Rosenthal v. Reliance Insurance

In an action to recover upon four policies of insurance against loss of personal property, plaintiffs appeal from an order of the Supreme Court, Kings County, entered March 2, 1965, which (1) granted the motion of defendant Reliance Insurance Company (the insurer on one of the policies) for summary judgment and (2) denied as academic plaintiff’s cross motion to dismiss the defense contained in said defendant’s answer. Order affirmed, with $10 costs. Plaintiffs’ main contention, and the one adopted by the dissenting memorandum herein, is that defendant Reliance Insurance Company should be estopped from relying on the provision in its policy which requires that all suits, actions or proceedings for the recovery of any claim be brought within 12 months after discovery of the occurrence giving rise to the claim. We find no merit in this contention. The doctrine of estoppel is applied in certain cases to prevent inequitable reliance upon a defense, such as the Statue of Limitations, which might otherwise be a bar to recovery. The stimulus for its use is conduct by one person inconsistent with a position later adopted by him which is prejudicial to the rights of another who relied on such prior conduct to his detriment (cf. Lynn v. Lynn, 302 N. Y. 193). In the instant case plaintiffs discovered the loss of certain items covered by the policy on May 5, 1963. Fifteen days later, on May 20, plaintiff Imre J. Rosenthal met with defendants’ adjusters and supplied them with a detailed 861 account of the loss; and on May 22, the adjusters acknowledged his assistance and requested certain additional information. There was no further correspondence until April 14, 1964 — 11 months later — when he supplied the information requested the previous May. No explanation is given for this delay and there is nothing to indicate that plaintiffs were lulled into inactivity by anything said or done by Reliance. There is no allegation that Reliance made false representations or conducted itself in such a way as to mislead plaintiffs into believing that the time limitation would not be invoked (see Skylark Enterprises v. American Gent. Ins. Co., 13 A D 2d 707). There is nothing to show that Reliance’s conduct was inconsistent. Indeed, the record shows that plaintiffs were warned about three weeks prior to expiration of the 12-month period that the insurers were reserving all their rights under the terms and conditions of the policy. When plaintiffs finally instituted proceedings, only four days before expiration of the 12-month period, service of the summons and complaint on Reliance was defective. Reliance’s failure immediately to notify plaintiffs of the defect cannot be considered either inequitable conduct or a breach of any fiduciary relationship (see Erbe v. Lincoln Rochester Trust Co., 13 A D 2d 211). By waiting 11 months and 26 days before attempting service, plaintiffs ran the risk of exactly what occurred here: defective service and dismissal of the action. Ughetta, Acting P. J., Christ, Brennan and Hill, JJ., concur;