Opinion ID: 2752586
Heading Depth: 2
Heading Rank: 2

Heading: Timeliness of the Suit

Text: The Chubb Defendants argue that the Strausses filed their suit too late, past either a statutory deadline or a time limit imposed by the Policy. Wis. Stat. § 631.83(1)(a) provides that “[a]n action on a fire insurance policy must be commenced within 12 months after the inception of the loss.” The phrase “fire insurance” has been interpreted to include all types of property indemnity insurance. Jones v. Secura Ins. Co., 249 Wis.2d 623, 638 N.W.2d 575, 577 n.5 (2002); Borgen v. Econ. Preferred Ins. Co., 176 Wis.2d 498, 500 N.W.2d 419, 421 (Wis. Ct. App. 1993). But this statute of limitations is not absolute; parties to an insurance contract are free to alter the length of a statute of limitations and the date that the limitation period begins to run. See Keiting v. Skauge, 198 Wis.2d 887, 543 N.W.2d 565, 567 (Wis. Ct. App. 1995) (“Public policy in this state permits parties to bind themselves by contract to a shorter period of limitation than that provided for by statute.”) (quoting State Dept. of Pub. Welfare v. Le Mere, 19 Wis.2d 412, 120 N.W.2d 695, 699 (1963)). This conclusion is bolstered by the fact that § 631.83 explicitly prohibits insurance policies from (a) limiting the time for beginning an action on a policy to less than twelve months, (b) prescribing what court an action may be brought in, and (c) providing that no action may be brought under a policy. Wis. Stat. § 631.83(3). Accordingly, by its very terms, the statute contemplates its modification between 16 No. 13-2580 parties in private contracts, provided any alterations comport with the three prohibitions listed above. Just as policy language determines how coverage is triggered, policy language also dictates when an action may be brought. The Chubb Defendants altered the limitation period for the Strausses to initiate suit by diverging from the language found in § 631.83(1)(a). The Wisconsin statute of limitations language stating that a claim must be filed within one year “after the inception of the loss” starts the clock running “from the date of the damage suffered by the insured from any peril covered by the policy of insurance.” Riteway Builders, Inc. v. First Nat’l Ins. Co. of Am., 22 Wis.2d 418, 126 N.W.2d 24, 26 (1964). “Inception” means “beginning; start; commencement,” and therefore, “the phrase ‘inception of the loss’ rules out a construction which would postpone the start of the period of limitation until the insured’s loss is discovered, or should have been discovered.” Borgen, 500 N.W.2d at 422. Here, if the Policy employed the same language as that found in § 631.83, the Strausses’ claim might be time-barred because it was filed well after one year had passed from the beginning of the water infiltration. But the Policy employs different language. Rather than require claims to be filed within one year “after the inception of the loss,” the Policy permits claims to be filed “within one year after a loss occurs.” “After a loss occurs” is fundamentally different from “after the inception.” “Inception of the loss” clearly and unmistakably means the beginning of damage, not to mention the fact that it has been unequivocally defined as such by Wisconsin courts. On the other hand, “after a loss occurs” is ambiguous as applied to a progressive loss and can No. 13-2580 17 entirely reasonably be interpreted to mean after a loss completes. See Wood v. Allstate Ins. Co., 21 F.3d 741, 744 (7th Cir. 1994) (“after the date of loss” could plausibly mean either the date on which a fire began or the date on which the fire was extinguished). Because Wisconsin subscribes to the contract tenet that ambiguities are to be construed in favor of coverage for the insured, Johnson Controls, 784 N.W.2d at 586, we conclude that the Strausses could have brought their claim at any point up until a year after the water infiltration damage halted. In Wisconsin, under the continuous trigger theory, a progressive loss “occurs continuously from exposure until manifestation.” Soc’y, 607 N.W.2d at 346. Here, because the loss was ongoing and occurred with each rainfall and because the Policy itself states that “[c]ontinuous or repeated exposure to substantially the same general conditions unless excluded is considered to be one occurrence,” the loss, for purposes of the statute of limitations, occurred all the way up until the damage manifested in October 2010. The parties do not dispute that the Strausses filed suit within one year of manifestation of the water infiltration. Therefore, their suit is timely.