Opinion
Civil No. 04-596-AS.
July 12, 2004
FINDINGS AND RECOMMENDATION
Defendant Allstate Insurance Company ("Defendant") moves for summary judgment on the claim asserted against it by plaintiff Ronald S. Moers ("Plaintiff") on the ground that the limitations period for filing the claim expired. Plaintiff acknowledges that he filed his claim after the two-year limitations period but argues that the limitation should be tolled during the period of his disability and that Defendant should be estopped from asserting the statute of limitations based on its failure to advise Plaintiff of the limitations period.
Background
The facts relevant to Defendant's summary judgment are not in dispute. Plaintiff purchased a renter's insurance policy from Defendant for coverage of Plaintiff's property located at 942 S.W. 179th Street, Aloha, Oregon. Plaintiff claims that property was stolen out of these premises on October 16, 2001, which was during the effective period of the renter's policy. Subsequently, Plaintiff purchased a homeowner's insurance policy from Defendant for coverage of Plaintiff's property located at his new residence, 11290 S.W. Fairfield Street, Beaverton, Oregon. Plaintiff claims that property was stolen out of his new residence on December 18, 2001, which was during the effective period of the homeowner's policy. On January 2, 2002, Plaintiff moved to Southern California.
Plaintiff notified Defendant of each of the losses in a timely manner and gave recorded statements to Defendant on October 19, 2001, and April 23, 2002. In May 2002, Plaintiff retained legal counsel to assist him in the processing of the claims. Plaintiff then participated in an examination under oath on July 9, 2002, at the office of his legal counsel. From July 2002 to April 2003, Defendant requested and obtained from Plaintiff information regarding the claims, including information from Plaintiff's accountant, copies of appraisals of damaged property, a claim history from Plaintiff's other insurance carriers and information from Plaintiff's credit card companies. During this period, Defendant also attempted to locate Marie Moers, Plaintiff's grandmother, and Rex Osborn, for examinations under oath. Plaintiff was not able to provide an address or any contact information for either of these individuals.
In late January 2003, Plaintiff suffered a severe stroke and heart attack and was hospitalized until late February 2003. At the time of his release from the hospital, Plaintiff was required to use a wheelchair.
On March 11, 2003, Plaintiff's legal counsel asked Defendant to issue a decision on Plaintiff's claims. About this time, Plaintiff personally filed a complaint with Oregon's Department of Consumer and Business Services asserting that Defendant was not appropriately or timely handing his claim. On May 20, 2003, Plaintiff's counsel forwarded a letter to Defendant demanding payment of the claim or an advance of funds. On June 17, 2003, Defendant advised Plaintiff by certified letter, return receipt requested, that it had decided to deny his claims based on misrepresentation or concealment of relevant facts, as well as failure to cooperate. The letter specifically provided that Defendant reserved "the right to rely on the contractual suit limitation provision and O.R.S. 742.240. The letter was addressed to Plaintiff at his Beaverton, Oregon, residence and to his legal counsel in Portland, Oregon.
Starting in June 2003, Plaintiff was in and out of his wheelchair and in rehabilitation until 2004. He currently uses a leg brace and a cane. He continues to suffer from memory loss, dizziness and fainting spells.
Plaintiff filed this action in state court on April 13, 2004, and Defendant removed it to this court on April 30, 2004.
Legal Standard
Rule 56 of the Federal Rules of Civil Procedure allows the granting of summary judgment:
if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.
Fed.R.Civ.P. 56(c). "[T]he requirement is that there be nogenuine issue of material fact." Anthes v. Transworld Systems, Inc., 765 F. Supp. 162, 165 (Del. 1991) (citingAnderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986)) (emphasis in original).
The movant has the initial burden of establishing that no genuine issue of material fact exists or that a material fact essential to the nonmovant's claim is absent. Celotex v. Catrett, 477 U.S. 317, 322-24 (1986). Once the movant has met its burden, the onus is on the nonmovant to establish that there is a genuine issue of material fact. Id. at 324. In order to meet this burden, the nonmovant "may not rest upon the mere allegations or denials of [its] pleadings," but must instead "set forth specific facts showing that there is a genuine issue for trial." Fed.R.Civ.P. 56(e); see Celotex, 477 U.S. at 324.
An issue of fact is material if, under the substantive law of the case, resolution of the factual dispute could affect the outcome of the case. Anderson, 477 U.S. at 248. Factual disputes are genuine if they "properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party." Id. at 250. On the other hand, if after the court has drawn all reasonable inferences in favor of the nonmoving party, "the evidence is merely colorable, or is not significantly probative, summary judgment may be granted." Id. at 249-50 (citations omitted).
Discussion
The parties agree that this case is governed by the contractual two-year limitation set forth in O.R.S. 742.240. Plaintiff's losses occurred in October 2001 and December 2001. However, Plaintiff did not filed this action until March, 2004, well after the two-year limitations period had expired.
O.R.S. 742.240 provides "A fire insurance policy shall contain a provision as follows: `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 24 months next after inception of the lose.'"
Plaintiff argues that Defendant should be estopped from asserting the contractual limitation period because it failed to comply with the provision of O.A.R. 836-080-0235. The regulation provides that:
If an insurer continues negotiations for settlement of a claim directly with a claimant who is neither an attorney nor represented by an attorney until the claimant's rights may be affected by a statute of limitations or policy time limit, the insurer shall give the claimant written notice that the time limit may be expiring and may affect the claimant's rights. The notice shall be given to first party claimants not less that 30 days before, and to third party claimants, not less that 60 days before, the date on with the insurer believes the time limit may expire.
The court finds that this regulation does not apply in this instance for the reasons stated below.
First, the regulation requires that the claimant represent himself and not be represented by counsel. Here, Plaintiff retained counsel in May 2002 to represent with regard to his claims. Plaintiff's counsel corresponded with Defendant on Plaintiff's behalf four times in April 2003 and once in late May 2003, less than a month before Defendant issued its decision to deny Plaintiff's claim. Defendant forwarded the letter denying Plaintiff's claim to Plaintiff's counsel, as well as directly to Plaintiff. It is clear that Defendant believed, and had reason to believe, that Plaintiff was represented by counsel as to the date his claim was denied.
Second, the regulation requires that settlement negotiations must continue "until the claimant's rights may be affected by a statute of limitations." The date upon which a claimant's rights may be affected is not specifically defined by the regulation. However, the requirement that a first party claimant be notified not less than 30 days before the insurer believes the time limit may expire gives some guidance. Defendants last known contact with Plaintiff occurred on June 17, 2003, over four months before the limitations period expired on his first claim. Four months is a reasonable period within which to file a claim on an insurance policy. Accordingly, the court finds that Plaintiff's rights were not affected by Defendant's failure to act on Plaintiff's claim sooner.
Finally, the denial letter forwarded to Plaintiff on June 17, 2003, specifically referenced the contractual limitations provision and advised Plaintiff that Defendant retained the right to rely on that limitations period. This information put Plaintiff on notice that a limitations period existed and where that limitations period could be found.
Plaintiff also argues that Defendant is estopped from relying on the limitations period based on Plaintiff's period of disability and Defendant's failure to notify Plaintiff of the limitations period. The Oregon appellate court has held that O.R.S. 742.240 is a contract condition, rather than a statute of limitations. Herman v. Valley Insurance Co., 145 Or.App. 124, 130 (1996). In the same case, the court recognized that "[u]nder the proper circumstances, an insurer may be estopped from asserting a suit limitation provision as a defense to liability on an insurance policy * * *." Id. at 133.
"To invoke the doctrine of estoppel, the * * * insurance company must have done something that amounted to an affirmative inducement that would cause plaintiff to delay bringing his action." Lyden v. Goldberg, 260 Or. 301, 304 (1971). The elements of estoppel are: (1) a false representation; (2) made with the knowledge of the facts; (3) when the other party was ignorant of the of the truth; (3) with the intention that it should be acted upon by the other party; (5) which induces the other party to act upon it. Id. There must be a justifiable and reasonable reliance by the party seeking to invoke estoppel.Herman, 145 Or. App. at 134.
Here, there is no allegation of a misrepresentation. However, Plaintiff asserts that under the circumstances, Defendant had a duty to inform him of the specific date the limitations period would expire. Plaintiff appears to argue that his January 2003 stroke and resulting infirmity placed an increased burden on Defendant to provide Plaintiff with specific information and warnings. The record establishes in the months following his stroke, Plaintiff, aided by his legal counsel, was able to correspond with Defendant and respond to Defendants discovery request. In addition, Plaintiff, acting alone, was able to file a complaint with the Department of Consumer and Business Services regarding Defendant's investigation of his claims. By the time the rejection letter was forwarded to Plaintiff, almost four months had passed since Plaintiff's hospitalization and Plaintiff was in rehabilitation. Based on the record, it appears that Plaintiff was physically and mentally capable of protecting his rights between the date of the rejection letter and the date the limitations period expired.
This court and the Oregon state courts have held that an insurance company must engage in conduct that affirmatively induces the claimant to delay bringing his action to justify the imposition of the equitable doctrine of estoppel. Prosser v. Safeco Insurance Co., CV No. 00-1512-BR (D.Or. filed June 18, 2001); Factory Mutual Insurance Co. v. Northwest Aluminum Co., CV No. 02-198 (D.Or. filed January 22, 2003); Herman, supra;Lyden, supra. An insurance company is not obligated to remind a claimant of the limitation period applicable to their policy.Prosser, supra.
Defendant investigated Plaintiff's claim and advised him and his legal counsel of its decision to deny the claim four months before the limitations period expired. In that letter, Defendant advised Plaintiff of the existence of a limitations period and its intent to enforce it. No reasonable jury could conclude that Defendant's actions induced Plaintiff to refrain from filing this action until well after the limitations period expired. Plaintiff's lawsuit is not timely and Defendant is entitled to summary judgment.
Conclusion
Defendant's motion (#6) for summary judgment should be GRANTED.
Scheduling Order
The above Findings and Recommendation will be referred to a United States District Judge for review. Objections, if any, are due July 27, 2004. If no objections are filed, review of the Findings and Recommendation will go under advisement on that date. If objections are filed, a response to the objections is due fourteen days after the date the objections are filed and the review of the Findings and Recommendation will go under advisement on that date.