Buchanan County Iowa Dairy Waited Too Long To Sue Insurance Company

Iowa case law summary by Attorney Richard Clem: Insurance, time to bring lawsuit.

Gary Slife, et al, v. Farmers Mutual Hail Insurance Company of Iowa. Iowa insurance, time to bring lawsuit.

The plaintiffs in this breach of contract case were the operators of Pleasant Valley Dairy in Buchanan County. For many years, they have been insured by Central Iowa Mutual Insurance Association (CIMIA), which is now part of Farmers Mutual Hail Insurance Company. The annual policy they took out in November 2010 contained a provision stating that they would bring any cause of action within one year of the damage. The policy they took out in November 2010 had a provision that the cause of action must be brought within two years.

On January 7, 2010, a roof collapsed on one of their buildings. Farmers Mutual did an inspection and concluded that the damage was not covered under the policy. Therefore, they denied coverage.

Almost two years later, on January 5, 2010, they brought a case for breach of contract in Buchanan County district court. The insurance company brought a motion to dismiss, since the case hadn't been filed within one year. The district court agreed, and dismissed the case. Dissatisfied with this ruling, the plaintiffs appealed to the Iowa Court of Appeals.

The plaintiffs first argued that the court should have relied on the policy they took out in 2010, since it contained a two-year provision. But the Court of Appeals held that, even though the words "continuous policy" were used in the later policy, the case was actually governed by the policy taken out in 2009, which was the one in effect at the time of the collapse.

The plaintiffs next argued that the one-year limit was unconsciounable. But they made no claim that there was any fraud or mistake, and the Iowa courts have long allowed insurers to include time limitations in their policies. Since one year was long enough to investigate the claim, it did not amount to a practical abrogation of the claim. The court noted that the plaintiffs had a full seven months to sue after the insurance company made its final decision. Therefore, the court held that the one year limit was reasonable.

For these reasons, the Court of Appeals affirmed the trial court's decision.

Nos. 3-1099, 13-0111 (Iowa. Ct. App. Feb. 5, 2014).

Please see the original opinion for the court's exact language.


Richard P. Clem is an attorney and continuing legal education (CLE) provider in Minnesota. He has been in private practice in the Twin Cities for 25 years. He has a J.D., cum laude, from Hamline University School of Law in St. Paul and a B.A. in History from the University of Minnesota. His reported cases include: Asociacion Nacional de Pescadores a Pequena Escala o Artesanales de Colombia v. Dow Quimica de Colombia, 988 F.2d 559, rehearing denied, 5 F.3d 530 (5th Cir. 1993), cert. denied, 510 U.S. 1041 (1994); LaMott v. Apple Valley Health Care Center, 465 N.W.2d 585 (Minn. Ct. App. 1991); Abo el Ela v. State, 468 N.W.2d 580 (Minn. Ct. App. 1991).

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