It is vital for any claim under an insurance policy that the insured comply with the specific policy terms. Failing to comply can result in the inability to legally dispute the denial of a claim. In the following case, the plaintiff failed to comply with a shortened limitations period for bringing legal suit under his homeowner’s policy and found himself without recourse when he suffered a loss.
The plaintiff’s rural house was destroyed by fire. His home and its contents were insured by a standard homeowner’s policy. The policy had the regular exclusions for intentional or fraudulent acts and required any action concerning the loss be started within one year of the date of loss.
After the claim was made, the insurance company hired an investigator to review the cause of the fire. The company informed the plaintiff by letter that it was denying coverage for the loss because the fire was not an accident, fraud had occurred, and the plaintiff had violated the intentional acts provision of the policy. The plaintiff disagreed with the insurance company’s assessment of the situation.
The insured filed a lawsuit against the insurance company one day before the deadline for action pursuant to the terms of his policy. The company filed a motion for summary judgment almost a year later and the plaintiff dismissed his suit without prejudice before a court hearing on the matter. A dismissal without prejudice typically allows a party the right to file the suit again, whereas a dismissal with prejudice means the suit can never be brought again. Eight months later, the plaintiff re-filed his suit alleging breach of contract and bad faith against the insurance company.
The company answered the new petition and pled an affirmative defense that the policy required legal action be taken within one year of the loss. Because the second suit was not filed within one year from the fire, the suit was barred under the policy terms. The insurance company followed up with a motion for summary judgment concerning the one-year limitation period. The trial court granted the insurance company’s motion. The plaintiff appealed. The trial court also held that the plaintiff’s first action did not toll the limitation period allowing the second action to be timely filed, but the plaintiff did not appeal that issue.
On appeal, the plaintiff claimed the company “waived” the one year limitation period for legal action by negotiating for settlement when the first action was filed. In order for a waiver to occur, the court must find that there must be a legal right; actual or constructive knowledge of the right by the waiving party; and an intention to relinquish the right. In addition, the insurance policy in this case required that any waivers or changes to the policy be in writing. The plaintiff’s sole evidence of waiver was his “self-serving” affidavit stating that the insurance company offered him $400,000 to settle his claim on the day his lawsuit was filed, which was one day before the expiration of the one-year limitations period.
On review, court held that the plaintiff’s affidavit failed to state specific facts rather than generalities, and as such, failed to generate material facts to defeat a motion for summary judgment on the issue. The court also held that there was no evidence of an acknowledgement of a waiver by the insurance company or any retraction of the offer after the limitations period as found in Scheetz v. IMT Insurance Co., 324 N.W.2d 302 (Iowa 1982) as relied on by the plaintiff. Without proof of any factual question, the court affirmed the summary judgment opinion. Rawlings v. State Farm Fire and Casualty Co., No. 2-452/12-0435, 2012 Iowa App. LEXIS 520 (Iowa Ct. App. Jun. 27, 2012).