William Vala purchased a fire and casualty policy from Pacific Insurance covering an office building. The policy was effective April 15, 1994 through October 15, 1994. On June 8, 1994, a severe windstorm and rain caused damage to the building in excess of the $40,000 limit of the policy. The parties agreed that the cause of the loss was covered by the policy. Shortly after the loss, the insured filed a claim and provided the company with loss information.

Using different adjusting companies, the insurer ordered several examinations of the property and, on September 26, 1994, the claim was denied. The insured's agent received a copy of the denial letter, and he requested that further investigation be done. In October (1994), the company had another inspection made, and again the claim was denied. The insured filed his complaint against Pacific on November 6, 1995, and the company filed a motion to dismiss since the policy required any action on the policy for recovery of a claim to be filed within 12 months after the date of the loss. The trial court entered judgment in favor of the company and the insured appealed.

The higher court affirmed the judgment, stating that the insured had one year from the date of the loss on June 8, 1994, to file suit against the company. The record before the court did not give the date when the insured supplied the company with information about the loss. Even assuming the insured supplied that information on June 11, the time from then until September 26 could be considered tolled. That amounted to 100 days. Therefore, the insured had 107 days after June 8, 1995, to file his suit. This would have required him to file by September 16, 1995. He did not file suit until November 6, 1995, and the action was barred by the policy limitation.

The insured argued that the company's reinvestigation of the loss after its denial on September 26, 1994, should be considered to further toll the limitations period until what he termed the final denial of his claim on November 14, 1994. The higher court disagreed, finding that the company agreed to investigate the claim further as a courtesy to the insured, and it did not constitute a withdrawal of its original denial of the claim.

The court noted that, in order to preserve his rights under the policy, the insured could have filed suit within one year of the original denial.

The judgment entered in the trial court in favor of the company was affirmed.

William Vala, Appellant, v. Pacific Insurance Company, Ltd.--No. 4-97-0190--Appellate Court of Illinois, Fourth District--May 29, 1998--695 North Eastern Reporter 2d 581.