APPEAL from the Circuit Court of Perry County; the Hon. ROBERT
L. BASTIEN, Judge, presiding.
MR. PRESIDING JUSTICE EBERSPACHER DELIVERED THE OPINION OF THE COURT:
Plaintiff, George E. Tibbs, brought this action in the circuit court of Perry County to recover $12,000 allegedly owed him under a fire insurance policy issued by defendant, Great Central Insurance Company, for the fire loss of Tibbs' liquor store. The insurance company moved to dismiss the complaint on the grounds that Tibbs failed to file a proof of loss statement and failed to bring suit within the time periods required by the policy. Tibbs asserted that the insurance company's denial of liability under the policy, on the basis of Tibbs having been charged with arson in connection with the liquor store fire, operated as a waiver of the insurance company's right to assert these conditions as a defense to recovery. The lower court granted the insurance company's motion to dismiss, from which Tibbs brings this appeal.
The facts are not in dispute. Tibbs' Missouri liquor store was destroyed by fire on July 23, 1974. The fire insurance policy, under which Tibbs now claims, provides that Tibbs must file proof of loss within 60 days of the occurrence and must bring suit within one year. On August 1, 1975, more than a year after the fire, Tibbs' attorney wrote to the insurance company and asked whether Tibbs had ever filed proof of loss. On August 25, 1975, the insurance company replied that Tibbs had not submitted any proof of loss and that the company had no information about the fire. Approximately six months later, on February 18, 1976, the insurance company sent the following letter to Tibbs:
"This letter is to advise you that Great Insurance Company hereby denies liability under the above captioned policy for a loss occurring on or about June 23, 1974, in view of an action filed before Jack L. Jolly, judge of the magistrate court in and for the County of Butler, styled State of Missouri, County of Butler, State of Missouri-v-George Tibbs. This action arises out of facts which are in violation of the above captioned policy and it is because of those facts that this claim is being denied."
Thereafter on October 22, 1976, Tibbs brought the instant action.
On appeal, Tibbs contends that the letter of February 18 effected a waiver of Tibbs' failure to comply with the time limitations of the policy for submitting proof of loss and for bringing suit. The sole question presented is thus whether the letter sent after expiration of the time limitations restricts the insurer to the grounds asserted therein and waives the time limitations of the policy. We find that an affirmative answer to this question would be untenable under the circumstances.
1 A waiver consists of a voluntary, intentional relinquishment by the insurer of a known right. (Tarzian v. West Bend Mutual Fire Insurance Co., 74 Ill. App.2d 314, 221 N.E.2d 293; Allstate Insurance Co. v. National Tea Co., 25 Ill. App.3d 449, 323 N.E.2d 521.) Estoppel, on the other hand, is generally based upon conduct of the insurer which misleads the insured to his detriment. (Dickirson v. Pacific Mutual Life Insurance Co., 319 Ill. 311, 150 N.E. 256; but see Bennett v. Union Central Life Insurance Co., 203 Ill. 439, 67 N.E. 971.) Implied waiver, since it arises from the conduct of the insurer, may be viewed as a concept based on either waiver or estoppel "for it exists when there is an intention to waive unexpressed, but clearly to be inferred from circumstances, or when there is no such intention in fact, but the conduct of the insurer has misled the insured into acting on a reasonable belief that the insurer has waived some provision of the policy." 43 Am.Jur.2d Insurance § 1054, at 978 (1969); see generally Stoltz v. National Indemnity Co., 345 Ill. App. 495, 104 N.E.2d 320.
Tibbs urges, citing Hansell-Elcock Co. v. Frankfort Marine Accident & Plate Glass Insurance Co., 177 Ill. App. 500, that the insurance company, by not raising the defenses in the letter, thereby waived them. Tibbs, however, cites no authority, and we have found none, to support the proposition that the insurance company was required to assert all its defenses in the letter. Hansell-Elcock is inconsistent with such a theory, and instead supports the insurance company's response that the defenses raised, by way of a motion to dismiss the complaint, were raised in a timely manner.
2 The single operative fact relied upon by Tibbs is the insurance company's denial of liability on a ground unrelated to the defenses now asserted. With regard to the proof-of-loss provision, it is a general rule that a denial of liability made by the insurer during the period in which proof of loss is required to be filed, and which is made on grounds unrelated to the proof of loss, will be considered to be an implied waiver of the proof of loss requirement. (Stoltz v. NationalIndemnity Co.; Tarzian v. West Bend Mutual Fire Insurance Co.) In such a situation, the denial of liability will have made the filing of such proof a futile gesture and it may therefore have misled the insured to omit furnishing the insurer with such proof. Moreover, the denial itself implies the insurer's knowledge of the loss and intention to waive any proof thereof. This rule, however, has no application where the denial is made after the expiration of the period for submitting proof of loss. (Buysse v. Connecticut Fire Insurance Co., 240 Ill. App. 324.) In the case at bar, the letter could not have caused Tibbs to omit furnishing the proof of loss and the insurance company, having no knowledge of the loss during the period, certainly could not have intended during the period to waive its right to be informed. An implied waiver has also been found where, after expiration of the period for submitting proof of loss, the insurer requested the insured to engage in a course of conduct inconsistent with the assertion of the defenses and because of the request, it may be clearly inferred that the insurer intended to waive the failure to comply with the proof of loss provision. (See Kenilworth Insurance Co. v. McDougal, 20 Ill. App.3d 615, 313 N.E.2d 673; McMahon v. Coronet Insurance Co., 6 Ill. App.3d 704, 286 N.E.2d 631 (where the insured complied with the insurer's request, made after the expiration of the period and with knowledge thereof, to submit statements about the occurrence).) In the case at bar, the letter cannot be construed as evidencing any intent by the insurance company to waive Tibbs' failure to comply with the proof of loss provision. The insurance company merely denied liability on a specified ground and such is not inconsistent with the subsequent assertion of other grounds.
3 Similarly, the provision of a policy limiting the time in which suit may be brought, may also be waived, as where an insurer conducts negotiations with the insured for a settlement and thereby lulls the insured into a false security calculated to cause delay in bringing the action. (Dickirson v. Pacific Mutual Life Insurance Co., 319 Ill. 311, 150 N.E.2d 256.) However, again we cannot find, in the case at bar, that the insurance company's denial of liability on an unrelated ground, made after expiration of the time limitation for bringing suit, implies any intention to waive the failure to comply, and certainly the denial could not have caused that which had already occurred. While there are jurisdictions in which stated public policy looks with disfavor on policy time limitations for bringing suit, one of which is Missouri (see Asel v. Order of United Commercial Travelers of America (Mo. App. 1946), 193 S.W.2d 74, affirmed (1946), 355 Mo. 658, 197 S.W.2d 639), the State in which plaintiff's insured property was located, plaintiff did not see fit to file suit in that jurisdiction. There exists no justification for Tibbs' delay of over a year in bringing this action, or in informing the insurance company of the loss, and particularly none for which the insurance company may be held responsible. For the foregoing reasons, we find no error in the dismissal of Tibbs' complaint and accordingly we affirm the judgment entered by the circuit court of Perry County.
Mr. JUSTICE GEORGE J. MORAN, dissenting:
Insurance policy provisions requiring proof of loss and limiting the time within which an action on the policy may be brought are inserted for the benefit of the insurer and therefore may be expressly or impliedly waived by words or conduct of the insurer inconsistent with an intention to demand compliance with such limitations. Since forfeitures of the rights of insured persons are not looked upon with favor by the courts>, the doctrine of waiver has developed in order to avoid forfeitures in a variety of circumstances in which conduct by an insurer has indicated an intention to waive forfeiture. Generally, courts> liberally construe in favor of the insured actions tending to show waiver. (J. Appleman, Insurance Law and Practice § 9082 (1968).) In Illinois, an insurer's denial of liability for a loss on grounds other than a failure to comply with a proof of loss provision, generally operates as a waiver of the insurer's right to insist on strict compliance. (Lumbermen's Mutual Insurance Co. v. Bell, 166 Ill. 400, 45 N.E. 130; Tarzian v. West Bend Mutual Fire Insurance Co., 74 Ill. App.2d 314, 221 N.E.2d 293; Stoltz v. National Indemnity Co., 345 Ill. App. 495, 104 N.E.2d 320; 22 Ill. L. & Prac. Insurance § 433 (1956).) Similar acts or conduct by an insurer may also constitute a waiver of a policy provision limiting the time within which the insured may bring suit on the policy. (Metropolitan Accident Association v. Froiland, 161 Ill. 30, 43 N.E. 766.) Provisions which impose a period of limitation less than that mandated by the applicable statute are to be strictly interpreted, and only slight circumstances will be held sufficient to establish a waiver of these provisions. 22 Ill. L. & Prac. Insurance § 526 (1956).
Defendant argues that plaintiff is not entitled to claim a waiver of a policy limitation unless there is some prejudice or detrimental reliance caused by the conduct of the defendant which constitutes the alleged waiver. In support of this proposition, defendant offers a number of Illinois decisions which have held that waiver of proof of loss clauses and limitation on actions provisions in insurance policies will not be inferred unless the insurer has engaged in conduct which has induced the insured to delay or forego an assertion of rights. (See Dickirson v. Pacific Mutual Life Insurance Co., 319 Ill. 311, 150 N.E. 256; Baxter v. Metropolitan Life Insurance Co., 318 Ill. 369, 149 N.E. 243; Stahly Cartage Co. v. Universal Mutual Casualty Co., 11 Ill. App.2d 365, 138 N.E.2d 243.) In Dickirson the supreme court was faced with an alleged waiver of a period of limitation in an insurance policy. The court concluded that in order to constitute a waiver of this provision, the insurer's conduct must have been such as to cause the insured "to change his position by lulling him into a false security, thereby causing him to delay or waive the assertion of his rights * * *." 319 Ill. 311, 318.) According to the authorities cited by defendant, there is no distinction between the doctrines of waiver and estoppel in insurance cases. Under these decisions, an insured will not be permitted to claim a waiver of forfeiture unless the insurer's actions have induced the insured to forego or delay an assertion of his rights. One court has even held that it is necessary for anyone claiming waiver or estoppel to prove either fraud or perjury by the insurer. Stahly Cartage Co. v. Universal Mutual Casualty Co., 11 Ill. App.2d 365, 368, 138 N.E.2d 243.
Since the denial of liability was made after the period for filing proof of loss statements and bringing an action on the policy had expired, plaintiff could not have been induced to forego an assertion of rights under the policy because the conditions giving rise to forfeiture occurred prior to the alleged waiver of those conditions. Thus, under ...