latter. Both clauses are designed to permit the insurer an opportunity to investigate the nature and extent of the claim against it. Indeed, "late filing of a notice claim is not . . . 'wholly analogous' to late filing of proof of loss, as prejudice is more likely to result to an insurer which has no notice at all of a claim." Morningstar v. INA, 295 F. Supp. 1342, 1346 (S.D.N.Y. 1969).
We conclude that Pennsylvania law, as developed in Brakeman, requires an insurer to show prejudice before it can compel forfeiture by invoking a proof of loss or limitation of suit clause. Neither insurer has made such a showing here.
Plaintiff also argues that even if the insurers did suffer prejudice from the lack of timely notice or failure to comply with the suit limitation clause, the conduct of their authorized agent waived their right to raise those defenses. In support of its position, plaintiff points to the deposition of Angelo C. Ferri, president of ACF, who stated that Mr. Seeger had told him that he need not "worry about a time limit, when the investigation was through and the arrests made, then it would all be handled at that time." (Ferri Deposition at 34).
It is clear that an insurance company may waive the protections afforded it by the proof of loss and limitation of suit clauses. See Collins v. Home Insurance Co., 110 Pa.Super. 72, 167 A. 621 (1933) (limitation of suit); Philadelphia Auto Finance Co. v. Agricultural Insurance Co., 102 Pa.Super. 1, 156 A. 625 (1931) (proof of loss). To establish a waiver of such a policy term, "there must be some official act or declaration of the company during the time within which notice is required to be furnished, from which the insured may reasonably infer that the insurer does not mean to insist upon the terms of the policy." 19 Pennsylvania Law Encyclopedia at 247 (1959). The existence of such a waiver is a question of fact for jury determination. Philadelphia Auto Finance Co. v. Agricultural Insurance Co., supra, at 4.
The waiver "may be inferred from the acts of the insurer or its authorized representative." Collins v. Home Insurance Co., supra, at 75. It is well established that the power of the agent to waive protective provisions of the policy is limited by his grant of authority. The insurer will only be bound by the waiver of an agent acting within the scope of his actual or apparent authority. J. Appleman, Insurance Law & Practice, § 9121 (1968). Where there is a dispute over the authority of the agent to waive a policy term, the question is one of fact for the jury. Couch on Insurance 2d, § 26.313 (1960).
Pennsylvania cases have established that authority to waive a written notice of loss provision may be exercised by an agent who executed the policy and reported the losses to the insurer. Gough v. Halperin, 306 Pa. 230, 234-35, 159 A. 447 (1932). Here, plaintiff alleges that Seeger countersigned the policies, collected the premiums and constituted plaintiff's only contact with the defendant insurance companies. Under these circumstances, the scope of Seeger's authority is a question for the jury. We also conclude that there is a genuine issue of material fact with respect to whether his remarks amounted to a waiver, or at least a tolling of the proof of loss and limitation of suit provisions. Gough v. Halperin, supra at 235 ("The company cannot take advantage of the insured's inactivity caused directly by the assurance of its authorized agent"). Therefore, since genuine issues of material fact remain with respect to the scope of Seeger's authority and the effect of his alleged statements, plaintiff's failure to comply with the notice of loss and limitation of suit provisions does not entitle the defendants to summary judgment.
Fireman's contends that, even if plaintiff's recovery is not barred by its failure to comply with the time limitations in the policy, the loss sustained by plaintiff fell within three exclusion clauses of the excess policy.
Paragraph K4 of the excess policy specifically excluded coverage for losses resulting from "pilferage, appropriation or concealment of any property covered due to any fraudulent, dishonest or criminal act of any employee while working or otherwise." Plaintiff concedes that all but one of the thieves was an employee of ACF, but contends that the defendant's resort to this provision is barred by Seeger's representations at the time the policy was purchased. Plaintiff asserts that Seeger told the plaintiff that the policy provided complete coverage which was co-extensive with that of the basic policy. It is clear that the excess policy is at least in some ways more restrictive than the basic policy since the Federal policy does not contain any exclusion for employee theft.
In some circumstances, an insured may obtain reformation of a policy where he has relied upon the expertise and representations of the insurer to frame the coverage included in the policy. See J. Appleman, Insurance Law & Practice, § 9166 (1968); Couch on Insurance 2d, § 66:41 (1967). "Where a policy does not represent the intention of the parties solely because of some fault or negligence of the insurer, equity will reform it so as to make it express such intention." Id. § 66:42. "Where a mistake of an agent is relied on, it must be material to warrant reformation, or there must be a mistake of one party and fraud of the other." Id. § 66:43 (footnotes omitted). The contentions of ACF raise questions about the content and impact of any statements made by Seeger at the time that the policy was obtained. Answers to these questions must be left to the jury.
The second exclusion which Fireman's has invoked provides that the policy does not insure against any loss caused by or resulting from the "unexplained or mysterious disappearance of property . . . disclosed on taking inventory." However, since the losses are at least in part attributable to thefts by persons who have been arrested, the losses cannot be characterized as mysterious or unexplained. Summary judgment cannot be granted based upon this exclusion.
Finally, exclusion 4R denies recovery if the loss is the result of theft of property which is not inside a building at a location insured under the policy. Fireman's argues that the permanent trailers employed by the plaintiff as storage facilities cannot be classified as "buildings" within the policy. These permanent trailers, however, constitute the only storage facilities on the premises of the plaintiff and were clearly intended to be covered by the policy. The intent of the exclusion was to limit coverage for personal property left outdoors or in a vehicle of some sort. The trailers from which the meat was stolen are permanent structures which served to protect the property from the danger excluded by paragraph 4R. Since the trailers were buildings within the meaning of the policy, this exclusion does not preclude plaintiff from recovery.
In sum, since two of the exclusions are inapplicable and the effect of the third is a question of fact for the jury, we must deny Fireman's motion for summary judgment on Counts I and II.
Plaintiff has also made a claim for compensatory and punitive damages arising out of the settlement of a loss sustained on September 5, 1974. Plaintiff concedes that the specific claim for the lost property was settled by executing a release, but it contends that it has retained a cause of action against Federal for malicious and bad faith delay in settling the claim.
There is no question that an insurer is obligated to deal with its customer in good faith and that this obligation extends to the settlement of claims asserted against the insured. Defendant argues, however, that even assuming plaintiff has stated a cause of action it is barred by the release signed by plaintiff at the time of settlement. The release provided in pertinent part that Angelo C. Ferri, as president of ACF, in exchange for and in consideration of the payment of $28,000.00 "release, acquit and forever discharge Federal Insurance Company . . . and all other persons, firms, corporations from any and all claims, actions, causes of action, demands, rights, damages, costs, loss of service, expenses, and compensation whatsoever . . resulting . . . from the accident, casualty or event which occurred on or about the 5th day of September, 1974."
In the absence of fraud, accident or mistake, a person accepting a release for a claim is bound by the terms of the release. Long v. Heinberger, 195 F. Supp. 835 (M.D.Pa. 1961). The effect of the release is governed by the intention of the parties which is to be garnered from the language of the instrument. Three Rivers Motors Co. v. Ford Motor Co., 522 F.2d 885 (3d Cir. 1975). "The language of a release will be given its ordinary meaning unless a different meaning was clearly intended." Wenger v. Ziegler, 424 Pa. 268, 226 A.2d 653, 654 (1967).
The question presented by defendant's motion is whether plaintiff's claim for bad faith delay in settling the claim falls within "any and all claims, actions, causes of action, . . . damages, costs, loss of service expenses and compensation whatsoever . . . resulting from the accident . . . on . . . the 5th day of September, 1974." We find that it does. Plaintiff's claim is for damages sustained in the interim between the event and the settlement. The damage suffered during the delay was directly attributable to the accident of September 5, 1974 and simply should have been alleviated by a more prompt settlement. Thus the plaintiff is seeking damages for loss of service arising out of the incident. Any damages that plaintiff seeks to recoup were covered by the release. We also note that any loss caused by the delay was suffered prior to the execution of the release. Had plaintiff instituted an action for defendant's failure to pay promptly once the claim had been settled, we would have been presented with a different question. Finally, the comprehensive language employed in the release reflects the parties' intent to include any dispute relating in any way to the original loss.
We conclude that any claim for Federal's delay in settling the claim arising out of the events of September 5, 1974 was covered by the release. Therefore, we will grant defendant's motion for summary judgment on Count II.
NOW, March 28, 1978, upon consideration of the motions for summary judgment of Federal Insurance Co., Chubb/Pacific Indemnity Group, Chubb & Son, Inc., and Fireman's Fund Insurance Co., oral argument and memoranda submitted, IT IS ORDERED for the reasons stated in the accompanying Memorandum that:
1. The motions on Counts I and III are DENIED.
2. The motion on Count II is GRANTED.