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Volume XXVI, No. 2, January 10, 2014   

From the Law Offices of Garan Lucow Miller, P.C.

From the Editor: Sarah Nadeau 

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 Proof of Loss Requirement Was Not Waived by the Insurer’s Actions

CONTRIBUTOR – SARAH NADEAU

 

The Michigan Court of Appeals recently addressed the question of whether, and how, an insurer may waive its clear, unambiguous policy provision requiring its insured to provide a written, signed, sworn proof of loss to his insurer within 60 days of the insured’s loss.

In Salmo v Memberselect Insurance Company (Unpub., COA No. 310738, 12/12/13), defendant’s insurance policy contained a clear, unambiguous provision requiring its insured to submit a written, signed, sworn proof of loss within 60 days of the insured’s loss.  Plaintiff failed to provide a written, signed, sworn proof of loss within the 60 day period, but argued that defendant waived the requirement by its actions.  The Court of Appeals disagreed.

Plaintiff first argued that defendant waived this proof of loss provision where defendant provided plaintiff with a letter shortly after the loss indicating that defendant would assist plaintiff in preparing the inventory of his personal property and estimating the damage to his home.  The Court noted that the letter also made clear that defendant had not accepted or rejected the claim and was still investigating, and specifically noted that all “….rights and defenses are not to be deemed waived in any way.”

Plaintiff further argued that defendant waived the proof of loss requirement where defendant’s agent informed plaintiff that he had sufficient information to evaluate plaintiff’s claim.  The Court found this statement did not support waiver where, even assuming defendant had enough information to evaluate the value of the claim, defendant had many other interests to protect through the proof of loss requirement. The proof of loss would assist defendant in determining questions of liability, including issues of fraud or whether the claim was excessive. A statement that defendant had enough information to determine the value of a claim does not lead to a conclusion that defendant voluntarily relinquished a known right, as defendant had other interests to protect through the proof of loss requirement.

Plaintiff argued that defendant waived the proof of loss requirement by not specifically rejecting plaintiff’s unsigned proof of loss form.  The Court found that none of defendant’s actions regarding plaintiff’s claims were inconsistent with defendant’s right to deny liability.  Finally, plaintiff argued that defendant waived the proof of loss requirement by paying for plaintiff’s temporary housing for a period of four to six weeks one year after the loss.  The Court found this was not evidence of waiver because whether defendant paid plaintiff’s living expenses one year after the loss had no relevance as to the question of waiver.  Plaintiff had an obligation to provide a written proof of loss within 60 days of the loss.  After that 60-day period expired, defendant’s corresponding right to receive the proof of loss concluded, and defendant no longer had the right to waive.

The Court of Appeals concluded that defendant need not suffer prejudice as a result of plaintiff’s failure to comply with the proof of loss requirement.  Thus, the Court held that defendant was entitled to summary disposition where plaintiff failed to comply with the proof of loss requirement provided for in defendant’s policy.