Opinion
C.A. No. 00C-08-066
Submitted: April 20, 2001
Decided: July 10, 2001
Upon Defendant's Motion for Summary Judgment. Granted.
Scott E. Chambers, Esquire, Schmittinger and Rodriguez, P.A., Dover, Delaware, attorneys for the Plaintiffs.
Jeffrey A. Young, Esquire, Young Young, Dover, Delaware, attorneys for the Defendant.
ORDER
On this 10th day of July, 2001, upon consideration of the Defendant's Motion for Summary Judgment, it appears that:
(1) William C. Woodward and Christine L. Woodward ("Plaintiffs") filed a complaint on August 31, 2000, seeking coverage under their homeowner's policy with Farm Family Casualty Insurance Company ("Defendant"). Plaintiffs seek coverage for structural and cosmetic damages to their home which they claim were caused by Delaware Department of Transportation ("DelDOT") highway construction on State Route 1.
(2) According to the Plaintiffs, DelDOT began working with heavy equipment about 125 feet in front of their home around May 7, 1998. At this time, Plaintiffs began to notice cracks in the exterior block walls of their home as well as cracks on some of the interior walls. Plaintiffs claim that these cracks have progressively worsened. At the time, Plaintiffs believed that the damage was caused by highway work by DelDOT. Following the completion of the road construction, an engineering expert hired by the Defendant performed a site inspection of the Woodward's home on September 16, 1998. The engineering expert determined that the damage to the Woodward home was strictly cosmetic, posing no threat to the structural integrity of the home. Plaintiffs also retained their own engineer whose report dated January 20, 2000, further documented the damage to their home. This report contains a far graver picture of the damage to the Woodward home and states that DelDOT's construction was the likely cause of the damage. Plaintiffs filed the immediate action with this Court on August 31, 2000. Thereafter, Defendant filed this motion for summary judgment.
For reasons that have no bearing on this case, Plaintiffs have not brought an action against DelDOT.
(3) Superior Court Civil Rule 56(c) states that summary judgment should be granted "if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Summary judgment cannot be granted unless after viewing the record in light most favorable to the non-moving party, there are no material issues of fact. The moving party bears the burden of showing that there are no material issues of fact; however, if the moving party "supports" the motion under the Rule, the burden shifts to the non-moving party to show that material issues of fact do exist. In Merrill v. Crothall-American, Inc., the court stated that the "role of a trial court when faced with a motion for summary judgment is to identify disputed factual issues whose resolution is necessary to decide the case, but not to decide such issues."
Sup. Ct. Civ. Rule 56(c).
Moore v. Sizemoore, Del. Supr., 405 A.2d 679, 680 (1979).
Id.
Merrill v. Crodiall-American, Inc., Del. Supr., 606 A.2d 96, 99 (1992).
(4) The issue before the Court in this summary judgment motion is whether or not the Plaintiffs claim is time-barred. Defendant argues that the insurance policy contains a provision that establishes a one-year limitation for filing suit and alternatively that 10 Del. C. § 8107 contains a two-year statute of limitations. The alleged damage occurred on May 7, 1998, therefore Plaintiffs would have missed both of these time limits with their filing on August 31, 2000. Plaintiffs argue that their claim is not time-barred for the following reasons: first, the Defendant did not give notice of the one-year time limit pursuant to 18 Del. C. § 3914; second, there is ambiguity in the policy language's phrase "action is started;" third, the Defendant waived the right to assert the statute of limitation by using misleading conduct; and finally, because 10 Del. C. § 8107 does not apply as it deals with personal injury, not realty. Essentially, the Court must determine two things: first, which time limit applies — the one in the homeowner's policy or the statute of limitations in Title 10 of the Delaware Code, and second, whether any other reasons exist to prevent the time limitations from applying.
(5) The Court must first decide which time limit applies — the one-year limit in the insurance policy or the time limits imposed by statute. One-year insurance contract time limitations have been upheld by Delaware courts. In Ottendorfer v. Aetna Ins. Co., the Supreme Court stated that "[t]here is no doubt but that a one-year period of limitation of suit contained in an insurance policy is reasonable and binding upon the insured. The insurance contract provision in question states that:
Ottendorfer v. Aetna Ins. Co., Del. Supr., 231 A.2d 263, 265 (1967).
8. Suit Against Us. No action can be brought unless the policy provisions have been complied with and the action is started within one year after the date of loss.
This provision is similar to the policy time limitations upheld by Delaware courts in other cases. Therefore, the one-year time limit from the Plaintiffs homeowner's insurance policy will be the controlling statute of limitations for this action. The alleged damage to the home occurred in early May, 1998. Using the insurance policy's one-year statute of limitations, Plaintiffs should have filed their complaint by May of 1999. The Complaint in the matter sub judice was not filed until August 31, 2000, well beyond the statute of limitations.
See, First Fed'l Savings and Loan Assoc. of New Castle County v. Nationwide Mutual Fire Ins. Co., Del. Supr., 460 A.2d 543 (1983) (discussing a virtually identical one-year limitation); see also, Betty Brooks, Inc. v. Ins. Placement Facility of Delaware, 456 A.2d 1226 (1983) (discussing a similar one-year limitation).
This finding negates the need to determine whether 10 Del. C. § 8106 or § 8107 applies to this matter.
(6) Plaintiffs' failure to comply with the policy's one-year filing limit is fatal to their cause of action unless other legal reasons exist which prevent the limit from applying. According to the Plaintiffs, the statute of limitations within the policy should not apply to them for a number of reasons, including the following: the policy language concerning the time limit is ambiguous, Defendant failed to give them notice of the one-year time limit as required by 18 Del. C. § 3914, and finally because waiver and/or estoppel prevent the Defendant from raising the one-year limit.
(7) The first of these issues the Court will address is the alleged ambiguity of the policy's one-year time limitation. Plaintiffs claim that this provision is ambiguous because the phrase "action is started" can be interpreted to mean when the claimant gives notice to the insurer of the loss or the actual filing of a suit with the court. Ambiguous provisions in insurance contracts are construed to match the reasonable expectations of the .insured. The Court finds that this phrase is not ambiguous as the bolded header for this provision is "Suit Against Us," not filing a claim for loss. The use of the terms "suit" and "action" are indicative of a lawsuit, not filing an insurance claim. It is difficult to fathom how this simple and direct statement can be construed as ambiguous. The provision in question contains two clear requirements for filing suit: complying with the policy provisions and filing suit within one year of the date of the loss. In addition, identical insurance provisions have been upheld by Delaware Courts in other cases. The insurance policy is not ambiguous, rather it states that the policy holder must comply with the policy provisions such as giving prompt notice to the insurer and file suit in court against the insurer within one year.
Hallowell v. State Farm, Del. Supr., 443 A.2d 925, 926-927 (1982).
See, note 7 supra (comparing similar cases).
The second issue raised by the Plaintiffs with respect to enforcing the time limitations is that the Defendant did not comply with 18 Del. C. § 3914. Section 3914 states that:
An insurer shall be required during the pendency of any claim received pursuant to a casualty insurance policy to give prompt and timely written notice to claimant informing claimant of the applicable state statute of limitations regarding action for his/her damages.
Failure to comply with section 3914 bars the insurance carrier from raising the statute of limitations as a defense. Plaintiffs received no notice of any applicable time limitation and therefore claims that Defendant should be barred from raising time issues.
Lankford v. Richter, Del. Supr., 570 A.2d 1148, 1149 (1990).
(8) Defendant's rebuttal to this claim begins with 18 Del. C. § 901 et seq, specifically § 904 and § 906. These sections of the code define different types of insurance. Section 904 defines "property insurance" and Section 906 defines casualty insurance." From these statutorily defined terms, Defendant argues that § 3914 does not apply because it specifically refers to only "casualty insurance policies" and the policy in question is "property insurance." The homeowners' insurance policy in question is "property insurance" as Plaintiffs' policy falls within the definition in § 904 and because it does not meet any of the listed terms which define "casualty insurance" in § 906. The Court agrees that § 3914 by its explicit language applies to claims received pursuant to a casualty insurance policy. Therefore, the question that remains is whether the Court will apply the notice requirements of § 3914 to property insurance policies. In the face of specific, statutorily defined terms, the Court will not extend the statute beyond its language. Practically, this result is troubling to the Court and should be addressed by the State Legislature so that all insureds, regardless of the type of policy, receive notice of the applicable time limitations for filing suit. However, Defendant's failure to give notice of the one-year time limit within the policy is not fatal to their raising a statute of limitation defense in this case.
§ 904. "Property insurance" defined.
Property insurance is insurance on real or personal property of every kind and of ever interest therein against loss or damage from any and all hazard or cause, and against loss consequential upon such loss or damage, other than non-contractual legal liability for any such loss or damage. Property insurance does not include title insurance, as defined in § 908 of this chapter. 18 Del. C. § 904.
§ 906. "Casualty insurance" defined: (a) Casualty insurance includes: (1) Vehicle insurance. . . (2) Liability insurance. . . (3) Workers' compensation and employer's liability. . . 18 Del. C. § 906.
(9) Plaintiffs also claim that Defendant waived the right to use the one-year provision as their conduct was misleading. The actions which Plaintiffs allege were misleading consist of the Defendant's settlement offers and correspondence between the insured and the insurer without mention of the one-year time limitation. Plaintiffs argue that the open settlement offer and continued negotiations shows that a factual question exists as to whether or not the Defendant's actions were misleading and relied upon by Plaintiffs to their detriment. Waiver is an intentional relinquishment of a known right. Plaintiffs have not demonstrated to the Court that a factual dispute exists concerning any affirmative action that demonstrates waiver of the one-year time limit.
Betty Brooks at 1229.
(10) Similar to the waiver issue, Plaintiffs claim that the Defendant should be estopped from raising the time limitation based on the allegedly misleading conduct. The doctrine of estoppel "as it applies to the actions of an insurer, has been said to consist of misleading conduct by or on behalf of the insurer which is relied upon by the insured to his detriment. In effect, the principal of estoppel prevents the assertion of a contractual condition by a party who, through words or conduct, has fostered the impression that the condition will not be asserted as a legal defense." Therefore, the issue is "whether a rational trier of fact, viewing the facts in the light most favorable to the non-moving party, including any reasonable inferences therefrom, could find evidence to invoke an estoppel." Based on the correspondence submitted by the parties, the insurer made a settlement offer on September 21, 1998, to repair the cosmetic type damages. This settlement offer was renewed by letter on November 18, 1998. At no time did the insurer discuss the one-year limitation with the Plaintiffs. It appears that the last correspondence the insured had with the insurer was the renewed offer of settlement on November 18, 1998. The one-year limitation expired in May of 1999. Plaintiffs did not hear from the insurer for five months concerning their claim for loss. This does not amount to misleading conduct that gives rise to an estoppel.
First Federal at 545, quoting from, Ottendorfer.
Id.
In conclusion, the Court finds that the one-year limitation contained within the insurance policy controls the time within which suit may be filed against the insurer and no material issues of fact remain concerning enforcement of the one-year provision. Therefore, Defendant's motion for summary judgment is GRANTED.
IT IS SO ORDERED.