Lead Opinion
OPINION OF THE COURT
This action arises out of an automobile accident which occurred on February 5, 1970. The action was not commenced until April 18, 1973, more than three years later. The complaint contains several negligence causes of action against the defendant Donald Van Natten and additional causes of action
Plaintiffs’ purpose in adding the causes of action for fraudulent misrepresentations is, of course, to avoid the three-year negligence Statute of Limitations (CPLR 214). Where failure to commence an action before the expiration of the negligence Statute of Limitations is due to fraud practiced upon the plaintiff, a cause of action will lie for the loss sustained in consequence thereof (35 NY Jur, Limitations and Laches, § 12; cf. Brick v Cohn-Hall-Marx Co.,
Defendants contend that there are no triable issues of fact raised by the misrepresentation causes of action. After examining the pretrial depositions of the plaintiffs, we agree with the conclusion reached by Special Term that there are bona fide issues of fact concerning the alleged misrepresentations which resulted in plaintiffs’ failure to institute a timely action. We therefore affirm the denial of the defendants’ motion. Although Special Term in its decision states that "[i]t is not disputed by defendants that the insurer and its employees were agents for the insured defendant”, this is contested by the defendant insured in his brief. We conclude that the insurer and its agents were in fact agents of the defendant insured, and were at the least clothed with apparent authority to make settlement promises (Hover v Claverack Grange No. 934,
Furthermore, since the defendants raise the affirmative defense of the Statute of Limitations in their answer, the doctrine of equitable estoppel must also be considered by the trier of the facts. If the representations or conduct of the defendants misled the plaintiffs, even innocently, this is enough. "Under these circumstances, the doctrine of equitable estoppel will be applied to prevent defendant from gaining an unconscionable advantage if he were permitted to plead the
The order should be affirmed, with costs.
Dissenting Opinion
In the proper case a defendant guilty of wrongdoing may be denied the right to raise the Statute of Limitations (General Stencils v Chiappa,
Accepting the truth of plaintiffs’ allegations, there is no basis for concluding that defendants were guilty of any misrepresentation or concealment as those terms are used in the cases. According to plaintiffs, the agent of the defendant insurance company investigated the extent of plaintiffs’ damages. Records of expenditures were examined (April, 1970), plaintiffs’ automobile inspected (March, 1970), and plaintiff Barbara Dupuis submitted to a medical examination by the insurer’s doctor (Oct., 1970). At a meeting in the insurer’s office in May of 1971, the agent asked if plaintiffs wished to settle their claim. They declined because Mrs. Dupuis’ back still caused her pain and she was unsure what her total damages would be. In March, 1972 the agent phoned Mrs. Dupuis and asked if she wished to settle the claim, but she again declined. In June of 1972 she phoned him to request payment of her automobile repair bills, but the agent wished
There were no contacts between plaintiffs and any of the defendants from June, 1972 until after the running of the statute in February, 1973. Mrs. Dupuis admits there were no statements by any of the defendants concerning the existence vel non of a time limitation or the advisability of retaining legal counsel.
Since defendants made no misrepresentations nor concealed from plaintiffs the existence of their cause of action, defendants’ motion for summary judgment should be granted unless an estoppel may be imposed for failure by the defendants to disclose to the plaintiffs the three-year limitation or unless the mere engagement in settlement negotiations is the sort of misleading activity which may invoke an estoppel.
Absent some pre-exisiting fiduciary relationship (see Erbe v Lincoln Rochester Trust Co.,
Although there are some instances in which actions such as a settlement offer or a request by a prospective defendant to physically examine the plaintiff have been held to estop the defendant from raising the statute (see, e.g., Triple Cities Constr. Co. v Maryland Cas. Co.,
For example, in Robinson v City of New York (supra) claimant’s store was flooded on January 1, 1963 and he filed the notice of claim with the city within the prescribed 90 days (General Municipal Law, § 50-e). The city demanded, as was its right (see General Municipal Law, § 50-h), to examine the claimant, and noticed the examination for June 11, 1963. By
The stipulation postponing the examination was at the insistence of the city and included a promise by the claimant not to bring suit pending completion of the examination. Although the court held that this stipulation did not toll the running of the statute, it concluded that principles of equity precluded the city from raising the statute.
The case at bar is distinguishable from Robinson v City of New York (supra) on numerous grounds, but it is sufficient to note that here some nine months for instituting timely suit elapsed from the last contact between plaintiffs and defendants (the June, 1972 phone call in which plaintiffs refused to make a settlement demand) and that there was never any promise (much less agreement) by plaintiffs to refrain from suit.
In order for an estoppel to be imposed, the plaintiff’s reliance must be reasonable, and in the circumstances present in this case it was unreasonable as a matter of law for plaintiffs to delay commencement of suit nine months from the date of last contact with the defendants. In cases where settlement negotiations or investigations by an insurance carrier ceased a much shorter time than nine months before the running of the statute, the courts have uniformly refused (absent misrepresentation, fraud, or an agreement to withhold suit) to estop the defendant from raising the limitations defense (Fotochrome, Inc. v American Ins. Co.,
The order should be reversed and judgment entered for defendants dismissing the complaint.
Sweeney, Kane and Main, JJ., concur with Greenblott, J. P.; Mahoney, J., dissents and votes to reverse in an opinion.
Order affirmed, with costs.