The opinion of the court was delivered by: BECHTLE
Before the Court is defendant's motion to dismiss plaintiffs' complaint for failure to state a claim upon which relief can be granted. Resolution of the motion depends upon the interpretation to be given a limitation of action clause contained in the insurance contract upon which this diversity suit is based.
Unlike the meaning of the clause in question, the facts relevant to a determination of the motion are both clear and undisputed. On January 14, 1971, defendant executed Special Floater Policy No. IF4664731 which, effective April 14, 1971, insured General Instrument Corporation and its subsidiary and/or affiliated companies for the period from November 29, 1970, to November 29, 1973. Jerrold Electronics Corporation is a subsidiary and/or affiliated company of General Instrument.
On June 22, 1972, as a result of a devastating rain storm, known as Hurricane Agnes, property belonging to Jerrold was both damaged and destroyed at its location in Conshohocken, Pennsylvania. In due course, Jerrold filed a Proof of Claim with the defendant to recover under the policy for the damage resulting from this storm. To this date, defendant has failed and refused to make payment upon this claim as requested by plaintiffs.
Suit Against Company: No suit, action or proceeding for the recovery of any claim under this policy shall be sustainable in any court of law or equity unless the same be commenced within twelve (12) months next after discovery by the Assured of the occurrence which gives rise to the claim. Provided, however, that if by the laws of the State within which this policy is issued such limitation is invalid, then any such claim shall be void unless such action, suit or proceeding be commenced within the shortest limit of time permitted by the laws of such State to be fixed herein.
The second limitation provision is included in the "Difference in Conditions" endorsement which is attached to and forms part of the policy in question. That provision states:
SUIT AGAINST THE COMPANY: No suit or action on this policy for the recovery of any claim shall be sustainable in any court of law or equity unless the Assured shall have fully complied with all the requirements of this policy, nor unless commenced within twelve (12) months next after the happening becomes known to the Assured's Home Office Insurance Department, unless a longer period of time is provided by applicable statute.
The complaint in this action was filed on December 20, 1974. Defendant argues that the suit is barred as a matter of law since it was not commenced until approximately two years and six months after the date of the loss and discovery of the same by plaintiffs. Defendant's position is correct if the contractual time limitation for filing suit is applicable in the instant case. For the reasons stated below, we hold that the contractual limitation is not applicable here.
Preliminarily, we note that the parties correctly agree that this motion to dismiss for failure to act within the limitations period, filed pursuant to Fed.R.Civ.P. 12(b)(6), is a proper one. It is unnecessary for the Court to go beyond the pleadings in order to dispose of the question raised by the motion. Patitucci v. United States, 178 F. Supp. 507, 509 (E.D.Pa. 1959).
Defendant also does not contest the proposition, which this Court accepts, that it is the language of the second limitation provision, contained in the "Difference in Conditions" endorsement, which must serve as the basis for deciding the validity of this motion. Any other conclusion would be difficult to reach in light of the final clause in the endorsement, which reads: "CONFLICT OF WORDING: The conditions contained in this form shall supercede those of the basic policy to which this form is attached wherever the same may conflict." The clear differences in wording of the two provisions mandate the use of the provision found in the endorsement.
The basic point of contention between the parties is the interpretation to be given the proviso in the endorsement's limitation provision, which states that suit must be brought within one year "unless a longer period of time is provided by applicable statute." While defendant concedes that the wording of the endorsement provision is different from that of the limitation condition in the standard policy, defendant asserts that the meaning of the two provisions is identical. Its position is that the phrase "applicable statute" refers only to a statute which specifically invalidates limitation of action clauses in all-risk insurance policies, or requires that a longer period of time than twelve (12) months be provided in which to file suit. In contrast, plaintiffs argue that a general statute of limitations for contract actions is an "applicable statute" which must take precedence over the contractual limitation.
The parties have not cited, and the Court's research fails to reveal, any specific Pennsylvania
statute directed at limitation clauses contained in all-risk insurance policies. Thus, unless the general six-year statute of limitations for contract actions, 12 P.S. § 31, is an "applicable statute" within the meaning of the policy condition, the instant suit must be dismissed. There is no question that the statutory limitation on contract actions is generally applicable to suits based on ...