Northern Petrochemical Co. v. US Fire Ins.

• Decision Date: 30 March 1979
• Docket Number: No. 48715.,48715.
• Citation: 277 NW 2d 408
• Parties: NORTHERN PETROCHEMICAL COMPANY, Respondent, v. UNITED STATES FIRE INSURANCE COMPANY, Defendant and Third Party Plaintiff, Appellant, and Traff & Associates, Third Party Defendant.
• Court: Minnesota Supreme Court

277 N.W.2d 408 (1979)

NORTHERN PETROCHEMICAL COMPANY, Respondent, v. UNITED STATES FIRE INSURANCE COMPANY, Defendant and Third Party Plaintiff, Appellant, and Traff & Associates, Third Party Defendant.

No. 48715.

Supreme Court of Minnesota.

March 30, 1979.

Michael J. Healey, St. Paul, for appellant.

Blethen, Gage, Krause, Blethen, Corcoran, Berkland & Peterson, Kelton Gage and Stephen P. Rolfsrud, Mankato, for respondent.

Heard before KELLY, YETKA, and WAHL, JJ., and considered and decided by the court en banc.

WAHL, Justice.

United States Fire Insurance Company (United States Fire) appeals from a judgment of the Blue Earth County District Court assessing damages caused by water to the building of its insured, Northern Petrochemical Company (Northern Petro). The jury found that United States Fire was estopped from asserting the statute limitations as a defense to the suit and that Northern Petro was not guilty of laches in asserting its claim. We affirm.

In 1967, plaintiff Northern Petro began construction of a manufacturing plant, warehouse, and office. In April 1968, Northern Petro realized that the walls of the new building were moving, causing substantial cracking in the plant floor, and that water was accumulating under the plant floor. Plaintiff repaired the damage and sued all parties involved in the construction except the general contractor's insurance company. The trial court entered an order for judgment on May 17, 1971, dismissing the claim for water damage against the City of Mankato, and ordered plaintiff's verdict reduced by $59,061.85, the amount of this damage.

On appeal we affirmed in part and remanded for a new trial on the issue of apportionment of damages. Northern Petrochemical Co. v. Thorsen & Thorshov, Inc., 297 Minn. 118, 211 N.W.2d 159 (1973). In that opinion we indicated that Northern Petro should proceed against the insurance company on the water damage claim. We denied the petition for rehearing on October 12, 1973. The parties settled the issue of apportionment of damages on July 18, 1974. On July 26, 1974, plaintiff's attorney contacted defendant United States Fire about the water damage claim and expressed concern about the statute of limitations. Defendant responded on August 14, 1974, requesting time to locate the file.

Plaintiff heard nothing further from defendant and brought this suit on October 10, 1974. Defendant contended that the statute of limitations, which had run in April 1974, barred the suit. The jury, by special verdict, found that (1) water was a direct cause of the damage to plaintiff's building; (2) latent defects, faulty materials, improper workmanship, or improper installation were also direct causes of the damage to plaintiff's building; (3) defendant waived the policy provision requiring commencement of suit within one year; (4) defendant was estopped from asserting the one-year provision; (5) defendant was estopped from asserting the statute of limitations; (6) defendant had not waived the statute of limitations; and (7) plaintiff was not guilty of laches in asserting its claim against defendant. On appeal defendant challenges only the jury's finding that United States Fire is estopped from asserting the statute of limitations as a defense and that Northern Petro is not guilty of laches.

1. We consider first whether defendant is estopped from asserting the statute of limitations as a defense to plaintiff's suit. Estoppel is an equitable doctrine addressed to the discretion of the court and is intended to prevent a party from taking unconscionable advantage of his own wrong by asserting his strict legal rights. To establish a claim of estoppel, plaintiff must prove that defendant made representations or inducements, upon which plaintiff reasonably relied, and that plaintiff will be harmed if the claim of estoppel is not allowed. See, Lundberg v. Northwestern National Bank, 299 Minn. 46, 216 N.W.2d 121 (1974); Pesina v. Juarez, 288 Minn. 379, 385, 181 N.W.2d 109, 113 (1970); Poksyla v. Sundholm, 259 Minn. 125, 106 N.W.2d 202 (1960).

Estoppel depends on the facts of each case and is ordinarily a fact question for the jury to decide. See, O'Donnell v. Continental Casualty Co., 263 Minn. 326, 331, 116 N.W.2d 680, 684 (1962). In reviewing a jury verdict the evidence and the inferences to be drawn from it must be viewed in the light most favorable to the jury's verdict. The jury's verdict will not be disturbed on appeal unless it is manifestly and palpably contrary to the evidence. See, Norberg v. Northwestern Hospital Ass'n Inc., 270 N.W.2d 271, 274 (Minn.1978).

The evidence in the instant case clearly supports the jury's finding of estoppel. Defendant was aware of the water damage and investigated the claim within a month of the reported loss. It never told plaintiff, or the general contractor, that anything more was necessary to file a claim. Mr. Carr, plaintiff's liaison with the architect and general contractor, testified that he assumed the claim would be paid and that the attorneys would file the claim. He testified that plaintiff received a copy of a letter from the architect to the general contractor dated July 3, 1968, which stated that the architect believed the water damage was covered by the insurance policy and that defendant should be notified. Mr. Carr took no action to do so because he believed the attorneys would make the claim. Plaintiff also received a letter from the general contractor to the architect dated September 5, 1968, which stated...