Wood v. MUTUAL OF NEW YORK LIFE INSURANCE COMPANY, 405 F. Supp. 685 (N.D. Ala. 1975)

James K. Davis, Fite, Davis & Fite, Hamilton, Ala., for plaintiff.

Laurence D. Vinson, Jr., Bradley, Arant, Rose & White, Birmingham, Ala., for defendant.

HANCOCK, District Judge.

This cause came on to be heard before the court at a regularly scheduled motion docket on September 5, 1975, upon motion of plaintiff to strike the first defense, the second defense, the fourth defense and the fifth defense of defendant's answer. The court has considered the motion as well as the supporting and opposing briefs, affidavits and exhibits and is of the opinion that the motion is due to be overruled and denied.

On June 9, 1975, Betty W. Wood filed suit in the Marion County Superior Court for the Fourth Judicial Circuit of Alabama against Mutual of New York Life Insurance Company (MONY) to recover on a policy of insurance which had been issued on or about June 30, 1960, insuring the life of her husband, James A. Wood. The action was removed here by the defendant pursuant to the court's diversity of citizenship jurisdiction. The parties herein admit that said policy of insurance, insuring the life of James A. Wood, was in fact issued on or about June 30, 1960. In her complaint, plaintiff alleges that James A. Wood died on December 8, 1961, and that defendant had notice of said fact. Plaintiff further alleges that the $25,000 face amount of the policy is now due and that she is the beneficiary of the proceeds of the policy.

By way of its answer, filed and served on July 3, 1975, the defendant asserts, inter alia, that the plaintiff's claim is barred by the applicable statute of limitations. On August 1, 1975, the plaintiff moved the court to strike certain of MONY's defenses, including the second defense of the statute of limitations. Plaintiff contends that MONY had previously denied liability on the ground that the policy was not in force and effect at Mr. Wood's death, and that it cannot now insist on another ground, namely, the statute of limitations.

In support of her contention, plaintiff relies upon the affidavit of Mr. Rankin Fite, her attorney. In essence, Mr. Fite states that through correspondence with MONY in December, 1974, and January, 1975, MONY indicated that its position was that the policy had terminated without value in June, 1961. Mr. Fite further states that he never received notice *686 from MONY that it was asserting any defense other than lapse of the policy without value in June, 1961.

For the purpose of deciding plaintiff's motion to strike, the court proceeds upon the assumption that defendant does not contest the above statements of Mr. Fite. In other words, the court, as a matter of law, will decide the propriety of the statute of limitations defense based upon the undisputed facts as they have developed to date.

Under Alabama case law when an insurer denies the existence of a contract of insurance upon notice of a claim under the policy, such acts as a waiver of other defenses which the insurer might later seek to assert. See, e. g., Home Insurance Company v. Scharnagel, 227 Ala. 60, 148 So. 596 (1933); Liverpool & London & Globe Insurance Company v. McCree, 213 Ala. 534, 105 So. 901 (1925). However, a careful review of these authorities indicates that there is a significant qualification to the foregoing principle. Under such qualification, defenses which are capable of being waived under the principle outlined above are limited to defenses arising out of an express condition contained in the insurance contract. Here, the statute of limitations raised by the defendant is a procedural bar imposed by reason of law and not a defense conferred upon the insurer because of a contractual undertaking. Plaintiff has not shown conditions upon which the running of the statute is tolled or upon which the statute is waived or removed. Therefore, the court is of the opinion that the statute of limitations may be an appropriate defense.

Accordingly, it is hereby ordered that plaintiff's motion to strike defendant's defense of the statute of limitations is overruled. It is further ordered that the motion as addressed to other defenses is likewise overruled.