Reed v. Commercial Ins. Co.

• Decision Date: 25 October 1967
• Citation: 248 Or. 152,432 P.2d 691
• Parties: Loy M. REED, doing business as Merchen & Reed Gravel Co., Appellant, v. COMMERCIAL INSURANCE COMPANY of Newark, New Jersey, a corp., Respondent, Security Bank, an Oregon banking corp., of Myrtle Point, Oregon, and Pape Bros., Inc., an Oregon corp., Defendants.
• Court: Oregon Supreme Court

Page 691

432 P.2d 691

248 Or. 152

Loy M. REED, doing business as Merchen & Reed Gravel Co., Appellant, v. COMMERCIAL INSURANCE COMPANY of Newark, New Jersey, a corp. Respondent Security Bank, an Oregon banking corp., of Myrtle Point Oregon, and Pape Bros., Inc., an Oregon corp., Defendants.

Supreme Court of Oregon, Department 2.

Argued and Submitted Oct. 9, 1967.

Decided Oct. 25, 1967.

Maurice V. Engelgau, Coquille, argued the cause and filed the brief for appellant.

Jack L. Hoffman, Portland, argued the cause for respondent. With him on the brief were Pendergrass, Spackman, Bullivant & Wright, Portland.

Before PERRY, C.J., and SLOAN, GOODWIN, HOLMAN and WOODRICH, JJ.

WOODRICH, Justice pro tem.

This is an action on an insurance contract covering plaintiff's tractor. The court tried the case without a jury and found for the defendant on the ground that plaintiff's action was not brought within the 12-month limitation provision of the insurance contract. Plaintiff on trial asserted, but did not plead, that defendant was estopped from relying on the limitation provision. The trial court found against the plaintiff on this contention and plaintiff assigns this ruling as error.

The insured tractor was damaged when it proceeded unattended into a log pond during the course of a dredging operation. The occurrence took place when plaintiff's policy was in effect, but the policy contained a limitation provision that 'No suit, action or proceeding for the recovery of any claim under this policy shall be sustainable in a court of law or equity, unless the same be commenced within twelve (12) months next after the discovery by the Assured of the occurrence which gives rise to the claim * * *.' Plaintiff was present on March 12, 1965, when the tractor submerged. He 'discovered the occurrence' on that date. Plaintiff did not file this action until July 19, 1966, more than the 12 specified months after the discovery of the occurrence.

In his amended complaint, plaintiff alleged that he performed all conditions upon his part to be performed Except as waived by defendant. Defendant pleaded the contract limitation in its affirmative defense. Plaintiff filed a reply generally denying the affirmative matter alleged in the answer, except plaintiff admitted the insurance contract as set out in defendant's answer. Plaintiff did not plead an estoppel either in his amended complaint or in his reply.

We have held that one seeking the benefit of an estoppel must plead the facts out of which an estoppel arises. Walker v. Fireman's Fund Ins. Co., 114 Or. 545, 234 P. 542 (1925); Haun v. Martin, 48 Or. 304, 86 P. 371 (1906).

Plaintiff could argue that he was misled in framing his pleadings by the use of the term 'waiver by estoppel' in the case of Kimball v. Horticultural Fire Relief of Oregon, 79 Or. 133, 154 P. 578 (1916). The Kimball case holds that where an amended complaint purports to allege 'waiver' of a 12-month contract limitation provision And also alleges facts from which an estoppel would arise, the trial court was justified in treating the issue of 'waiver by estoppel' as a fact question. The plaintiff in the instant case did not allege facts in his complaint or reply that would put defendant on notice concerning the claimed estoppel, so the instant case is distinguishable from the Kimball case. Notwithstanding that the court uses the term 'waiver by estoppel' in the Kimball case and other cases, (see e.g., Fagg v. Massachusetts B. & I. Co., 142 Or. 358, 19 P.2d 413 (1933)) we feel that the term 'waiver by estoppel' is confusing and tends to blur the useful distinction between 'waiver' and 'estoppel.' The 'waiver by estoppel' term in our previous cases has always been applied in estoppel situations and should be understood to refer to estoppel and not waiver.

Because the plaintiff has failed to allege any facts giving rise to an estoppel, the estoppel issue was not properly before the court. Abrahamson v. Brett, 143 Or. 14, 21 P.2d 229 (1933). The trial court correctly ruled that the action was barred by the 12-month limitation provision of the contract.

As mentioned earlier plaintiff in framing his pleadings may have been misled by the term 'waiver by estoppel' in our previous cases, which we now have clarified, so we prefer to rest our decision in the instant case on an additional ground.

Plaintiff was charged with the burden of proving that the damage to his tractor resulted from a peril covered in the policy. Jarvis et ux. v. Indemnity Ins. Co., of North America, 227 Or. 508, 363 P.2d 740 (1961). The tractor was insured against 'upset or overturn' among other perils. Plaintiff contends that the tractor 'upset' within the meaning of the policy.

The only evidence of the occurrence was offered by plaintiff. He was engaged in the sand and gravel and excavating business. On March 12, 1965, plaintiff was dredging the mud and bark from a log pond owned by a plywood manufacturing company. Plaintiff used the 22,000-pound tractor in question to anchor a block through which a light steel line was passed. The line in turn was fastened to the drag bucket and was the means whereby the bucket was returned after being emptied on the side of the pond opposite the tractor. The tractor was parked unattended on the top of the dike of the log pond in a direct line with the light cable. At this point, the top of the dike was about 10 or 12 feet across. The pond was about 9 or 10 feet deep and the dike was about 2 feet higher than the water level in the pond. The slope of the dike into the pond was about 45 degrees. Plaintiff was working on the opposite side of the pond from the tractor and looked up just as the smokestack on the top of the tractor disappeared beneath the water. The tractor was not visible in the muddy pond water after it was completely submerged and no one saw the descent of the tractor into the water. There was no direct evidence of the tractor's position after the descent. Plaintiff and his employe observed the stack on the top of the tractor as it was submerging. The tractor was pulled out of the pond on the side opposite...