APPEAL from the Circuit Court of Cook County; the Hon. PAUL F.
ELWARD, Judge, presiding.
MR. JUSTICE LINN DELIVERED THE OPINION OF THE COURT:
Rehearing denied March 20, 1979.
On October 29, 1976, plaintiff, Salloum Foods & Liquor, Inc. (Salloum Foods), filed an action in the circuit court of Cook County against defendant, Parliament Insurance Co. (Parliament), seeking recovery, under a policy of insurance, for losses it allegedly incurred as a result of a September 18, 1975, robbery. The trial court granted Parliament's motion for summary judgment holding that Salloum Foods' suit was not filed within the insurance policy's one-year limitation period. Salloum Foods appeals, contending Parliament either waived the one-year limitation period or is estopped from relying upon it.
We reverse the trial court and remand this case for further proceedings.
On January 10, 1975, Parliament issued to Salloum Foods, a one year robbery and vandalism insurance policy. Pursuant to the terms of this insurance policy, Parliament apparently agreed *fn1 to idemnify Salloum Foods against robbery and vandalism loss in connection with Salloum Foods' business operation on the premises at 935 East 79th Street in Chicago, Illinois.
Salloum Foods claims that as a result of a September 18, 1975, robbery, it lost merchandise and currency amounting to $15,158 and also incurred property damage in the amount of $850. Salloum Makhamre, the principal stockholder of Salloum Foods, Inc., promptly notified Parliament of the September 18, 1975, robbery loss. He then entered into negotiations with Craig Ramsay of L.J. Shaw & Co., Parliament's claims adjuster, in an attempt to settle the insurance claim. In early October 1975, Makhamre executed and presented Ramsay with a notice of loss form, itemizing the merchandise and currency allegedly stolen and the property damage allegedly incurred in the robbery.
On November 1, 1975, shortly after the start of the settlement negotiations, Salloum Foods was sold and its robbery and vandalism insurance policy with Parliament cancelled. Sometime thereafter, Haines-Craft Insurance Agency, Salloum Foods' insurance agent, requested and obtained from Makhamre the copy of the robbery and vandalism insurance policy which had been issued to Salloum foods by Parliament. Haines-Craft Insurance Agency, at Parliament's request, forwarded the policy to Parliament.
In an affidavit filed in the trial court, Makhamre asserts that, at an early point in the settlement negotiations, "the adjuster" (apparently referring to Ramsay) offered to settle the store's insurance claim for an (unstated) sum which amounted to less than one-half of Salloum Foods' $16,008 claimed loss. *fn2 Makhamre rejected this proposed settlement.
In connection with their ongoing negotiations, Ramsay sent Makhamre a certified letter on December 8, 1975. This letter states in relevant part:
As you know I represent the Parliament Insurance Company with regard to the above captioned loss. To date I have not received the proper claim presentation as I have repeatedly requested. Your insurance policy includes coverage for vandalism and robbery occurrences. You and your store sustained a burglary attempt and there was apparently some type of vandalism loss at the insured location. You therefore only have vandalism coverage for the above captioned occurrence. My initial inspection and contact with you on September 22, 1975 resulted in my finding very little visible evidence of an extensive vandalism loss. My follow-up contacts and inspections on October 16 and 29, 1975 again did not produce the desired claim presentation which I requested from you.
I now turn your attention to the enclosed portion of your policy, specifically, lines 90 through 122. This section describes your contractual duties when a loss occurs. Please read these 32 lines carefully and be advised that I will extend the time for filing proof of loss to and including January 8, 1976. Please call or consult with me if you do not understand any word or phrase in these 32 lines which outlines your requirements in case a loss occurs.
I have been in contact with your attorney, Mr. Edmond Mosley, *fn3 and he does understand the policy requirements as noted above and I also reiterated to him that the policy specifically states "the insured shall keep records of all the insured property in such a manner that the company can accurately determine therefrom the amount of loss." Unless you can substantiate the amount of merchandise and the amount of loss through proper store records, I am in no position to recommend any type of loss adjustment and claim payment to your company." (Emphasis added.)
Attached to Ramsay's December 8 letter was part of an insurance policy. While Ramsay, in his letter, referred to this attachment as if it was copied directly from Salloum Foods' own robbery and vandalism insurance policy, Parliament admits and a reading of the attachment indicates that it was copied, instead, from a standard fire insurance policy form.
Lines 90-122 of the attached portion of the standard fire insurance policy, which were called to Makpamre's attention by Ramsay's letter, set forth an insured's contractual obligation to furnish proof of alleged losses. While not referred to by Ramsay, contained elsewhere within that portion of the standard fire insurance policy sent to Makhamre, was a one year limitation provision:
"No suit or action on this policy for the recovery of any claim shall be sustainable in any court of law or equity * * * unless commenced within twelve months next after inception of the loss."
On January 22, 1976, Ramsay sent to Makhamre, by certified mail, a follow-up letter. This letter states in pertinent part:
"I regret to inform you that on January 8, 1976, time expired with regard to the extension of time for submitting proof of loss to your company which I granted in my letter of 12/8/75.
You have failed to substantiate any portion of your alleged vandalism loss. You have not made any effort to comply with the policy requirements which outlines your duties and responsibilities when a loss occurs. I specifically sent you this portion of your policy in my letter of 12/8/75. * * *
I have notified your company of these findings and see no reason to maintain an open file."
Sometime in February or March 1976, Makhamre discharged his previous counsel and hired attorney Thomas O'Brien to represent him in connection with Salloum Foods' insurance claim. On April ...