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Leone v. Aetna Casualty & Surety Co.

decided as amended june 25 1979.: June 8, 1979.

JOSEPH LEONE, JR., APPELLANT,
v.
THE AETNA CASUALTY & SURETY COMPANY, APPELLEE



APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA (D.C. Civil No. 77-4163)

Before Gibbons and Hunter, Circuit Judges, and Meanor,*fn* District Judge.

Author: Meanor

Opinion OF THE COURT

This is an appeal from a judgment which granted defendant Aetna's motion to dismiss the complaint upon the ground that it was barred by the twelve month suit limitation clause contained in the Pennsylvania statutory fire insurance policy. 40 P.S. § 636(2). Leone v. Aetna Life & Cas. Co., 448 F. Supp. 698 (E.D.Pa.1978).

Plaintiff's verified complaint was filed in the Philadelphia Court of Common Pleas on November 16, 1977. Following removal to the district court, Aetna, without filing an answer, moved to dismiss for failure to state a claim upon which relief could be granted pursuant to Rule 12(b)(6), Fed.R.Civ.P.

The complaint seeks recovery on a fire policy. It alleges that on April 30, 1976, Aetna issued to plaintiff's assignor a two month binder of insurance with fire coverage in the amount of $150,000. On May 15, 1976, fire damage was incurred in the amount of $128,043.14. Aetna was duly notified and on June 22, 1976 proofs of loss were filed. Aetna investigated the loss, and, on November 30, 1976, in writing, notified plaintiff "that there is no claim which is compensable under the terms and conditions of the policy of insurance which you have made claim under."

It is essential to emphasize at the outset that we are dealing with a judgment entered on the face of the complaint without affidavits and without discovery. It is the settled rule that "a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S. Ct. 99, 102, 2 L. Ed. 2d 80 (1957). See also Cruz v. Beto, 405 U.S. 319, 322, 92 S. Ct. 1079, 31 L. Ed. 2d 263 (1972).*fn1 The question to be answered thus becomes whether the assertions of the complaint, given the required broad sweep, would permit adduction of proofs that would provide a recognized legal basis for avoiding the statutory bar.

The complaint, in paragraph twelve thereof, states the following:

On or about October 12, 1976, Defendant, by its duly authorized agent, did advise Plaintiff and Plaintiff's agent that Defendant was continuing to investigate the cause of said loss, because Defendant had reason to believe that the loss incurred was caused by the wilfull (sic) act of Plaintiff, which allegation Plaintiff then and there denied, but which Defendant continued thereafter to allege, despite continued denial by Plaintiff.

The primary reliance of the district court was upon Lardas v. Underwriters Insurance Co., 426 Pa. 47, 231 A.2d 740 (1967). Lardas, standing alone, does support the result below. However, we find that Diamon v. Penn Mutual Fire Insurance Co., 247 Pa.Super. 534, 372 A.2d 1218 (1977), when read in light of paragraph 12 of the complaint, requires reversal.

In Diamon, The court reversed a grant of summary judgment in favor of an insuror which had been based upon the twelve month suit limitation clause of the Pennsylvania standard fire insurance policy. 40 P.S. § 636(2). Diamon involved two bases upon which the insured there was given an opportunity to avoid the impact of the limitation clause. We find that one of those theories is applicable to this complaint as we read it.

In Diamon, the insured was prosecuted at the insuror's instance for filing a false proof of loss. The precise contention was that the insured had removed furniture from his home before the fire, but had claimed destruction of the furniture as a loss thereafter. Following conviction, the insured dug up burned remnants of the furniture and was granted a new trial. The district attorney was then given leave to enter a Nolle prosequi. The insured waited until the end of the five year criminal statute of limitations and then brought suit on his fire policy.

The Superior Court held that the insuror's mistaken charge of criminal liability tolled or suspended the twelve month suit limitation clause. The court was unable to say on the record before it whether events had transpired that would again start the running of the limitation period. That issue was left for exploration upon remand.

The question arises whether, under Diamon, an insuror's good faith but erroneous charge of criminal conduct will suffice to toll the limitation period when there is no initiation of a criminal proceeding. On this issue we come to the conclusion that a good faith charge of criminal conduct will not toll the limitation period unless a criminal action is begun. We base this upon the Diamon Court's handling of Abolin v. Farmers American Mutual Fire ...


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