Moran v. Phoenix Ins. Co.

• Decision Date: 26 June 1979
• Citation: 390 N.E.2d 1139,7 Mass.App.Ct. 822
• Court: Appeals Court of Massachusetts
• Parties: Austin J. MORAN et al. 1 v. PHOENIX INSURANCE COMPANY.

Page 1139

390 N.E.2d 1139

7 Mass.App.Ct. 822

Austin J. MORAN et al. ¹ v. PHOENIX INSURANCE COMPANY.

Appeals Court of Massachusetts, Suffolk.

Argued April 17, 1979.

Decided June 26, 1979.

Robert S. Wolfe, Boston, for plaintiffs.

Brian R. Merrick, Boston, for defendant.

Before BROWN, PERRETTA and KASS, JJ.

KASS, Justice.

Companies which issue fire insurance policies in Massachusetts must conform to a text prescribed in G.L. c. 175, § 99, Twelfth, as appearing in St.1951, c. 478, § 1. That text includes a provision which says that if the parties fail "to agree as to The amount of the loss . . . the amount of such loss shall be referred" to arbitration and such reference "Unless waived by the parties, shall be a condition precedent to any right of action in law . . . " (emphasis supplied).

Summary judgment was entered below against the plaintiffs for failure to comply with this arbitration provision and the sole issue which the parties have argued on appeal is whether the defendant insurer waived that requirement by implication. We conclude that the available facts warranted a finding of such a waiver and reverse the judgment.

The facts, based on pleadings (including answers to interrogatories) and accompanying affidavits, are as follows: The defendant Phoenix Insurance Company (Phoenix) issued the policy sued upon to Carleton Realty Trust on October 15, 1966. That policy provided fire insurance on several buildings, including a horse barn, located on a farm in Southborough. The policy limit was $12,000. By an endorsement to the policy effective April 2, 1968, the plaintiffs, Moran, Anglin, Quinn, McCarthy, and Generazio, were substituted for Carleton Realty Trust as named insureds. Moran and his associates sold the farm to Robert and Paul Sriberg on August 29, 1969. ² At that time, Sriberg notified Phoenix of the change in ownership and that Moran and associates had become second mortgagees and, as such, were to remain as loss payees under the policy.

Five days later, on September 4, 1969, the barn burned to the ground. On or about September 9, 1969, Robert Sriberg gave Phoenix oral notice of the loss. We deduce that Phoenix received and acted upon that notice from a notice of loss form in its records (which Phoenix produced in response to a motion under Mass.R.Civ.P. 34, 365 Mass. 792, (1974), to produce documents) and from the fact that Phoenix sent an adjuster to the farm. The latter confined his investigation to the cause of the loss and the insurable interests of the claimants.

If Phoenix waived the arbitration requirement, it did so inferentially; the record offers no evidence of a written or oral waiver. Waiver or excuse of the condition precedent may be inferred from the conduct of the insurer or its agents, but the burden of proving such waiver or excuse falls on the party seeking to rely upon it. Lamson Consol. Store Serv. Co. v. Prudential Fire Ins. Co., 171 Mass. 433, 436, 50 N.E. 943 (1898). Molea v. Aetna Ins. Co., 326 Mass. 542, 547, 95 N.E.2d 749 (1950). Romanos v. Home Ins. Co., 355 Mass. 499, 502, 246 N.E.2d 173 (1969). 14 Couch on Insurance § 50.101 (2d ed. 1965) and 19 Couch on Insurance § 79.471 (2d ed. 1968). There were facts set forth in the affidavits in support of summary judgment and in the pleadings indicating that the sole basis of Phoenix's refusal to pay on the policy was denial of liability. At the same time the record is quite devoid of any suggestion that Phoenix disputed the amount of the loss. ³ Lamson Consol. Store Serv. Co. v. Prudential Fire Ins. Co., supra, 171 Mass., at 435-437, 50 N.E. 943. Fall River v. Aetna Ins. Co., 219 Mass. 454, 458, 107 N.E. 367 (1914). Alba v. Firemans' Fund Ins. Co., 295 Mass. 80, 84, 3 N.E.2d 36 (1936). In all the cases cited it was held that the concurrence of a denial of liability under the policy with the absence of any contest of the amount of loss left it open to a jury to find waiver of the reference to arbitration condition. Under the circumstances, i. e., where the parties' conduct raised issues of fact to be resolved by a trier of fact, it was error to allow a motion for summary judgment. Community Natl. Bank v. Dawes, 369 Mass. 550, 556, 340 N.E.2d 877 (1976). PERRY V. SCHLAIKJER, 5 MASS.APP. ---, 367 N.E.2D 863 (1977)^A.

Phoenix argues, however, the Lamson and its progeny are distinguishable because in those cases the claimant filed sworn written proofs of loss, whereas in the instant case the plaintiffs did not. In failing so to do the plaintiffs were faithful to the cheerful disregard which all parties to the controversy showed toward the norms of...