman Caffrey & Witous, P.C., Chicago (James T. Ferrini, Frank L. Schneider, Marta A. Stein, and Susan Condon, of counsel), for defendant-appellee.

Justice MANNING delivered the opinion of the court:

This is an appeal by plaintiff Foamcraft corporation from a order of the court granting defendant First State Insurance company's motion to dismiss and denying plaintiff's motion to amend its complaint.

In October 1986 plaintiff procured an all-risks property insurance policy from defendant. The initial policy was issued from October 1, 1987, through October 1, 1988, to cover plaintiff's property located on Van Buren street in Chicago, Illinois. The policy contained a clause which barred any suit brought under the policy if such suit was brought more than twelve months after discovery of an occurrence giving rise to a claim.

On April 8, 1988, plaintiff reported a loss to defendant for damage to its premises allegedly sustained by a windstorm that occurred April 6, 1988. The claim was referred to the Alper Agency and a representative began discussion of the coinsurance provision of the policy with Matthew Greene, an adjuster for defendant. No other issues related to the policy were discussed. Greene inspected the premises with Paul Gordon, a structural engineer. Based on his investigation, Greene concluded that the damage was due to structural deterioration called "rust jacking".

Defendant sent a letter to plaintiff dated July 18, 1988, denying its claim. Plaintiff then retained George A. Kennedy & Associates, an engineering firm, to examine plaintiff's premises. Kennedy determined that the damage to plaintiff's premises was the result of wind damage, and provided a report of these findings to defendant. In light of this evidence, on September 15, 1988, plaintiff sent a letter requesting that defendant reconsider its decision denying plaintiff's claim. On December 20, 1988, defendant denied plaintiff's claim a second time.

On December 1, 1989, plaintiff filed a complaint against defendant for breach of contract. Defendant filed a motion to dismiss the complaint pursuant to section 2-619(a)(5) of the Code of Civil Procedure. (Ill.Rev.Stat.1987, ch. 110 par. 2-619(a)(5).) Defendant asserted that under the limitation clause of the policy, plaintiff was barred from bringing the suit. Plaintiff argued that defendant could not rely on the limitation clause because: (1) its denial of the claim was an "anticipatory repudiation" of the policy, and (2) defendant had a duty to inform plaintiff in writing of the suit limitation provision and the date the period expired. Plaintiff also argued that defendant initially indicated it would pay defendant's claim, that the denial of coverage was "gross and willful," and that the limitation clause was inconspicuous. The trial court granted defendant's motion to dismiss the complaint with prejudice.

Plaintiff then filed a motion to reconsider and for leave to amend its complaint. The amended complaint did not include additional facts other than those contained in the motion to dismiss. The court denied that motion.

Plaintiff argues on appeal that the trial court erred in granting defendant's motion to dismiss and denying its motion to amend the complaint. Specifically, plaintiff asserts that it attempted to amend its complaint to show bad faith, and that defendant should be estopped from asserting the limitations provision of the policy.

If the terms of an insurance policy are clear and unambiguous, the words of the policy will be given their plain meaning. (Giardino v. American Family Insurance, Co. (1987), 164 Ill.App.3d 389, 115 Ill.Dec. 501, 517 N.E.2d 1187.) The insured cannot blame the insurance company for its failure to read the policy to discover the requirements for bringing suit. It is not the duty of the insurer to inform the insured of his duties. (Schoonover v. American Family Insurance Co. (1991), 214 Ill.App.3d 33, 157 Ill.Dec. 794, 572 N.E.2d 1258.) Compliance with the contractual limitations provisions is a condition precedent to recovery under a policy of insurance. (McMahon v. Miller National Insurance Co. (1971), 131 Ill.App.2d 339, 341, 266 N.E.2d 714.) A breach of the one-year limitation provision precludes the insured's recovery under the policy and renders his suit subject to dismissal. Schoonover v. American Family Insurance Co. (1991), 214 Ill.App.3d 33, 157 Ill.Dec. 794, 572 N.E.2d 1258.

Here, plaintiff did not file suit until December 1, 1989, eight months after the limitation period had lapsed, and almost one-year after the claim was denied a second time. Defendant moved for dismissal of plaintiff's complaint under section 2-619(a)(5), asserting that plaintiff's claim was barred by its failure to bring suit within the applicable limitations period. The policy that plaintiff had with defendant specifically stated that:

"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 shall be commenced within twelve (12) months next after 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 this policy is issued such limitation is invalid, then any such claims shall be void unless such action, suit or proceeding be commenced within the shortest limit of time permitted by the laws of the State."

The decision to grant a motion to dismiss is in the sound discretion of the trial court. (Keller v. State Farm Insurance Company (1989), 180 Ill.App.3d 539, 546, 129 Ill.Dec. 510, 536 N.E.2d 194.) The court's decision will not be reversed on appeal absent an abuse of discretion. In this case, it is clear from the language in the policy that the condition precedent for recovery on any claim is that the claim must be filed within one-year of the occurrence. The record reveals that the occurrence for which plaintiff sought recovery occurred on April 6, 1988. Plaintiff...