228 A.3d 636
Vt.2020Background
- Homeowner held an insurer-issued homeowner’s policy with a “Suit Against Us” clause: actions must be started “within one year after the date of loss.” "Date of loss" is undefined in the policy.
- Homeowner reported water damage on January 18, 2010; insurer investigated and the parties disputed claim value over years.
- Insurer made a final payment on February 16, 2017 after multiple supplements; homeowner requested appraisal and, when insurer did not act, sued on February 12, 2018.
- Trial court found “date of loss” ambiguous and construed it against the insurer to mean the date of insurer’s last act (final payment), ruling the suit timely and granting homeowner partial summary judgment.
- Insurer obtained interlocutory review. Vermont Supreme Court reversed, holding “date of loss” unambiguously means the date of the covered occurrence, not the date of insurer breach.
- Because homeowner raised a colorable waiver/estoppel claim based on ongoing negotiations and regulatory notice requirements, the Supreme Court remanded for further proceedings on waiver and whether bad-faith claims are "on the policy."
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Meaning of “date of loss” in the one‑year suit clause | "Date of loss" is ambiguous and should be read against insurer to mean date insurer breached (e.g., final payment/denial) | Unambiguous: "date of loss" means the date of the occurrence giving rise to coverage | Court: Unambiguous — means date of the covered occurrence; reversed partial SJ for homeowner |
| Applicability of the contractual one‑year limit to bad‑faith claims | Bad‑faith accrual may occur at insurer breach; therefore limitation should not automatically bar such suits | Contractual limitation governs actions "on the policy"; some bad‑faith claims are effectively on the policy | Court: Use functional test (from Greene); limitations apply to bad‑faith claims that are essentially contract claims; applicability to be resolved on remand if needed |
| Waiver/estoppel based on ongoing negotiations and conduct | Insurer’s prolonged negotiations and failure to give regulatory notice amount to waiver/tolling of the contractual one‑year period | No waiver shown; contractual clause controls unless proven otherwise | Court: Homeowner made a colorable waiver/estoppel claim; remand for trial court to decide waiver/tolling facts |
| Effect of insurer’s failure to give regulatory notice under Fair Claims Practices | Regulatory notice requirement supports finding of waiver/tolling | Regulatory noncompliance alone does not automatically equal waiver | Court: Did not decide that regulatory violation alone equals waiver; noted regulation and remanded for factual determination |
Key Cases Cited
- Gilman v. Maine Fire Ins. Co., 830 A.2d 71 (2003) (enforced similar “within one year after the date of loss” policy limitation; plaintiffs untimely under any interpretation)
- Greene v. Stevens Gas Serv., 858 A.2d 238 (2004) (adopted functional test for when bad‑faith torts are "on the policy" and subject to policy limitations)
- Whitney v. Vermont Mut. Ins. Co., 135 A.3d 272 (2015) (ambiguities in insurance policies are resolved against insurer; plain‑meaning construction governs)
- Zuckerman v. Transamerica Ins. Co., 650 P.2d 441 (1982) (majority view that "date of loss" means date damage occurred, not date of claim denial)