The "Date of Loss" in a Contractual Suit Limitation Provision, In a Homeowner's Policy, Runs From the Date of the Peril Insured Against
August, 2006
The New York Supreme Court, Appellate Division, Fourth Department, held that “date of loss” from which a homeowners’ property insurance policy’s two-year contractual suit limitation provision period ran was the date of the catastrophe insured against, not the accrual date of the insureds’ cause of action against the property insurer. Klawiter v. CGU/OneBeacon Ins. Group, 27 A.D.3d 1155 (4th Dep’t, Mar 17, 2006).
Plaintiffs commenced an action to recover under their homeowner’s property insurance policy for losses arising from damage to their personal property allegedly caused by mold at their residence. Defendant moved for summary judgment, seeking to dismiss the Complaint as time-barred, asserting that Plaintiffs failed to comply with the two year contractual suit limitation provision in the subject homeowner’s insurance policy. The Honorable Joseph D. Mintz, in the New York Supreme Court, Erie County, granted Defendant’s motion for summary judgment. Plaintiffs appealed the above-referenced Order. The Appellate Division, Fourth Department, unanimously affirmed the Order without costs.
On its motion for summary judgment, Defendant met its initial burden by establishing that Plaintiffs did not commence the action within two years of the “date of loss” as required by the contractual suit limitation period in the policy. Enright v. Nationwide Ins., 295 A.D.2d 980 (4th Dep’t 2002); Compis Servs. v. Hartford Steam Boiler Inspection & Ins. Co., 272 A.D.2d 886 (4th Dep’t 2000); see Gilbert Frank Corp. v. Federal Ins. Co., 70 N.Y.2d 966 (1988). The court noted that the insurer had no duty to advise Plaintiffs of the limitations period. A “carrier [is] not obligated to call plaintiff’s attention to the policy provisions.” Blitman Constr. Corp. v. Insurance Co. of N. Am., 66 N.Y.2d 820, 823 (1985); see Schunk v. New York Cent. Mut. Fire Ins. Co., 237 A.D.2d 913, 914 (4th Dep’t 1997); May v. Aetna Life & Cas. Co., 204 A.D.2d 1007 (4th Dep’t 1994).
In order for Plaintiffs to protect their rights under the policy, they should have commenced the action before the limitations period expired or obtained a waiver from Defendant of the two year contractual suit limitation provision in the policy. See Blitman Constr. Corp., supra at 822; Grumman Corp. v. Travelers Indem. Co., 288 A.D.2d 344, 345 (2d Dep’t 2001). Waiver is defined as the intentional relinquishment of a known right. See Gilbert Frank Corp., supra. at 968. Plaintiffs will need to establish a clear manifestation of intent by Defendant to relinquish the protection of the contractual limitation period. Id.; see Blitman Constr. Corp., supra. at 823. Otherwise, Plaintiffs may attempt to consider raising the defense of estoppel. In order to establish the applicability of estoppel, plaintiffs have to establish that defendants by their conduct, lulled plaintiffs into sleeping on their rights. See Gilbert Frank Corp., supra. at 968.
In the case at bar, Plaintiffs failed to raise a triable issue of fact in opposition to Defendant’s motion for summary judgment. The Court found no merit to Plaintiffs’ contention that the “date of loss” is the accrual date of their cause of action as against Defendant. The phrase “date of loss” is not ambiguous and had been held to refer to the date of the catastrophe insured against. Costello v. Allstate Ins. Co., 230 A.D.2d 763, 763 (2d Dep’t 1996); see Roberts v. New York Prop. Ins. Underwriting Assn., 253 A.D.2d 807 (2d Dep’t 1998).
Learning Point:
The “date of loss” from which a homeowners’ property insurance policy’s two year contractual suit limitation provision period runs is the date of the catastrophe insured against, not the accrual date of an insured’s cause of action against the property insurer. •
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