Good faith claim goes bad
On September 6, 2009, Jack and Caroline Brockway discovered that a hole had been cut in their fence and that property had been stolen from their back yard. They reported the theft to the police and, on September 8, 2009, called their Allstate agent to inform him of the theft. After their initial contact with the agent, the Brockways discovered that additional property was missing, and in the summer of 2010 they talked with their agent about the additional missing items. On September 10, 2010, the Brockways participated in a telephone conference with an Allstate investigator regarding the items they claimed had been stolen during the theft incident. During that call, the investigator did not mention the “contractual provision in the [Brockways’ two] policies that required [them] to file a lawsuit or any other claim arising from this loss within two years from the date of the loss itself.”
On September 17, 2010, Allstate sent a letter to the Brockways regarding its investigation of their claims. The letter informed the Brockways that they were required to provide Allstate a sworn statement of proof of loss and to include “documentation that supports the ownership and value of any stolen items claimed.” (Allstate also informed the Brockways that the “statute of limitations on this claim expires 2 years from the date of loss,” insisted on “complete compliance with all of the terms of the policy and the laws of Oregon,” reserved all of its rights and defenses in conjunction with the policy, and stated that “[n]o waiver or estoppel of any kind is intended, nor may any be inferred.”
Thereafter, Allstate sent the Brockways several letters seeking additional documentation or information and stating that it was continuing to investigate the claim. In September 2011, Allstate requested that the Brockways participate in examinations under oath. It conducted those examinations in October 2011. After the examinations, Allstate again sought additional information and documents and continued to investigate the loss until February 2012.
In many of its letters to the Brockways, Allstate repeated its admonition that it insisted on compliance with all policy terms, reserved its rights and defenses, and that no waiver or estoppel of any kind was intended or should be inferred. In February 2012, Allstate denied the Brockways’ claims, based on its determination that plaintiffs had misrepresented material facts and failed to cooperate with the investigation.
On September 5, 2012, the Brockways brought an action against Allstate seeking, among other things, damages for breach of contract and for breach of the implied covenant of good faith and fair dealing. Allstate moved for summary judgment, arguing that the action was untimely in light of a two-year suit limitation provision in the policies. The court granted Allstate’s motion. The Brockways appealed.
On appeal, the Brockways raised two assignments of error. In their first assignment, they contended that the court erred in granting the motion “in light of * * * evidence supporting
[plaintiffs’]” position that Allstate should be estopped from invoking the suit-limitation provision. In their second assignment of error, the Brockways argued that, in any event, the court erred in granting summary judgment on their claim for breach of the implied covenant of good faith and fair dealing because that claim “did not come into existence until Allstate issued its denial letter,” and the action was filed within two years of that denial.
With respect to the first assignment of error, the court stated that the record did not contain evidence “from which an objectively reasonable juror could find an estoppel.” The court found no evidence that Allstate made a misrepresentation to the Brockways regarding the suit limitation provision. Instead, the evidence was that on September 17, 2010, Allstate informed the Brockways that their time to file an action relating to their claims “expires 2 years from the date of loss.” Furthermore, in its letters, Allstate repeatedly stated that it reserved all its rights and defenses and that no waiver or estoppel was intended or should be inferred.
With respect to the second assignment of error, the Brockways argued that their claim for breach of an implied covenant of good faith was not covered by the policies’ suit limitation provision, but instead was covered by a different suit limitation provision that stated: “No one may bring an action against us unless there has been full compliance with all policy terms. Any action against us to which neither the Action Against Us provision located in Section I—Conditions nor the Action Against Us provision located in Section II—Conditions applies must be commenced within two years of the date the cause of action accrues.”
The Brockways argued, as they did with respect to the issue of estoppel, that “the evidence and conduct of Allstate, affirmative as it was, reasonably induced [plaintiffs] not to commence any legal action prior to September 6, 2011.” Accordingly, in the Brockways’ view, the “facts presented warrant review by a trier of fact.”
The Brockways emphasized that, in many of its communications, Allstate failed to state its view that any action to enforce their claims had to be commenced on or before September 6, 2011. The court noted, however, that the two-year limitation provision was contained in the policies and state statute and was pointed out by Allstate in an early letter to the Brockways. More important, the court said, the policies imposed no duty on Allstate to remind the Brockways of the policy terms, and the implied duty of good faith cannot be construed in a way that inserts new terms into the policies.
The court agreed with Allstate that no issues of material fact existed regarding the alleged breach of the duty of good faith and fair dealing and that, under the circumstances, the Brockways could not maintain that claim as a matter of law. The court concluded that Allstate was entitled to judgment as a matter of law and that the trial court did not err in granting summary judgment in favor of Allstate.
Brockway vs. Allstate Property and Casualty Insurance Company-Court of Appeals of Oregon-March 1, 2017-No. A155335.
