Suit Limitations Provision Applies Despite Appraisal Demand

By Don R. Sampen, published, Chicago Daily Law Bulletin, October 7, 2025

The U.S. District Court for the Northern District of Illinois recently held that a two-year suit limitations provision in a property insurance policy would apply despite the fact that a demand for appraisal was pending when the two-year period expired.

The case is F.O.A.N. Properties, LLC v. Owners Insurance Co., No. 23-cv-191, 2025 U.S. Dist. Lexis 175553 (N.D. Ill. Sept. 9). The insured’s assignee, F.O.A.N., was represented by Ekl, Williams & Provenzale LLC of Lisle. Owners was represented by Dinsmore & Shohl LLP of Chicago.

A hailstorm damaged a grocery store property in Skokie in 2020. Although ownership of the property changed hands after the damage, it was owned by F.O.A.N. at the time of the instant lawsuit. That entity also was the assignee of the property insurance policy issued by Owners that covered the property at the time of the loss.

Owners inspected the damage and initially estimated the loss at about $42,000 replacement cash value, for which it provided a check to the insured. F.O.A.N., however, hired a public adjuster to review the damage, and the PA issued Owners an estimate of about $192,000.

The PA also demanded an appraisal under the terms of the policy, in response to which Owners suggested postponing the appraisal until after it made a further inspection. The PA agreed. Owners subsequently issued a second check to the insured based on its revised estimate of $125,000.

The PA then again demanded an appraisal and sent Owners its revised estimate of $862,000. Owners at that point denied the appraisal due to the expiration of the suit limitations clause in the policy. That clause required that any lawsuit be brought against Owners within two years of the loss.

The PA’s second appraisal demand was made approximately two weeks after the two-year period expired, and F.O.A.N. did not file the instant lawsuit until about seven months later. Based again on the suit limitations clause, Owners filed a motion for judgment.

Analysis

In an opinion and order by Judge April M. Perry, the court granted the motion. She initially addressed Owners’ argument that F.O.A.N. was not an assignee of the Owners’ policy and therefore not a proper plaintiff. She rejected that argument based on her finding of an oral assignment of the policy by the prior owner of the property.

She then turned to applicability of the suit limitations clause. F.O.A.N. acknowledged the suit was filed after the two-year period, but argued that the doctrines of waiver and estoppel barred Owners from enforcing the clause. It further contended that F.O.A.N. was prohibited from filing suit until an appraisal had been completed.

As to waiver and estoppel, F.O.A.N. relied on the email communication from Owners suggesting that the appraisal be postponed until after a further inspection by Owners. F.O.A.N. argued that the email gave F.O.A.N. a false sense of security that Owners would not be invoking the suit limitations clause.

Perry disagreed. She found that Owners’ communication was nothing more than the normal back and forth of the insurance claim process and could not be construed as an indication of a likely settlement or that Owners would not assert the limitations deadline. Further, she wrote that Owners could not be accused of unduly delaying the process because Owners issued its second check within two weeks of its re-inspection and before the time to file suit elapsed.

In addition, for estoppel purposes, Perry said F.O.A.N. did not rely on Owners’ email when deciding when to bring suit. Instead F.O.A.N. relied on the mistaken belief of the PA that F.O.A.N. need not worry about the suit limitations deadline because the PA had sent a demand for appraisal prior to expiration of the deadline.

Perry also found that nothing in the policy itself provided for a tolling of the deadline based on a request for appraisal, and a case relied on by F.O.A.N. provided it no support. That case, Norman v. The Standard Fire Insurance Co., No. 22 CV 2199, 2023 U.S. Dist. Lexis 165387 (C.D. Ill. May 15, 2023), held only that a party may seek to compel appraisal after suit is filed. It did not hold that a plaintiff could not file suit where a contract provided for an appraisal.

The court therefore concluded that F.O.A.N.’s lawsuit for breach of contract was untimely, and it granted summary judgment in favor of Owners.

Key Point

Absent policy language otherwise, a demand for appraisal pursuant to the terms of a property insurance policy does not toll the policy’s lawsuit limitation period.