PREFERRED MARKETING, INC., d/b/a BROKEN ARROW WEAR, Plaintiff-Appellant,
LE MARS INSURANCE COMPANY, Defendant-Appellee.
from the Iowa District Court for Polk County, David Porter,
insured appeals the district court's grant of summary
judgment in favor of the insurer, wherein the court found the
insured's business owners insurance policy's two-year
limitations period barred the insured's suit.
E. Brick of Brick Gentry, P.C., West Des Moines, for
Charles Lapierre and Ryland Deinert of Klass Law Firm,
L.L.P., Sioux City, for appellee.
Considered by Vogel, P.J., and Doyle and McDonald, JJ.
Marketing, Inc. (Preferred) appeals the district court's
grant of summary judgment in favor of Le Mars Insurance
Company (Le Mars). Preferred contends the district court
erred in finding its suit against Le Mars was barred by the
two-year limitations period contained in the insurance policy
issued to Preferred by Le Mars. We affirm.
Background Facts and Proceedings.
2013, a lightning strike damaged computer equipment owned by
Preferred. Preferred filed a claim with its insurer, Le Mars.
Le Mars paid a portion of the claim. A dispute arose, and Le
Mars declined to make any additional payments on the claim.
On February 10, 2016, Preferred filed suit against Le Mars
seeking, among other things, compensation for damages related
to Preferred's business interruption, restoration costs,
and loss of profits resulting from the lightning strike.
answered and subsequently filed a motion for summary
judgment. Le Mars asserted it was entitled to summary
judgment in its favor because Preferred failed to file its
lawsuit within the policy's two-year limitations
period. Preferred resisted the motion. Though it
admitted the policy did contain a two-year limitations
period, Preferred claimed Le Mars "never disclosed the
limitation period to [Preferred] when entering into the
policy, " Le Mars did not include the limitation period
"in the declarations or renewal documents, " Le
Mars did not inform Preferred of the contractual limitation
period after Preferred submitted its loss claim, and when Le
Mars refused to make any additional payments under the
policy, it never informed Preferred that it had two years
from the date of the loss to file a lawsuit. Preferred
asserted Le Mars violated its obligation to "fully
disclose" all provisions of the policy and should be
barred from asserting the limitation as a defense. Preferred
also contended that because the two-year limitation period in
the policy did not "line up" with the five-year
statutory-limitation period for injuries to property,
see Iowa Code § 614.1(4) (2016), the
policy's limitation period was unreasonable. Preferred
also argued the limitations period was unreasonable because
Preferred had no opportunity to negotiate the limitation with
a hearing, the district court entered its ruling granting Le
Mars's motion. The court found the policy contained the
two-year limitations period, and Preferred was therefore
bound by the contract even if it did not expressly accept all
of the contract provisions or was unaware of them.
Additionally, the court concluded that, "[d]espite
indulging in every legitimate inference the evidence"
would bear, none of the factors contributing to a finding of
unconscionability in the bargaining process, "nor any
other fact provided by the parties, indicate the bargaining
process or any part of the policy [was] unconscionable."
The court found nothing "bizarre or oppressive"
about the shortened two-year policy limitation. The court
also determined, insofar as the policy was a contract of
adhesion, Preferred "failed to satisfy its burden to
prove the reasonable expectation doctrine." Since
Preferred was required to file its suit against Le Mars
within two years after the date of its loss and it failed to
do so, the court granted summary judgment in favor of Le
Preferred filed a motion to amend or enlarge the district
court's ruling pursuant to Iowa Rule of Civil Procedure
1.904(2). It argued
the Court neglected to [make] findings on [Preferred's]
argument that [Le Mars's] failure to disclose or provide
notice of the contractual limitation period in the policy
acts to prevent [Le Mars] from relying on such pertinent
provision of the policy in order to avoid liability under or
dismiss [Preferred's] claims.
Iowa Administrative Code rule 191-15.41(1) (2013), Preferred
argued that when a claim is presented, property and casualty
insurers in Iowa "shall fully disclose to first-party
claimants all pertinent benefits, coverages or other
provisions of a policy or contract under which a claim is
presented." Preferred asserted
[Le Mars] never disclosed the contractual limitation period
to [Preferred] when entering into the policy. Furthermore,
the contractual limitation period was not included in the
declarations or renewal documents. Further and most
importantly, when [Preferred] submitted [its] claim for the
current loss, [it] was not informed of the contractual
limitation period. Finally, when [Le Mars] rejected any
additional payments under the policy, [Le Mars] never
informed [Preferred] that [it] had two years from the date of
the loss to file [its] lawsuit. [Le Mars] never disclosed the
claim limitation of the policy once the claim was made by
[Preferred], and as such, violated its obligation to
"fully disclose" all pertinent provisions of a
policy under which a claim is presented.
argued Le Mars was equitably estopped from now asserting the