Goldsmith v. Reliance Ins. Co.

• Decision Date: 30 June 1967
• Citation: 353 Mass. 99,228 N.E.2d 704
• Parties: Irving L. GOLDSMITH et al. v. RELIANCE INSURANCE COMPANY et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 704

228 N.E.2d 704

353 Mass. 99

Irving L. GOLDSMITH et al. v. RELIANCE INSURANCE COMPANY et al.

Supreme Judicial Court of Massachusetts, Hampden.

Argued May 3, 1967.

Decided June 30, 1967.

Joseph J. Hurley, Boston (George F. Hurley, Boston, with him) for defendants.

Lloyd S. Bardach, Springfield (Jerome S. Gold, Springfield, with him) for plaintiffs.

Before WILKINS, C.J., and SPALDING, KIRK, SPIEGEL and REARDON, JJ.

SPALDING, Justice.

This is an action in which the plaintiffs seek to recover on eight policies of fire insurance issued by the defendants. The case was referred to an auditor whose findings of fact were to be final.

The auditor found the following facts. The plaintiffs, Irving L. Goldsmith and Philip R. Corbert, copartners doing business under the name of The Mill Outlet, conducted a retail clothing store in Holyoke. On April 7, 1961, a fire occurred at the store. At that time the stock, fixtures and improvements were insured in the amount of $46,000 under eight policies of insurance issued by the seven defendant insurance companies. The policies were in accordance with the Massachusetts standard form, as prescribed by G.L. c. 175, § 99. On April 8 or 9, 1961, the plaintifs retained the services of a licensed adjuster to represent them. On April 14 the plaintiffs' adjuster and one representing the defendants agreed upon the value and loss which they set forth in a memorandum which each signed. The amount of the loss agreed upon was $51,772.87. The memorandum stated that it was not to constitute an admission of liability and was 'without prejudice to any defenses and subject to all * * * the terms and conditions of the polices.' On July 19, 1961, the defendants' adjuster received eight proofs of loss, duly sworn to, directed to the various defendants. These proofs were forwarded to the defendants' adjuster by the plaintiffs' adjuster, who had received no prepared forms from the defendants or their agents. 'The defendants did not notify the plaintiffs that they denied liability nor did they inform the plaintiffs that they assumed liability. The defendants did not waive any of the provisions of the insurance policies * * *.'

The auditor found that the loss was $51,772.87, the amount agreed upon by the adjusters. He also found that the plaintiffs commenced their action on July 26, 1963, which was two years and one hundred ten days after the fire loss occurred.

The plaintiffs and the defendants presented motions for judgment on the auditor's report. The plaintiffs' motion was allowed and the defendants' motion was denied. The defendants appealed.

The defendants' motion was based upon the following provision which was contained in each of the policies: 'No suit or action against this company for the recovery of any claim by virtue of this policy shall be sustained in any court of law or equity in this commonwealth unless commenced within two years from the time the loss occurred. * * *' This provision is prescribed by G.L. c. 175, § 99, as part of the standard form for fire insurance polices. The defendants contend that since this action was brought more than two years after the fire loss occurred, it is barred by the foregoing limitation.

There is another provision of G.L. c. 175 (the insurance chapter) which must be considered. Section 22 provides in material part: 'No company * * * shall make * * * any policy of insurance * * * containing any condition, stipulation or agreement ** * limiting the time for commencing actions against it to a period of less than two years from the time when the cause of action accrues * * *. Any such condition, stipulation or agreement shall be void.' Under the terms of the standard fire insurance policy, the defendants were required either to pay the amount for which they were liable or replace the property within sixty days from the time the plaintiffs submitted their proofs. The proofs having been submitted on July 19, 1961, the defendants were not in default under the policies, if at all, until September 18, 1961, at which time the plaintiffs'...