Civil Practice – Statute of Limitations – Equitable Estoppel – Homeowners’ Insurance – Rebuilding Claims

Bankaitis v. Allstate Insurance Co. (Lawyers Weekly No. 003-003-17, 11 pp.) (Loretta Biggs, J.) 1:16-cv-00146; M.D.N.C.

Holding: After plaintiffs’ home was destroyed by fire, defendant allegedly waited until the time for filing had expired to tell plaintiffs that they needed to file a separate claim for damage caused by contractor error. Plaintiffs’ allegations support the application of equitable estoppel to defendants’ statute of limitations defense.

The parties agree that plaintiffs’ unfair claims settlement practices cause of action will be dismissed. Otherwise, defendant’s motion to dismiss is denied.

Plaintiffs’ policy promised that the amount defendant would pay could be determined by “a. Reaching an agreement with you; b. Entry of a final judgment; or c. The filing of an appraisal award with us.” Therefore, the issuing of the appraisal award is not a condition precedent to the filing of a lawsuit. Under the terms of the policy, plaintiffs could have initiated a lawsuit against defendant once it was determined that the parties disagreed over the loss. Plaintiffs have provided no North Carolina authority for their argument that participation in, or completion of, an appraisal (an arbitration-like process) has any impact on the applicable statutory or contractual limitations for them to file an action.

However, plaintiffs allege that defendant was aware in October 2012 that plaintiffs’ claim of damages included alleged damages caused by contractor error. Despite this awareness, plaintiffs contend that defendant concealed from them its intent to deny coverage for the alleged contractor damages absent submission of a separate claim. After plaintiffs raised their concern with defendant that excluding the contractor damages from the appraisal was improper, plaintiffs assert that defendant informed them for the first time in March 2015 that a separate claim was required for those damages. By that time, according to plaintiffs, the statute of limitations had run on Jan. 29, 2015.

Plaintiffs assert that defendant’s concealment of its intent to deny coverage absent submission of a separate claim was intended to induce plaintiffs to delay immediately invoking the appraisal process, filing a separate claim or commencing suit. They further assert that defendant was aware of its actions and its intent to deny coverage, that plaintiffs lacked such knowledge, and that they could not have discovered such information. Finally, plaintiffs contend that they relied on defendant’s concealment to their detriment in that they did not file suit or take other actions until after the statute of limitations had run.

Conduct that lulls a party into a false sense of security, causing that party to delay filing an action, is sufficient to support a claim of equitable estoppel. Plaintiffs have alleged sufficient facts to state a plausible claim of equitable estoppel.

Motion granted in part, denied in part.