Thomas v. United Fire and Cas. Co.

• Decision Date: 20 July 1988
• Docket Number: No. 87-850,87-850
• Citation: 426 N.W.2d 396
• Parties: Charles A. THOMAS and Leesanne S. Thomas, Appellants, v. UNITED FIRE AND CASUALTY COMPANY, Appellee.
• Court: Iowa Supreme Court

Page 396

426 N.W.2d 396

Charles A. THOMAS and Leesanne S. Thomas, Appellants, v. UNITED FIRE AND CASUALTY COMPANY, Appellee.

No. 87-850.

Supreme Court of Iowa.

July 20, 1988.

C. Joseph Coleman, Jr., and William G. Enke of Mitchell, Coleman, Perkins & Enke, P.C., Ft. Dodge, for appellants.

James L. Kramer and Michael D. Love of Johnson, Erb, Latham, Gibb & Carlson, P.C., Ft. Dodge, for appellee.

Considered by McGIVERIN, C.J., and HARRIS, LARSON, LAVORATO, and ANDREASEN, JJ.

HARRIS, Justice.

An Iowa statute allows fire insurance policies to require that suits for fire losses be brought within twelve months of the loss. The trial court rejected this equal protection challenge to the statute and so do we.

Iowa Code section 515.138 (1985) lists various permissible standard provisions for fire policies, including the one challenged here:

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.

This provision was incorporated into a policy which plaintiffs purchased from defendant insurer on April 8, 1985. The following day, April 9, 1985, and again on June 3, 1985, the insured property was damaged by fire. Claims for the losses were filed on those same dates.

On September 23, 1985, the insurer wrote to the plaintiffs, claiming fraud and denying coverage under the policy. The letter did not mention, nor were plaintiffs otherwise formally notified of, the twelve-month limitation for filing suit. The letter did however reserve all rights and defenses under the policy and declined to waive compliance with all terms and conditions of the policy. Although six of the twelve months then remained, suit was not commenced until December 8, 1986, long after the twelve-month period expired.

The plaintiffs filed a motion for adjudication of law points, requesting an order finding the one-year limitation provision unconstitutional and invalid. The defendant resisted this motion and filed a motion for summary judgment based on the plaintiffs' failure to bring their action within twelve months after the loss.

The trial court overruled plaintiffs' motion and sustained the insurer's. On plaintiffs' appeal, our review is for correction of errors of law. Iowa R.App.P. 4.

I. The plaintiffs contend section 515.138 denies them equal protection of the laws in violation of the fourteenth amendment of the United States Constitution and article I, section 6 of the Iowa Constitution by treating insureds under fire insurance policies differently from insureds under accident, health, life and uninsurance policies.

The law does not prohibit private agreements which vary general statutes of limitations. ¹ Ryan v. Phoenix Ins. Co. 204 Iowa 655, 659-60, 215 N.W. 749, 751 (1927). We long ago applied this principle to allow a shortened limitation provided in a fire insurance policy. Stout v. The City Fire Ins. Co. of New Haven, 12 Iowa 371 (1861). The Stout policy, like the one here, required the suit be commenced within twelve months of the loss. We upheld the twelve-month limitation notwithstanding a longer limitation period provided by statute. Id. at 385-86. We have consistently followed Stout ever since. See Jerrel v. Hartford Fire Ins. Co., 251 Iowa 816, 824, 103 N.W.2d 83, 88 (1960). Our holdings have been in accordance with the prevailing view. 44 Am.Jur.2d Insurance § 1879, at 878 (1982); 46 C.J.S. Insurance § 1256, at 271 (1946).

II. In their equal protection challenge plaintiffs rely on Miller v. Boone County Hospital, 394 N.W.2d 776 (Iowa 1986), where we considered an equal protection challenge to an Iowa statute which required a tort plaintiff suing a local government to commence action within six months after injury (or give notice to the local government within sixty days after injury of an intention to bring suit). The statute thus created two classes: plaintiffs injured by local governments and plaintiffs injured by private tortfeasors (who had two years to bring a suit under Iowa Code section 614.1(2)). We found no rational basis for treating plaintiffs injured by local governments differently from plaintiffs injured by private tortfeasors. We said:

Failure to commence an action within six months unless a notice is given within sixty days arbitrarily bars victims of governmental torts while victims of private torts suffer no such bar. We conclude such arbitrary treatment violates the equal protection guarantees of our federal and state constitutions .... [R]ather than furthering a legitimate governmental interest, the statute has proved to be a trap for the unwary.

Id. at 780.

Miller could perhaps be distinguished from the present case on several counts. We rely on the obvious one that no real classification is undertaken under the statute challenged in this case. ² In an expanded sense most legislation could be said to amount to classification. But classification, as the term is used in implementing the equal protection clause, does not in this larger sense occur every time a legislature acts. We note and approve the following:

A statutory classification is not void as a denial of equal protection because it is not all encompassing or inclusive; there is no constitutional requirement that the legislation must reach every class to which it might be applied.

Classification is primarily for the legislature, which, generally, has a wide discretion in respect thereof, and as long as the classification does not permit one to exercise a privilege while refusing it to another of like qualifications, under like conditions and circumstances, it is unassailable on equal protection grounds.

16B C.J.S. Constitutional Law § 708, at 505-07 (1985) (footnotes omitted).

The equal protection clause does not assert itself against each and every distinction between the group of persons addressed by legislation and the rest of society. Classification does not occur when, within a general category of persons of sufficiently widespread dimensions, all members are treated the same.

We think the purchasers of fire insurance qualify as such a general category. Plaintiffs' equal protection challenge is rooted in their assumption that purchasers of all kinds of insurance are to be considered as one group. Under such a view it would amount to "classification" to treat all fire insurance purchasers differently from all purchasers of other kinds of insurance. We find no basis for such a view.

Fire insurance is a vast commercial field with problems and rules of its own. It has similarities with some...