## Facts

- Gilbert (plaintiff) insured his beach cottage under a fire insurance policy issued by Globe & Rutgers Fire Insurance Co. (Globe) (defendant).
- The policy included a contractual limitation providing that any suit on the policy had to be brought within 12 months after a fire loss.
- In 1912, Gilbert’s cottage was destroyed by fire, and he promptly notified Globe of the loss.
- After the loss, Astoria Lumber Company, a third party, served a writ of garnishment in an effort to reach any insurance proceeds payable to Gilbert.
- Gilbert claimed that Shankland, Globe’s adjuster, told him Globe would pay the claim as soon as the garnishment proceedings were resolved.
- About one year after the fire, in 1913, Shankland informed Gilbert that Globe would deny the claim.
- Gilbert did not file suit on the policy until 1918, well beyond the policy’s 12-month suit period.
- The trial court ruled in Gilbert’s favor, and Globe appealed.

## Issues

1. Whether the policy’s clause barring any suit brought more than 12 months after the fire was valid and barred Gilbert’s action filed years after the loss.
2. Whether Globe, through the adjuster’s statements about paying after the garnishment proceedings ended, waived the contractual limitation or was estopped from relying on it.

## Decision

- The Oregon Supreme Court reversed the judgment for Gilbert and held the action was barred by the policy’s 12-month suit limitation.
- The court treated the 12-month limitation as a reasonable contractual term in a fire policy and enforced it according to its terms.
- The court rejected Gilbert’s waiver and estoppel arguments, concluding the adjuster’s statements tied to the garnishment did not amount to a clear relinquishment of the limitation defense and did not justify waiting years to sue after Globe announced it would deny the claim.
- On rehearing, the court denied relief and reaffirmed its disposition. (Rehearing denied, 178 P. 358.)

## Legal Principles

- A contractual provision in an insurance policy requiring suit to be filed within a specified period (including 12 months after a fire loss) is generally enforceable when the period is reasonable.
- An insurer’s statements during adjustment, including conditional assurances of payment, do not extend a contractual suit deadline absent clear conduct showing an intentional surrender of the limitation defense or conduct that reasonably caused the insured to delay suit past the deadline.
- Once the insurer communicates that it will deny liability, the insured must act within the contractual period rather than wait and later claim that earlier discussions or outside proceedings excused delay.
- A third party’s garnishment proceedings aimed at potential policy proceeds do not, by themselves, suspend the insured’s contractual obligation to bring suit within the time fixed by the policy.

## Conclusion

Gilbert’s suit on the fire policy was untimely because the policy required any action to be filed within 12 months of the fire, and Gilbert waited until 1918 to sue. The Oregon Supreme Court enforced the limitation clause and held Globe was not barred from asserting it: the adjuster’s alleged promise to pay after the garnishment was resolved did not constitute a waiver of the limitation defense and did not justify delaying suit after Globe indicated it would deny the claim.


Gilbert v. Globe & Rutgers Fire Insurance Co., 171 P. 1161, rehearing denied 178 P. 358 (1918)