Elsey v. Hastings Mutual Insurance , 161 Mich. App. 484 ( 1987 )

Per Curiam.

On August 17, 1983, plaintiffs filed

Home had contracted with plaintiffs to provide homeowner’s insurance covering plaintiffs’ home from October 24, 1978, to October 24, 1979. Upon expiration of that policy, plaintiffs insured their home with Hastings. In early 1979, plaintiffs noticed a hairline crack in their living room fireplace. Some time between August, 1979, and October, 1979, plaintiffs noticed a slight depression in their living room floor. In November, 1979, plaintiffs discovered a slight drop-off in the floor in front of the fireplace. Around this same time plaintiffs also discovered cracks along the ceilings inside the house. In the spring or summer of 1981, Mrs. Elsey consulted John Lawrence, an attorney with whom she worked, stating that her home was collapsing and seeking advice as to plaintiffs’ legal recourse. Lawrence gave plaintiffs the name of another attorney to consider the possibility of a lawsuit.

Meanwhile, plaintiffs consulted with Pearl Troxel, the owner of a construction company, to evaluate the condition of their home. Troxel informed plaintiffs that their house was sinking, but he was unable to pinpoint the cause, i.e., whether it was due to settling or some other factor. Troxel advised plaintiffs to have the house remeasured the following year. Troxel came back to remeasure in the spring of 1982.

In June, 1982, plaintiffs finally consulted the attorney to whom they had been referred. In December, 1982, upon the attorney’s advice, plaintiffs sent notice of the damage to their home to both Home and Hastings. The claims were denied by each in January and March, 1983, respectively.

On the attorney’s advice, plaintiffs then hired an engineer to evaluate their home. On June 28, 1983, the engineer submitted a report to plaintiffs which indicated that their house was collapsing. Thereafter, plaintiffs filed this action in circuit court seeking to collect for the damage to their home. Both defendants’ motions for accelerated judgment were granted on the basis that the action was not commenced within the applicable period of limitation as set forth in the terms of the policy.

MCL 500.2832; MSA 24.12832 sets forth the statutorily required standard fire insurance policy. The limitation period at issue herein is identical to the statute at lines 157 to 161:

No suit or action on this policy for the recovery of any claim shall be sustainable in any court of law or equity unless all the requirements of this policy shall have been complied with, and unless commenced within twelve months next after inception of the loss.

This period of limitation begins to run from the date of the loss. In re Certified Question, Ford Motor Co v Lumbermen’s Mutual Casualty Co, 413 Mich 22, 38; 319 NW2d 320 (1982). Plaintiffs contend, however, that the inception of their loss and, hence, the accrual of their cause of action, occurred on June 28, 1983, when they received the report from the engineer which concluded that the house was collapsing and not merely settling. Plaintiffs contend that even though they knew the damage to their home had occurred, e.g., cracks in the fireplace and ceiling and a dip in the floor, they were not required to bring suit until they had knowledge of the cause of the damage, i.e., collapse rather than settlement. Hence plaintiffs wish us to interpret the phrase "inception of the loss” as being the time at which they had knowledge of the cause of the loss rather than the date of the loss. We decline to do so.

Without getting into an interpretation of "inception of the loss” we find plaintiffs’ argument to be flawed. Even taking plaintiffs’ contention as the law, we nevertheless find that the "inception of the loss,” i.e., (in plaintiffs’ terms) knowledge of the cause of the loss, could have taken place no later than one year from the time Pearl Troxel evaluated plaintiffs’ house. At the time of Troxel’s first evaluation he told plaintiffs to have the house remeasured in one year to determine the cause of the sinking. Testimony indicates that Troxel came back one year later and that, in his opinion, the weight of the fireplace was pulling the house down. Even without Troxel’s evaluation, plaintiffs nevertheless had a duty, after being informed that the house was sinking, to have the house remeasured in 1982. At this time they would have had knowledge that the house was collapsing.

Moreover, it appears that plaintiffs knew or reasonably should have known of the damage to their home as early as the summer of 1981 when Mrs. Elsey consulted with John Lawrence. At this time, Mrs. Elsey indicated that her house was collapsing. We are of the opinion that plaintiffs should have immediately consulted the builder and an engineer to ascertain the cause of the damage to their home. It was at this time that plaintiffs should have consulted an attorney to ascertain their legal rights. Any other conclusion would prejudice the insurers.

Plaintiffs appear to be advocating the "discovery rule,” which states that the statute of limitations does not begin to run until the plaintiff discovers, or through the exercise of reasonable diligence should have discovered, that he has a possible cause of action. See Filcek v Utica Building Co, 131 Mich App 396, 399; 345 NW2d 707 (1984); Thomas v Process Equipment Corp, 154 Mich App 78; 397 NW2d 224 (1986). Plaintiffs’ argument fails since, through the exercise of reasonable diligence, they should have discovered their loss. Accordingly, accelerated judgment in favor of defendants was appropriate.

Affirmed.