Court Considers Application of Equitable Estoppel to Suit Limitation Provision

Last month, the Oregon federal district court, applying Washington law, addressed whether equitable estoppel barred an insurance company from relying on a one-year suit limitation provision.  Semeryanov v. Country Mut. Ins. Co., 2014 WL 6998097, No. 14-cv-313-SI (D. Or. Dec. 9, 2014), concerned an insured whose residence, which sat in Washington, was damaged by fire on January 11, 2012.  The applicable insurance policy contained a clause requiring that all claims under the policy must be brought within one year of the date of loss and that the insured must comply with all duties under the policy within the same period.  Before the expiration of the one year period, the insurer wrote a number of letters to the insured citing to the clauses.

On January 15, 2013, after the one year period expired, the insurer sent the insured a letter indicating that the investigation of the claim was continuing.  The letter also informed the insured that the insurer was requesting a sworn statement of loss and may also seek an examination under oath.  On November 18, 2013, nearly two years after the fire, the insurer denied coverage for the remainder of the insured’s claim.

The insured filed suit against the insurer on February 25, 2014.  The insurer filed a motion for summary judgment, arguing that the insured’s claims were barred by the applicable suit limitation period.  The insured responded that the insurer should be equitably estopped from relying on the suit limitation period based on its correspondence with the insured.

Applying Washington law, the court denied the insurer’s motion for summary judgment.  It determined that “there is at least an issue of fact whether equitable estoppel applies.”  In support, the court cited to prior Washington case law and the facts concerning the insurer’s continuing investigation and several communications after expiration of the suit limitation provision.  The court reasoned that the circumstances of the case reasonably led the insured to believe that the insurer would continue to investigate the claim and work toward settlement, without necessarily requiring initiation of litigation, and that the insurance claim was “open for further consideration.”

MLR frequently represents clients in litigation involving allegations of equitable estoppel in the context of an insurance coverage dispute.  Please feel free to contact us with any questions about this case or any other matter you see addressed in the Insurance Coverage Blog.

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