In two recent decisions – Longchamps v. Allstate Property & Casualty Insurance Co., Civil Action No. 13-1704 (JDB), 2015 WL 1969778 (D.D.C., May 4, 2015) and Taylor v. Allstate Insurance Group, No. 2:15-cv-00030-SAB, 2015 WL 2083453 (E.D. Wash., May 5, 2015) – federal district courts dismissed policyholder actions based upon contractual provisions requiring policyholders to bring coverage actions within one year of a loss. 

In Longchamps, the court concluded, under District of Columbia law, that the limitation provision in a homeowner’s policy barred the policyholder’s lawsuit seeking appointment of an umpire to resolve the parties’ dispute over the valuation of the policyholder’s claim for damage resulting from a June 2012 storm.  Longchamps, 2015 WL 1969778, at *1.  The court rejected the policyholder’s argument that the one-year contractual limitations period began running at the time the property suffered further damage from a subsequent storm occurring several months later.  Id. at **3-5.  It noted that the policyholder’s complaint did not mention the later storm, the policy at issue required that suit be brought within one year of the “inception” of the loss, and the parties’ actions did not suggest that either treated damage from the two storms as a single loss.  Id. 

The court also rejected the policyholder’s argument that it thought no legal action was necessary by the contractual deadline.  The court stated that there was “no provision in the contract that extends (or pauses) the one-year clock based on [the policyholder’s] subjective beliefs about the necessity of litigation.”  Id. at *5.  It added that its job was “to interpret the contract’s words, not to rewrite the contact to suit one party’s interests.”  Id.  The policyholder next argued that he could not have brought suit sooner because he had not yet complied with all of the terms of his insurance contact – specifically, the terms regarding the completion of the appraisal-demand process before filing suit. Id. at *6.  The court noted that, while the policy required compliance with its mandatory terms before the policyholder could bring suit, the appraisal process was not mandatory, but was an alternative dispute mechanism that could be invoked at either party’s option.  Id.  Thus, the parties’ ongoing appraisal negotiations did not excuse the policyholder’s tardiness.  Id.

As in Longchamps, the court in the Taylor case found that a contractual limitation provision justified summary judgment in favor of the insurer.  Taylor, 2015 WL 2083453 at *4.  After the policyholder inTaylor brought suit against the carrier seeking recovery under a homeowner’s policy, the carrier raised the defense that the suit was untimely under the policy’s contractual limitation provision.  Id. at *2.  In reply, the policyholder asserted that the carrier was equitably estopped under Washington law from raising the limitations provision as a defense.  Id. at **2-3.  The court disagreed, noting that the insurer had closed one claim and stopped making payments on the other over three years prior to the policyholder bringing suit.  Id. at *4.  The court found that there was nothing in the record to give the policyholder any indication that the claim was still open for further consideration.  Id.  Accordingly, it held that equitable estoppel did not apply, and the limitations provision barred the policyholder’s lawsuit.  Id. at **3-4. 

The Longchamps and Taylor decisions add to the long line of cases requiring that unambiguous insurance policy language be enforced, and show that, absent situations establishing estoppel or waiver, summary judgment may be granted to an insurer based on a policyholder’s failure to comply with policy provision requiring suit within a specified period following the inception of a loss.