In Brockway v. Allstate Property & Casualty Insurance Co., 284 Or. App. 83, 391 P.3d 871 (2017) the Oregon Court of Appeals upheld a suit limitation clause in Allstate’s policy thereby upholding the dismissal of the insured’s claim against Allstate. The Brockway case involved a first-party property homeowners claim in which the homeowners sought coverage for a hole that was cut into the insured’s backyard fence and associated stolen personal property. During Allstate’s investigation of the claim, the Brockways/homeowners asserted that they discovered additional losses from the fence episode. A year following the loss Allstate requested from the Brockways a sworn proof of loss and advised them regarding the statute of limitations on their claim as per the policy’s suit limitation clause. Allstate also advised the Brockways that it had done nothing in the handling of their claim that could result in an estoppel or waiver of any coverage defense. In February 2012 Allstate denied coverage for the claim, asserting misrepresentation, noncooperation, and the passage of time. Thereafter the Brockways filed suit against Allstate. In the lawsuit the Brockways alleged that Allstate’s continuing investigation estopped it from relying on the statute of limitations set forth in the policy suit limitation clause (“SLC”).
Under Oregon law, an insurer is equitably estopped to assert a defense of limitations when the insurer affirmatively induces its insureds not to sue timely and the insureds reasonably relied on the insurer’s conduct to delay litigation. Reviewing the facts, the Oregon Court of Appeals found no evidence supporting the Brockways’ estoppel argument. The court noted that Allstate had specifically notified the Brockways of the SLC. Additionally, Allstate had disclosed to the Brockways its belief that it had done nothing the handling of the claim which would waive any coverage defense. Under those facts the court determined that no reasonable juror could conclude that Allstate had waived or was estopped to assert the SLC.