The
Mundys had an insurance policy covering burglary.They were sent a notice with their
renewal that the policy was changing such that the insurance company's
liability for stolen silver would be limited to $1,000 in the future.They didn't really look at the
notice.Later, there was a
burglary and lots of silverware and guns were stolen from them.The insurance company refused to
pay out more than $1,000.
Lumberman
specifically said at the top of the renewal notice that there were some
coverage changes.
The
Mundys sued, claiming that they weren't given adequate notice of the change in their policy.
The
Trial Court ruled for Lumberman. The Mundys appealed.
The
Appellate Court affirmed.
The
Appellate Court found that the notice given in the policy itself was quite clear.
There
is a common law concept called duty to read.That means that as
long as the information was given to you, it is your own fault if you
don't read it (see Allied Van Lines Inc. v. Bratton).
Allied
Van Lines Inc. v. Bratton said,
"unless one can show facts to demonstrate that he was prevented
from reading the contract, or was induced by statements of the other
party to refrain from reading the contract, it is binding."
Had
Mundy called Lumberman and discussed the term with the insurance agent and
the agent said, "don't worry about that term, it doesn't apply to
you." Then, since the contract probably has an integration clause, that discussion could be considered parol
evidence and would not be binding!
