576 F.Supp.3d 172
D. Vt.2021Background
- Plaintiff JLD Properties purchased a commercial insurance policy from Patriot that covered wind damage; a windstorm in Oct. 2017 damaged JLD's St. Albans building.
- Patriot sent adjuster Alex Hill in 2017, who concluded wind caused membrane roofing damage; Patriot initially acknowledged coverage and issued payments for temporary and full roof replacement.
- In Jan. 2020 JLD reported additional, allegedly latent, damage; Patriot hired a different investigator (Evans) and denied coverage for the newly asserted repairs.
- JLD sued (filed Sept. 9, 2020) seeking declaratory relief and alleging violations of the Vermont Consumer Fraud Act (VCFA); Patriot moved to dismiss the amended complaint.
- The Policy contains a two‑year suit‑limitation clause requiring actions be brought within two years after the date the direct physical loss occurred; JLD’s suit was filed more than two years after the 2017 event.
- The court evaluated (1) the VCFA claims, (2) whether the Policy (attached to the motion) may be considered, (3) whether the suit‑limitation clause is ambiguous or unenforceable, and (4) whether waiver/estoppel/equitable tolling rescue JLD’s claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Applicability and sufficiency of VCFA claim | VCFA applies and Patriot’s investigative errors and denial constitute unfair/deceptive practices under VCFA | VCFA does not reach a mere coverage dispute; VCFA inapplicability or, alternatively, JLD only alleges a coverage dispute | Dismissed: VCFA counts fail because they rest on a coverage dispute, which is insufficient to state a VCFA claim |
| Consideration of the insurance policy on 12(b)(6) | Court cannot judicially notice/consider a policy not attached to complaint without assurance it is the policy at issue | Policy is integral to the complaint and may be considered on a motion to dismiss | Court may consider the policy attached to Patriot's motion because JLD relied on it—policy is integral |
| Ambiguity / discovery rule for suit‑limitation clause | Clause is ambiguous because it does not address latent/discovered damage; discovery rule should apply | Clause unambiguously requires suit within two years after the date the direct physical loss occurred; no discovery exception | Clause is unambiguous and sets a determinable accrual date; discovery rule does not apply; claims time‑barred |
| Waiver / estoppel / equitable tolling | Patriot’s initial coverage confirmation and failure to assert the clause earlier estops or waives enforcement; tolling applies due to latent damage | No definite misrepresentation promising to extend coverage or to bar assertion of the clause; no active misleading or prevention of discovery | Dismissed: JLD fails to plausibly plead equitable estoppel, equitable tolling, or waiver as to the suit‑limitation provision |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (pleading standard: factual allegations must plausibly state a claim)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (plausibility pleading and "nudge" standard)
- Wilder v. Aetna Life & Cas. Ins. Co., 433 A.2d 309 (Vt. 1981) (holding selling an insurance policy is not a contract for goods or services under earlier VCFA interpretation)
- Brillman v. New England Guar. Ins. Co., 228 A.3d 636 (Vt. 2020) (upholding enforceability of contractual suit‑limitation clauses when reasonable and clear)
- Ellul v. Congregation of Christian Bros., 774 F.3d 791 (2d Cir. 2014) (equitable estoppel elements and when statute‑of‑limitations defenses may be decided on Rule 12(b)(6))
- Pike v. Chuck's Willoughby Pub., Inc., 904 A.2d 1133 (Vt. 2006) (discovery rule applies only when limitations period does not set a determinable accrual event)