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Downing v. Wolverine Ins. Co.

OCTOBER 1, 1965.




Appeal from the Circuit Court of the 17th Judicial Circuit, Winnebago County; the Hon. ALBERT S. O'SULLIVAN, Judge, presiding. Judgment affirmed.


This is an appeal from a judgment entered in favor of the plaintiff in the Circuit Court of Winnebago County in the sum of $5,506.35 and costs. The action was based on a fire insurance policy issued by defendant, insuring merchandise and equipment owned by plaintiff in the operation of a soft drink distributing business. The question for determination is whether, under the circumstances of the case, defendant waived, or was estopped to enforce the provisions of its policy which required plaintiff to file proof of loss within 60 days and file suit within one year in order to recover thereunder.

Plaintiff's amended complaint sets forth the issuance of the policy and the subsequent occurrence of the fire on November 23, 1962; that plaintiff gave immediate notice of the fire to the defendant; that Carter Claims Service, agent of defendant, (herein called Carter) promptly visited the premises; that plaintiff submitted to Carter, within 60 days, a list of items destroyed by the fire valued at $6,241.35; that Carter advised plaintiff that it was not necessary to prepare or file other forms; that about six weeks after the fire, defendant, through Carter, paid plaintiff for loss of two of his trucks damaged by fire, which trucks were insured by defendant under a separate policy; and that in the latter part of January 1963, Carter sold a damaged forklift and truck of plaintiff's, which were covered by the policy in question, for salvage value, to Forest Hills Distributors.

The complaint further stated that defendant, through Carter, offered to settle plaintiff's claim under the policy for $4,577.65, but plaintiff refused such offer and the parties continued to negotiate a settlement; that thereafter, on August 19, 1963, Carter withdrew defendant's prior offer and made a new offer of $4,277.45, which plaintiff likewise refused and the parties continued settlement negotiations; that plaintiff negotiated with defendant until February 3, 1964, a period in excess of one year after the date of the fire; that on February 4, 1963, defendant, by letter, advised plaintiff that it would not honor his claim in that proof of loss was not filed within 60 days and suit had not been filed within one year as required by the policy; that plaintiff had kept and performed all conditions of the policy, and by reason of the foregoing facts, defendant had waived the requirement of filing proof of loss with it within 60 days of the fire and of bringing suit within one year thereof; and that defendant's refusal to pay plaintiff was vexatious and, therefore, plaintiff was entitled to recover $6,241.35 under the policy, plus attorney's fees and interest.

Defendant filed an answer to the amended complaint, which admitted the issuance of the policy, the occurrence of the fire while the policy was in effect, but denied that plaintiff had complied with the provisions of the policy regarding notice, proof of loss, or the filing of suit. The answer also contained affirmative defenses which asserted that "plaintiff did not, as required by said policy of insurance, within 60 days after the loss, file a proof of loss"; and that "this suit is barred by the provisions of said policy in that it was not commenced within twelve months after the inception of the loss."

Defendant's theory of the case is embraced in its affirmative defenses. The trial judge, however, found, from the evidence, that the defendant had waived, or was estopped from enforcing these provisions of its policy, and entered judgment in the sum of $5,506.35 plus costs, which included neither interest nor attorney's fees. The defendant, on appeal, urges that the findings of the trial court are not supported by the evidence and there was no waiver or estoppel invoked under the facts of this case, and, consequently, the judgment was erroneous under the law and the evidence.

The evidence established that plaintiff notified Stuart Weller, his broker, of the fire on November 23, 1963, — the day it occurred — and that Weller got in touch with Mr. Carter of Carter Claims Service, who went to Byron about noon that day. The fire was still burning and only a cursory inspection was then made. On December 17, 1962, when plaintiff and Carter met to prepare an inventory of the damaged and destroyed property, plaintiff asked Carter what he had to do to get paid and Carter replied: "Just make up a list and send it to me." Plaintiff made a list of damaged or destroyed equipment and merchandise and submitted this to Carter about February 20, 1963. The list totaled $6,245.35. Carter reviewed the values of some of these articles and submitted two settlement figures which were refused by plaintiff, as alleged in the complaint. The last offer was made by defendant's letter dated August 19, 1963.

The property destroyed by the fire consisted of inventory and equipment. Until defendant denied the claim on February 4, 1964, there never was any question of coverage under the policy — the only dispute being a difference in opinion as to the value of certain items of the equipment. The parties were in agreement as to the value of the merchandise listed in the inventory.

In February of 1963, Carter picked up a damaged forklift covered under the policy and sold it to Forest Hills Distributors. Although Carter later caused Forest Hills Distributors to reissue a check payable to the plaintiff, the original check was made payable to the defendant and was held by Carter until at least December 4, 1963, more than a year from the date of the fire, as disclosed by Plaintiff's Exhibit 4.

Besides the numerous conferences plaintiff had with Carter, Stuart Weller on behalf of plaintiff, also frequently discussed the claim with Carter. Weller dealt with Carter from the date of the fire and for more than a year thereafter; he had negotiations with Carter in September, October and November of 1963. Weller did not learn that defendant intended to deny plaintiff's claim until February 20, 1964.

Mrs. Lucille McMahon, an employee of the Weller Agency, who worked at the claims desk, also had numerous conversations with Carter. She had a telephone conversation with him as late as November 5, 1963, and was advised by him that the claim was still open. Mrs. McMahon made a memorandum concerning this telephone conversation.

Plaintiff's Exhibit 4, a letter from Carter to defendant's claims supervisor in Decatur, dated December 4, 1963, indicates that on or about September 4, 1963, Carter had a telephone conference with J.A. Okerman, an officer of the defendant. This exhibit recites the substance of that conversation, as follows:

"Approximately 60 days ago, I received a telephone call from J.A. Okerman, advising me that I should make no further contact with Eugene Downing who operated the Byron Distributing Company and that I should not discuss the claim with him further as our position in this case would be improved one year after the date of the fire."

In October of 1963, approximately a month after the said telephone conference, plaintiff called Carter to inquire about the status of his claim and Carter then told him that he, Carter, was out of the case; that the file had been turned back to the defendant; and that the ...

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