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Brockway v. Allstate Property And Casualty Insurance Co.

Court of Appeals of Oregon

March 1, 2017

Jack BROCKWAY and Carolyn Brockway, Oregon residents, Plaintiffs-Appellants,
v.
ALLSTATE PROPERTY AND CASUALTY INSURANCE COMPANY, an Illinois company, Defendant-Respondent.

          Argued and Submitted August 4, 2015

         Clackamas County Circuit Court CV12090074; Henry C. Breithaupt, Judge pro tempore.

          Robert C. Muth argued the cause for appellants. With him on the briefs was Kilmer, Voorhees & Laurick, P. C.

          Ryan J. Hall argued the cause for respondent. With him on the brief was Cole Wathen Leid Hall, P. C.

          Before Sercombe, Presiding Judge, and Hadlock, Chief Judge, and Tookey, Judge. [*]

         Case Summary: This case involves an insurance dispute between plaintiffs and defendant, Allstate Property and Casualty Insurance Company (Allstate). After a theft at their home, plaintiffs fled claims with Allstate, their insurance carrier. More than two years after the loss, Allstate denied coverage and plaintiffs brought an action relating to that denial seeking, among other things, damages for breach of contract and for breach of the implied covenant of good faith and fair dealing. Allstate moved for summary judgment and, after a hearing, the trial court granted summary judgment based on a two-year suit-limitation provision contained in the insurance contracts. On appeal, plaintiffs assert that the court erred in granting the motion in light of evidence supporting their position that Allstate should be estopped from invoking the suit-limitation provision. They further argue that, in any event, the court erred in granting their claim for breach of the implied covenant of good faith and fair dealing because a different suit-limitation provision in the contracts governs that claim.

         Held: On the facts in the summary judgment record, viewed in the light most favorable to plaintiffs, no objectively reasonable factfnder could conclude that Allstate should be estopped from raising the suit-limitation provision as a defense in this case. Furthermore, none of Allstate's conduct in this case contravened plaintiffs' reasonable expectations based on the terms of the insurance contracts. Accordingly, regardless of which suit-limitation provision in the contracts applies, the trial court did not err in granting summary judgment as to plaintiffs' claim for breach of the implied duty of good faith and fair dealing.

         Affirmed.

          SERCOMBE, P. J.

         This case involves an insurance dispute between plaintiffs and defendant, Allstate Property and Casualty Insurance Company (Allstate). After a theft at their home, plaintiffs filed claims with Allstate, their insurance carrier, under two policies. More than two years after the loss, Allstate denied coverage for the loss and plaintiffs brought an action against Allstate relating to that denial seeking, among other things, damages for breach of contract and for breach of the implied covenant of good faith and fair dealing. Allstate moved for summary judgment, arguing that the action was untimely in light of a two-year suit-limitation provision contained in the insurance contracts. The trial court agreed and granted the motion. Plaintiffs appeal the resulting general judgment in favor of Allstate, raising two assignments of error. In their first assignment, plaintiffs contend that the court erred in granting the motion "in light of *** evidence supporting [plaintiffs']" position that Allstate should be estopped from invoking the suit-limitation provision. In their second assignment of error, plaintiffs argue that, in any event, the court erred in granting summary judgment on their claim for breach of the implied covenant of good faith and fair dealing because that claim "did not come into existence until Allstate issued its denial letter, " and the action was filed within two years of that denial. As explained below, we affirm.

         Because the trial court granted a defense motion for summary judgment, we state the facts in the light most favorable to plaintiffs. Shell v. Schollander Companies, Inc., 358 Or 552, 554 n 1, 369 P.3d 1101 (2016).

         On September 6, 2009, plaintiffs discovered that a hole had been cut in their fence, and that property had been stolen from their backyard. They reported the theft to the police and, on September 8, 2009, called their Allstate agent to inform him of the theft. After their initial contact with the Allstate agent, plaintiffs discovered that additional property was missing (some from their boat and some from their travel trailer) and, in the summer of 2010, they talked with their Allstate agent about the additional missing items. On September 10, 2010, plaintiffs participated in a telephone conference with an Allstate investigator regarding the items they claimed had been stolen during the theft incident. During that telephone call, the investigator did not mention the "contractual provision in the insurance policies which required [them] to file a lawsuit or any other claim arising from this loss within two years from the date of the loss itself."

         On September 17, 2010, Allstate sent a letter to plaintiffs regarding its investigation of their claims. The letter informed plaintiffs that they were required to provide Allstate with a sworn statement of proof of loss, and to include "documentation that supports the ownership and value of any stolen items claimed." (Boldface omitted.) Allstate also informed plaintiffs that the "statute of limitations on this claim expires 2 years from the date of loss, " insisted on "complete compliance with all of the terms of the [insurance] policy and the laws of Oregon, " reserved all of its rights and defenses in conjunction with the policy, and stated that "[n]o waiver or estoppel of any kind is intended, nor may any be inferred." Thereafter, Allstate sent plaintiffs a number of letters seeking additional documentation or information and stating that it was continuing to investigate the claimed loss. In September 2011, Allstate requested that plaintiffs participate in examinations under oath. It conducted those examinations in October 2011. After those examinations, Allstate again sought additional information and documents and continued to investigate the loss until February 2012. In many, but not all, of its letters to plaintiffs, Allstate repeated its admonishment that it insisted on compliance with all policy terms, reserved its rights and defenses, and that no waiver or estoppel of any kind was intended or should be inferred. In February 2012, Allstate denied plaintiffs' claims based on its determination that plaintiffs had misrepresented material facts and failed to cooperate with the investigation. Allstate also pointed out that "Section I-Conditions" of plaintiffs' insurance policies provide:

"No one may bring an action against us in any way related to the existence or amount of coverage or the amount of loss for which coverage is sought, under a coverage to which Section I-Conditions applies, unless:
"(a) there has been full compliance with all policy terms; and
"(b) the action is commenced within two years after the date of the loss."[1]

         (Emphasis added; boldface omitted.)

         Plaintiffs commenced this action against Allstate on September 5, 2012. In its answer, Allstate raised as an affirmative defense the suit-limitation provision of the insurance policies. Allstate later sought summary judgment, asserting that plaintiffs' case should be dismissed in light of the suit-limitation provision because it was filed approximately three years after the loss and was, therefore, precluded as a matter of law. Plaintiffs responded that there were ...


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