On December 25, 1965 the tank barge Bayou Queue stranded and partially sank *1329 in the Mississippi River south of Memphis, Tennessee. Shipowner 1 shortly thereafter notified the Underwriter 2 of the loss and successful salvage operations werе undertaken by Underwriter for which it paid out approximately $25,-000 in sue and labor expense. On August 2, 1968 Shipowner submitted formal proof of loss as required by the terms of the policy. In turn, Underwriter advised that the incident was still being investigated and that no decision had been made respecting payment of the claim. This suit was initiated on December 31, 1968, a little more than 3 years after the loss.
Underwriter’s defense was grounded primarily on the contention that recovery was barred by а policy provision requiring suits to “be commenced within twelve (12) months next after the time a cause of action for the claim accrued.” 3 The District Court granted Underwriter’s motion for summary judgment. Holding that the claim is not barred by the policy provision, we reverse and remand for the Trial Court’s consideration of whether the formal proof of loss wаs filed in a reasonable time in the light of equitable principles of laches and otherwise whether Underwriter suffered any harm from Shipowner’s failure earlier to have filed the triggering formal proof of loss.
Essentially, the issue presеnted is what event or events constituted the accrual of a cause of action within the meaning of the pоlicy terms. Underwriter invites us to construe some rather ambiguous language to mean that Shipowner’s cause of aсtion accrued on the date of loss. But the terms “loss” and “cause of action for the claim” are not neсessarily equivalent. Unlike similar policy provisions in which the contractual limitation explicitly runs from the happening of the event which constituted the casualty, 4 the present situation involves a limitation measured from the inceрtion of Underwriter’s legal liability to suit.
Since Shipowner could not have successfully initiated suit prior to its submission of proof of loss and expiration of the policy’s 30-day adjustment period, it had no “cause of action” in any comprehensible sense until these things had occurred. Clearly the one-year limitation must therefore be computed so as to have commenced 30 days after proof of loss was received by Underwriter. Aetna Casualty & Surety Co. v. Bell, 1 Cir., 1968,
Underwriter then urges that, apart from the contractual limitation, the suit is somehow barred by laches. But the mere passage of time — even, as here, a considerable amount of time — will not automatically perfect a claim for such an equitable bar. As we have frequently had occasion tо repeat, “laches is much more than time. It is time plus prejudicial harm, and the harm is not merely that one loses what he otherwise would have kept, but that delay has sub
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jected him to a disadvantage in asserting and establishing his claimed right оr defense.” Point Landing, Inc. v. Alabama Dry Dock & Shipbuilding Co., 5 Cir., 1958,
However, there is at least a hypothetical pоssibility that Underwriter might be able to show that an unreasonably late filing of the proof of loss, rather than a delay in filing suit, cаused it harm. Since the policy contained no express time limitation, the Trial Court must determine from an analysis of all the surrounding facts and circumstances whether the proof of loss as actually filed was filed within a reasonable time.
Of course, what is a reasonable time depends upon the situation in this record —a record revealing рositively that Underwriter knew of the loss, accepted serious sue and labor responsibilities and paid out large sums in the salvage. At no time did it even suggest the existence of any defense. And it has not yet even begun to whisper a suggestiоn of a possible defense which was lost by the delay in filing the formal paper. If in the light of these equitable considerations the Trial Court finds the actual filing was reasonable — i. e., not productive of harmful consequences — then thе inquiry ends there. If it was not, the Court must then go on to determine the latest date on which the proof reasonably should have been filed and, taking into account the 30-day adjustment period, whether the suit was thereafter initiated within the pоlicy’s one-year time limitation.
From the briefs and argument we think Underwriter already knew all it would learn from the formal proof of loss. But it should have an opportunity if it desires to prove genuine harm by showing that a defense to the merits was lost or prejudiced by Shipowner’s unreasonable delay. Delgado v. The Ma-lula, 5 Cir., 1961,
Reversed and remanded.
Notes
. A division of appellant American Marine Corporation.
. Citizens Casualty Company.
. “TIME FOR SUIT. It is a condition of this Policy that no suit, action in admiralty, or procеeding for the recovery of any claim under this Policy shall be sustainable in any court of law or equity unless the same be commenced within twelve (12) months next after the time a cause of action for the claim accrued. Providеd, however, that if by the laws of the State or jurisdiction within which this Policy was issued such limitation is invalid, then such action, suit, or proceeding for the recovery of such claim hereunder shall be commenced within the shortest limit of time permitted, by the laws of such State or jurisdiction, to be fixed herein.”
We accept the parties’ contentions that the interрretation of this provision is governed by Louisiana law.
. In Joe E. Freund, Inc., v. Insurance Company of North America, 5 Cir., 1967,