Stateman Ins. Co. v. Reibly

• Decision Date: 19 January 1978
• Docket Number: No. 2-876A312,2-876A312
• Citation: 175 Ind.App. 317,371 N.E.2d 414
• Parties: STATESMAN INSURANCE COMPANY, Appellant (Defendant below), v. Kenneth REIBLY, d/b/a Reibly Clothing Store, Appellee (Plaintiff below).
• Court: Indiana Appellate Court

Page 414

371 N.E.2d 414

175 Ind.App. 317

STATESMAN INSURANCE COMPANY, Appellant (Defendant below), v. Kenneth REIBLY, d/b/a Reibly Clothing Store, Appellee

(Plaintiff below).

No. 2-876A312.

Court of Appeals of Indiana, Second District.

Jan. 19, 1978.

Tom F. Hirschauer, George R. Wildman, Miller, Tolbert, Hirschauer & Wildman, Logansport, for appellant.

Richard M. Rhodes, Rhodes & Price, Peru, for appellee.

SULLIVAN, Presiding Judge.

On September 3, 1972, Kenneth Reibly's clothing business was damaged by fire. He contacted the agent (Birk) who had procured for him a fire insurance policy (issued by the Statesman Insurance Company) and was told not to worry, that he (Birk) would take care of it. Birk hired a contractor to repair the building and later gave Reibly a check for $2500, representing a $2000 advance to be paid the contractor and $500 for Reibly's expenses in moving his merchandise to another location. Birk told Reibly to prepare an inventory of the damaged goods for purposes of ascertaining the amount of loss sustained. At the insistence of Statesman's claims adjuster (Kachel), a total of three inventories, successively revised downward, were prepared, apparently because of the adjuster's belief that Statesman would pay only for those items which showed visible damage. About two or three weeks after the fire, Statesman offered to pay approximately $800 in full settlement of the claim, the loss being computed upon the last inventory submitted. Reibly refused. ¹

Apparently, negotiations continued and sometime in early December, 1972, Statesman (through Kachel) offered the sum of $7,400 in full settlement of the claim. ² On December 21, Reibly's then attorney, H. Frank Welke, wrote Kachel that the offer was accepted by his client. On December 26, Birk delivered a formal "Proof of Loss" form to Reibly and stated that it had to be signed, notarized and returned before any further payments could be made. The formal "Proof of Loss" form was never returned and, on March 22, 1973, Reibly received the following letter:

"March 22, 1973

Mr. Kenneth Reibly

110-112 South Broadway

Peru, Indiana

Dear Mr. Reibly:

This letter is relative to your fire loss of September 3, 1972 and the Proof of Loss for the forementioned fire left with you by Mr. Burke (sic) on December 26, 1972.

Your policy requires that a Proof of Loss be submitted within 60 days of the loss. Please consider this letter your formal notice that if Proof of Loss is not submitted to the company for their consideration by June 1, 1973 your claim will be denied for failure to comply with the policy provisions.

Very truly yours,

W. C. Kachel,

Manager"

Reibly testified that he thought his "Proof of Loss" was the inventory previously filed with Kachel and, therefore, he ignored the letter. He also disavowed the authority of his former attorney to accept the offer of settlement from Statesman. Reibly further testified that Birk told him that all damaged merchandise would have to be sold before there could be a settlement of the claim. Reibly stated that it took about one year to dispose of his inventory and that he informed Birk that the proceeds amounted to almost $2600. However, Reibly also testified that his last contact with Kachel was one month after the fire and that his last contact with Birk was about three months later. Birk corroborated this latter testimony. The record contains no indication that after Reibly informed Birk of the proceeds from liquidation (and there is no evidence as to when this occurred), he (Reibly) was in contact with any representative of Statesman until March, 1975, when this lawsuit was initiated.

Reibly's complaint asked $30,000 actual and $50,000 punitive damages. The trial court withdrew the punitive damages issue from the jury, which returned a verdict for Reibly in the amount of $10,400. Statesman has appealed, denying liability on several grounds.

We need not decide whether the 60 day period for filing of a "Proof of Loss", if waived by Statesman's conduct, representations or negotiations with regard to the inventories, was revived by the letter of March 22, 1973 because we deem the dispositive issue to be whether there is sufficient evidence of probative value from which the jury could infer a waiver of, or an estoppel to assert, the following provision of the policy between Reibly and Statesman:

"No suit or action on this policy for the recovery of any claim shall be sustainable in any court of law or equity unless all the requirements of this policy shall have been complied with, and unless commenced within twelve months next after inception of the loss."

It is undisputed that the lawsuit in question was not filed within "twelve months next after inception of the loss." However, Reibly contends that Statesman waived, or is estopped to assert the foregoing provision of the policy. Reibly argues that the $2500 advance for the contractor's work and his (Reibly's) moving expenses, coupled with Birk's statement that the damaged merchandise had to be sold before final settlement provides evidence from which the jury could infer that Statesman would not insist on compliance with the one-year limitation of actions provision.

It is well-settled that contractual provisions which limit the time within which suit may be brought, while not favored, are valid. Caywood v. Supreme Lodge (1908) 171 Ind. 410, 86 N.E. 482. However, such provisions may be waived or the insurer may embark upon a course of conduct which results in an estoppel to assert the provision as a defense. Continental Ins. Co. v. Thornburg (1967) 141 Ind.App. 554, 219 N.E.2d 450, 453. The question is ...