The recent decision in Legend’s Creek Homeowners Association, Inc. v. The Travelers Indemnity Co. of America, 2021 WL 308180 (S.D. Ind. Jan. 29, 2021), is a reminder to all that there is nothing more important when it comes to an insurance claim than the suit limitation provision.
Legend’s Creek sustained damage as a result of a May 1, 2016 storm. On July 23, 2018, more than two years after the loss and damage, Legend’s Creek filed suit against Travelers for breach of contract and bad faith. Specifically, Legend’s Creek contended that it was owed replacement siding for the entirety of several buildings so that there would not be a mis-match.
In April 2020, at the behest of Legend’s Creek, the trial court ordered the parties to proceed to appraisal. The court, however, noted that by allowing the appraisal process it was not endorsing that the appraisal award would be binding, or that it would somehow moot Travelers’ legal defenses, which included Legend’s Creek’s failure to timely file suit.
The appraisal determined that Travelers owed more than $250,000 for additional actual cash value for covered damages. Travelers issued payment and five days later cancelled payment on the check when the court granted Travelers’ motion for summary judgment on the basis that Legend’s Creek had failed to comply with the policy’s two-year suit limitation provision and thus it had no right to relief under the contract.
Legend’s Creek moved for reconsideration of the court’s summary judgment ruling in part based upon the appraisal award. The court rejected each of Legend’s Creek’s arguments. Specifically, the court found that the outcome of the appraisal process did not alter the issue it was asked to reconsider – that is, whether equity supported waiver of the two-year limitation period. The court concluded that Travelers did nothing that would give Legend’s Creek a reasonable impression that it would not enforce the suit limitation provision. In fact, Legend’s Creek had in its possession information that it was going to request complete siding replacement but made the strategic decision to wait to make such a demand.
Any monetary disparity as reflected in the appraisal award did not go to the issue of whether Travelers acted in a way that intended to relinquish the limitations provision. As such, the court upheld its decision and reiterated its earlier decision that ordering the parties to appraisal did not endorse the appraiser’s fact-finding as binding and that Travelers still maintained its legal defenses.
