25 A.D.2d 860 | N.Y. App. Div. | 1966
Lead Opinion
In an action to recover upon four policies of insurance against loss of personal property, plaintiffs appeal from an order of the Supreme Court, Kings County, entered March 2, 1965, which (1) granted the motion of defendant Reliance Insurance Company (the insurer on one of the policies) for summary judgment and (2) denied as academic plaintiff’s cross motion to dismiss the defense contained in said defendant’s answer. Order affirmed, with $10 costs. Plaintiffs’ main contention, and the one adopted by the dissenting memorandum herein, is that defendant Reliance Insurance Company should be estopped from relying on the provision in its policy which requires that all suits, actions or proceedings for the recovery of any claim be brought within 12 months after discovery of the occurrence giving rise to the claim. We find no merit in this contention. The doctrine of estoppel is applied in certain cases to prevent inequitable reliance upon a defense, such as the Statue of Limitations, which might otherwise be a bar to recovery. The stimulus for its use is conduct by one person inconsistent with a position later adopted by him which is prejudicial to the rights of another who relied on such prior conduct to his detriment (cf. Lynn v. Lynn, 302 N. Y. 193). In the instant case plaintiffs discovered the loss of certain items covered by the policy on May 5, 1963. Fifteen days later, on May 20, plaintiff Imre J. Rosenthal met with defendants’ adjusters and supplied them with a detailed
Dissenting Opinion
dissents and votes to reverse the order, to deny the motion of defendant Reliance Insurance Company and to grant plaintiffs’ cross motion, with the following- memorandum: I am of the opinion that on the undisputed facts Reliance is estopped from raising the defense of plaintiffs’ failure to institute an action for their loss within the time limited by the policy. Plaintiffs discovered the loss on May 5, 1963. They immediately notified the police and their insurance broker, who in turn notified the underwriting agency representing Reliance on May 6, 1963. The latter’s adjusters met with the plaintiff husband and he furnished them with a detailed account of the events surrounding the loss and an itemized schedule of the missing property. On May 22,1963 the adjusters forwarded a statement to him incorporating the information which he had given them and asked him for a statement showing where and when each item had been purchased and the price paid. Negotiations followed. On April 14, 1964 the additional information requested by the adjusters was sent to them by plaintiffs. The receipt of this information was acknowledged by the adjusters by a letter dated April 17, 1964, in which they for the first time stated that the information was “ received completely without prejudice and whatever rights your underwriters may have in connection with this matter, the delay involved, and under the terms and conditions of your policy, are intended to be absolutely reserved.” Coupled with this statement there was also, in the letter, a request for further information. A summons and a complaint were prepared by plaintiffs’ attorneys and were served on a secretary of a vice-president of Reliance on May 1, 1964. Seventeen days later (and after the expiration of the year limitation stated in the policy) Reliance moved to vacate the service. That service was vacated by the court by order dated August 3, 1964. Service of process was then effected on Reliance on August 12, 1964. Reliance then interposed the defense of the expiration of the year before suit was commenced. A contractual limitation for the institution of a suit on an insurance policy “should only be permitted to prevent a recovery, when its just and honest application would produce that result” (Mayor v. Hamilton Fire Ins. Co., 39 N. Y. 45, 46). It is idle in this ease to say that plaintiffs concealed their intention to claim under the policy for their loss. Indeed, plaintiffs may well have supposed up to the time that