Case Name: Raphael M. SCHEETZ, Selma M. Scheetz, Leo A. Lala, Jr., and Donna D. Lala, Appellants, v. IMT INSURANCE COMPANY (MUTUAL), Appellee
Court: Iowa Supreme Court
Jurisdiction: Iowa
Decision Date: 1982-09-29
Citations: 324 N.W.2d 302
Docket Number: 67130
Parties: Raphael M. SCHEETZ, Selma M. Scheetz, Leo A. Lala, Jr., and Donna D. Lala, Appellants, v. IMT INSURANCE COMPANY (MUTUAL), Appellee.
Judges: All Justices concur except UHLEN-HOPP, LeGRAND and McGIVERIN, JJ., who dissent and CARTER, J., who takes no part.
Reporter: North Western Reporter 2d
Volume: 324
Pages: 302–313

Head Matter:
Raphael M. SCHEETZ, Selma M. Scheetz, Leo A. Lala, Jr., and Donna D. Lala, Appellants, v. IMT INSURANCE COMPANY (MUTUAL), Appellee.
67130.
Supreme Court of Iowa.
Sept. 29, 1982.
Rehearing Denied Oct. 21, 1982.
Kevin P. Shea and Jane Spande, Cedar Rapids, for appellants.
James F. Pickens of Pickens, Barnes & Abernathy, Cedar Rapids, for appellee.

Opinion:
REYNOLDSON, Chief Justice.
In this case of first impression, we determine the applicable limitation period for a fire loss claim after the insurer has waived the one-year suit limitation provision of its standard fire policy.
The record before us reflects that defendant IMT Insurance Company had insured the Cedar Rapids house involved in this controversy since 1966. It was damaged or destroyed by fire December 18, 1974. An $8000 homeowner's insurance policy issued by IMT contained the following provision: Iowa Code section 515.138 requires that the above provision be contained in a fire policy-
No suit or action on this policy for the recovery of any claim shall be sustainable in any court of law or equity unless all the requirements of this policy shall have been complied with, and unless commenced within twelve months next after the inception of the loss.
Following this loss, these plaintiffs and their lawyer negotiated with IMT for settlement. IMT's August 21, 1975, letter to the owners offered $5000. This was rejected; the owners were demanding $8000.
December 17, 1975, one day short of the expiration of the twelve-month period, IMT's attorney wrote a letter to the owners' lawyer, raising the offer to $5500. Apparently this offer also was rejected, and by letter dated February 13, 1976, IMT withdrew it, stating "we will not be making any new offer of settlement." The owners retained new counsel. By letter dated August 31, 1976, this lawyer inquired whether IMT would pay $6000. Although there is some suggestion the claim subsequently was "still in negotiation," the owners did not bring this action until January 11,1979.
IMT filed motion for summary judgment, urging the one-year policy limitation on suit. The owners, resisting, alleged that by the above negotiations IMT either waived the contractual provision or was estopped from asserting it. At trial and on appeal IMT concedes the provision may have been waived, but nonetheless argues the one-year contractual provision would still bar the action because the period should be deemed to have commenced not later than its letter of February 13, 1976, which it asserts terminated settlement negotiations. The owners argue that when the contractual limitation was waived, the ten-year period provided by Iowa Code section 614.1(5) controlled, that being the time fixed by the legislature as reasonable for bringing suit on a written contract.
District court held there was "no evidence" of estoppel, that "[f]or purposes of this ruling, . [defendant [IMT] did waive the twelve month . . . [limitation]"; that the waiver extended the time for the owners to file suit only by another year; and that "under no circumstances . could the . . time have extended to . . when the Plaintiffs did file their action." We reverse and remand for trial.
I. We first explore the doctrine of waiver as developed by this court. We have defined waiver as "the voluntary or intentional relinquishment of a known right." Travelers Indemnity Co. v. Fields, 317 N.W.2d 176, 186 (Iowa 1982). Waiver can be shown by the affirmative acts of a party, or can be inferred from conduct that supports the conclusion waiver was intended. Continental Casualty Co. v. G. R. Kinney Co., Iowa, 258 Iowa 658, 660, 140 N.W.2d 129, 130 (1966). When the waiver is implied, intent is inferred from the facts and circumstances constituting the waiver. Id.
The issue of waiver is generally one of fact for the jury, in particular where acts and conduct are relied upon as the basis for the waiver. Continental Casualty Co., 258 Iowa at 661, 140 N.W.2d at 130; Williams v. Stroh Plumbing & Electric, Inc., 250 Iowa 599, 602, 94 N.W.2d 750, 753 (1959) (question of fact whether failure to respond to monthly billing statements constituted waiver of right to offset claim against account billed); see Iowa Grain v. Farmers Grain and Feed Co., 293 N.W.2d 22, 25 (Iowa 1980) (fact issue whether commodity account holder's response to margin calls waived prior breach by broker); Pond v. Anderson, 241 Iowa 1038, 1041, 1044, 44 N.W.2d 372, 374, 376 (1950) (jury question whether disputed phone conversations constituted waiver); cf. Travelers Indemnity Co. v. Fields, 317 N.W.2d at 186 (fact issue where evidence raises question of voluntariness of act purported to constitute waiver).
When the evidence is undisputed, however, the issue is one of law for the court. Continental Casualty Co., 258 Iowa at 661, 140 N.W.2d at 130; Williams, 250 Iowa at 602-03, 94 N.W.2d at 753.
Analyzing the facts of this appeal in light of these principles, it must be conceded that IMT knew the terms and provisions of its policy, including the limitation that the insured must sue "within twelve months next after the inception of the loss." Under the decisions above cited, our attention is not focused on the actions, conduct or subjective intentions of the owners, but on those of IMT. It is unnecessary, in order to constitute a waiver, that the facts be such as would support a plea of estoppel. Briney v. Tri-State Mutual Grain Dealers Fire Insurance Co., 254 Iowa 673, 684, 117 N.W.2d 889, 895 (1962). The essential elements of a waiver are the existence of a right, knowledge, actual or constructive, and an intention to relinquish such right. Perkins v. City National Bank of Clinton, 253 Iowa 922, 935, 114 N.W.2d 45, 52 (1962). It is clear to us as a matter of law, as it was to trial court, that when IMT carried the negotiations through the end of the twelvemonth period it could have had no other intent than to relinquish its contractual right to limit suits to that period. There remains the issue of the duration of that waiver.
II. At the bottom of IMT's rationale is the unwarranted conclusion that an insurer's waiver of the contractual period of limitation inevitably expires in some manner. One might hypothesize estoppel situations in which that result would follow, but there is no support in our case law for an insurer to repudiate a valid waiver of a contractual provision. Our decisions make it clear that suit clauses in insurance policies may be waived by the insurer. Jerrel v. Hartford Fire Insurance Co., 251 Iowa 816, 824-25, 103 N.W.2d 83, 88-89 (1960); Bish v. Hawkeye Insurance Co., 69 Iowa 184, 187, 28 N.W. 553, 555 (1886). A waiver of a contract right by an insurance company is an election not to take advantage of a technical defense and should be looked upon with liberality. Briney v. Tri-State Mutual Grain Dealers Fire Insurance Co., 254 Iowa at 684, 117 N.W.2d at 895.
A thoughtful analysis of the distinction between an estoppel and waiver in this regard is found in Gilbert v. Globe & Rutgers Fire Insurance Co. of New York, 91 Or. 59, 67, 178 P. 358, 358 (1919):
[W]e may well keep in mind the somewhat elusive distinction between waiver and estoppel as illustrated in Kimball v. Horticultural Fire Relief, 79 Or. 133, 154 P. 578, a distinction which appears to be that a "waiver" is a voluntary relinquishment of a known right, while an "estop-pel" consists of a preclusion which in law prevents a party from alleging or denying a fact in consequence of his own previous act, averment, or denial. Hence, if a party relinquishes a known right, awarded him by contract, he cannot without the consent of his adversary, reclaim it. But the ban of an estoppel may be lifted by the party against whom it is invoked, by the giving of proper notice.
(Emphasis added.) See Hemmings v. Home Mutual Insurance Association of Iowa, 199 Iowa 1311, 1319, 203 N.W. 818, 821 (1925) ("A waiver, though without consideration, cannot be retracted."); McDonald v. Equitable Life Assurance Society of the United States, 185 Iowa 1008, 1020, 169 N.W. 352, 356 (1918); Mettner v. Northwestern National Life Insurance Co., 127 Iowa 205, 213, 103 N.W. 112, 115 (1905) ("It [insurance company] contends that while waiver might, perhaps, be found from the facts we have recited, yet, as it was without consideration, it might be retracted.... But this is manifestly unsound."); Home Fire Insurance Co. v. Kuhlman, 58 Neb. 488, 490, 78 N.W. 936, 936 (1899) ("The election to waive being once made, it would be irrevocable, it could not be recalled.").
Under the rule enunciated by these authorities, IMT's waiver could not be recalled, and of course did not expire through any other theory known to our law. It follows the general statute of limitation that applies to all other written contracts, Iowa Code section 614.1(5), was applicable. Whitaker v. Illinois Medical Service, 7 Ill. App.3d 764, 767, 288 N.E.2d 631, 633 (1972); Turner v. Bankers & Shippers Insurance Co. of New York, 187 So. 122, 126 (La.Ct.App.1939). The summary judgment motion should have been overruled.
III. The rule we adopt here is not followed by all jurisdictions. The split of authority has been catalogued. See Annot., 29 A.L.R.2d 636 (1953). Most of the decisions reaching a different result are bottomed on estoppel, not waiver. Some, like Peloso v. Hartford Fire Insurance Co., 56 N.J. 514, 267 A.2d 498 (1970), involve an outright denial of liability, not a dispute over the amount of the loss. Still others turn on esoteric and theoretical concepts of "inception of the loss," a device this court rejected in Olson Enterprises, Inc. v. Citizens Insurance Co. of New Jersey, 255 Iowa 141, 147, 121 N.W.2d 510, 513 (1963) ("inception of loss" is date of fire or casualty insured against).
Of the decisions reaching a different result, some impose a "reasonable time" rule, others, like Peloso, toll the one-year limitation "from the time an insured gives notice until liability is formally declined." Peloso, 56 N.J. at 521, 267 A.2d at 501. One problem with both rules is that they inject an unacceptable degree of unpredictability into determination of the limitation period applicable to such cases.
Under the "reasonable time" rule each case generates its own fact issue for ad hoc resolution. The Peloso rule spawns similar problems. The facts of the instant case are illustrative. Under Peloso the contractual period of limitation would have recommenced running when the insurer formally declined liability. Peloso, 56 N.J. at 520-21, 267 A.2d at 501-02. But IMT did not notify the owners it was declining liability. It merely terminated its offer and, at the most, failed to respond to further inquiries. The owners accordingly were faced with the Hobson's choice of immediately commencing suit and perhaps foregoing potentially fruitful further negotiations, or pursuing further negotiations (as they did) at risk of IMT's subsequent assertion of the limitation period. The Peloso rule thus burdens policyholders with the risk of determining when denial of liability has occurred. Application of the general statute of limitation would avoid this problem of predictability.
Finally, as a matter of public policy, it may be feared that the rule we here adopt will cause insurers to hastily terminate negotiations at the zero hour, leaving the insureds insufficient time to commence action within the twelve-month period. That case is not before us. Other jurisdictions have held, however, that the limitation also is waived if an unreasonably short time for bringing suit remains out of the prescribed period after the insurer has ceased to hold out inducements such as to delay filing of the action. See Friedberg v. Insurance Co. of North America, 257 Mich. 291, 294, 241 N.W. 183, 184 (1932); 46 C.J.S. Insurance § 1264, at 288 n.46 (1946); Annot., 29 A.L. R.2d 636, 645 n.7 (1953).
We hold the contractual suit limitation period was waived by IMT and that this waiver cannot be retracted. The general limitation statute governing written contracts applies. We reverse the summary judgment entered by district court and remand for trial.
REVERSED AND REMANDED.
All Justices concur except UHLEN-HOPP, LeGRAND and McGIVERIN, JJ., who dissent and CARTER, J., who takes no part.
. IMT's brief states, "Unquestionably, [the attorney's] letter of December 17, 1975, could operate as a waiver of the period of limitations which otherwise would have run the next day. Trial court so held, and understandably so."
. There is, of course, precedent in our case law for notice of termination of a course of dealing that might result in a waiver of future duties imposed upon a contracting party. But these cases do not approve a withdrawal of a waiver with respect to past obligations. See Dunn v. General Equities of Iowa, Ltd, 319 N.W.2d 515, 517 (Iowa 1982); Bettis v. Bettis, 228 N.W.2d 193, 195-96 (Iowa 1975).