Group -- it could not be compatible with both.
The court concludes as a fact that there is no intrinsic evidence in the correspondence which shows an offer to negotiate a settlement or to arbitrate, or to pay the claims against the Westchester Group in the event plaintiff recovered against the Rhode Island Group, after reformation of title was suggested and that reformation and its legal effect were expressly adverted to as early at December 2, 1942, when Mr. Foster wrote: ' * * * as I pointed out to you, the nature of your bill may have a very material bearing upon the position of Westchester. * * * '
Mr. Kushinsky denied that Mr. Foster ever pointed out anything to him prior to writing this letter, and it would appear from his testimony that the allusions to a bill in chancery made no impression upon him. He testified that Mr. Foster on numerous occasions discussed settlement of this claim, led him to believe that they could arbitrate pursuant to the terms of the policy, did not deny liability, and on the contrary, gave assurances that the Westchester Group would pay its proportionate share of the loss in the event of recovery against the Rhode Island Group. He specified that these conversations took place in January and March, 1943, and on June 9, 1943, at Camden, New Jersey, on which occasion Mr. Foster was defending the Rhode Island Group.
Mr. Foster's testimony presents a complete denial with respect to negotiations, settlement and arbitration, and he says that after December 2, 1942, he never told Mr. Kushinsky the Westchester Group would pay or that payment would abide determination of the claim against the Rhode Island Group.
In view of the fact that reformation of title conspicuously altered the legal relations, and must have made an immediate impression upon Mr. Foster as is evidenced by the absence of any documentary evidence to sustain plaintiff's contention, the court concludes that negotiations out of which plaintiff seeks to construct a waiver ended with the letter of December 2, 1942. At that time plaintiff had until May 31, 1943, to prosecute his claim within the one year limitation period. Accordingly, it follows that the case of Martin v. State Ins. Co., supra, wherein negotiations continued past the expiration of the limitation period, is quite different.
The rule regarding waiver is aptly expressed in the case of Continental Ins. Co. v. Fire Ass'n, 6 Cir., 1945, 152 F.2d 239; and Reynolds v. Detroit Fidelity & Surety Co., 6 Cir., 1927, 19 F.2d 110, wherein waivers of the time for bringing suit was claimed. In the former case the complaint alleged negotiations in an endeavor to arrive at an amicable disposition, and the court stated: 'We think the District Judge was right in holding that mere negotiations in an endeavor to arrive at an amicable disposition of a controversy are insufficient basis for the application of the doctrine of waiver or estoppel. It is noteworthy that there are in the complaint no allegations of promises to pay, concealment, bad faith, fraud, misrepresentation or other facts which might be construed as an attempt to mislead plaintiff's assignor or to lull it into a sense of security, or into the belief that payment of any amount would be made by defendant. There is no allegation, direct or inferential, of intention by plaintiff's assignor to commence suit within the period limited by the policy and of its being turned from that course of action by misleading acts or promises by the defendant. No facts are alleged from which an inference might be drawn that the postponement of the suit was at the express or implied request of the defendant, or that there was an intentional delay in adjustment until after the limitation period provided in the policy had passed.' 152 F.2d 239, 240.
In the second of the cited cases a waiver was claimed because of delay caused the receiver of a corporation by defendant in investigating a required report filed with it by plaintiff. The court stated:
'The burden of proof is upon the party claiming a waiver to prove it. * * * In the absence of conduct creating an estoppel, a waiver must be supported by an agreement founded upon a valuable consideration. There can be no waiver unless so intended by one party and so understood by the other, but when a party has so acted as to mislead the other he is estopped thereby.
'We think that what happened was no more than delay on the part of the surety in announcing its action, which the receiver could at any time have ended by commencing suit, and without thereby violating any agreement or propriety, or even courtesy. We think the weight of authority clearly opposed to the receiver's contention of actual waiver.' 19 F.2d 110, 113, 114.
The negotiations herein do not constitute a waiver within the above holdings and in view of the conclusion that negotiations for settlement ended December 21942 and prior to the expiration of the limitation period plaintiff could not have been prejudiced. Defendant's motion for a directed verdict is granted.
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