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Equitable estoppel or estoppel in pais has frequently been asserted in insurance litigation. Hetchler v. American Life Ins. Co., discussed in the principal case, is illustrative. In most cases, the doctrine has been used to prevent the insurer from insisting on conditions that result in forfeiture. For example, suppose that A, who has suffered a fire loss, has a fire policy that calls for proof of loss within 60 days. On the third day after the loss, A asks for an extension of 10 days in order to go on a trip. His request is granted. The insurance company would likely be estopped from insisting on the condition of proof of loss within 60 days after the 60 days has run. But suppose the company remains silent and A allows the 60 days to expire, relying on the extension. Is the company bound? Suppose that one day after the 60-day period has expired A, who has not previously asked the company for an extension, files proof of loss and a duly authorized agent of the company informs A that he should forget about the delay — is the company bound to pay?
Most courts refuse to apply equitable estoppel when the insured is attempting to expand coverage that was not provided for or was excluded in the contract. Ahnapee & Western Ry. Co. v. Challoner, 34 Wis. 2d 134, 148 N.W.2d 646 (1967). At least one court, however, has imposed liability on an insurance company for representing to the insured that he was covered under his policy, when in fact he was not. See Travelers Indemnity Co. v. Holman, 330 F.2d 142 (5th Cir. 1964), where the court, while acknowledging that equitable estoppel did not apply, held that the facts of the case "exactly fit the mold of §90."
June 02, 2014
184.108.40.206 Notes - Capital Savings & Loan Assn. v. Przybylowicz
Kessler, Gilmore & Kronman
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