Marshall v. Pletz/Dissent Black

by Hugo Black

United States Supreme Court

317 U.S. 383

Marshall  v.  Pletz

 Argued: Nov. 19, 1942. --- Decided: Jan 4, 1943

Mr. Justice BLACK dissenting, with whom Mr. Justice DOUGLAS and Mr. Justice MURPHY concur.

It has been said that the Act under consideration 'should be construed liberally in furtherance of the purpose for which * * * enacted and, if possible, so as to avoid incongruous or harsh results.' Baltimore & Philadelphia Steamboat Co. et al. v. Norton, Deputy Commissioner et al., 284 U.S. 408, 414, 52 S.Ct. 187, 189, 76 L.Ed. 366. The construction given the Act by the court below, which I think was correct, avoids such a result. The result of the construction here is to deprive an injured person of the compensation which the law intended he should have and which the insurance company, defendant, has admitted it owes. The only defense is a one-year statute of limitations, and that defense was not set up under circumstances that square with the Act's purposes. What are those circumstances? These facts are undisputed: November 12, 1935, Pletz was injured while working for a steamship company which carried liability insurance with the Fireman's Fund Insurance Company, one of the petitioners here. November 26, 1935, the insurance company's attorneys reported to the deputy commissioner administering the Act that payments to Pletz had begun and would continue until notice was given the commissioner. The insurance company did tender a check to Pletz while he was in the hospital which he declined because he thought it insufficient, and on December 4, 1935, the insurance company advised the Commissioner of the refusal. Negotiations between Pletz and the insurance company continued through repeated conversations for a year and five months. The company lawyer testified that 'I made the definite offer to him very early in the case that I would pay him his compensation any time he wanted to take it * * * and I told him that I made that offer and that he could take it any time he wanted to. * * *' It is apparent that the controversy throughout was not over the existence of a just claim, but over its size.

November 5, 1936, while negotiations were still in progress, and only seven days before the expiration of the year, the Commissioner wrote the attorney asking about the status of the claim. The attorney responded six days before the statute is said to have operated. He gave no information that Pletz had never accepted compensation and reported only that he had put Pletz under a doctor's care and that no report had been received from the doctor. If the Commissioner had thought that the claim was controverted, he would have been obligated under sec. 14(h) of the Act to hold hearings and take action 'upon his own initiative' to protect the rights of the parties. Under that section such a course is required where payment has been stopped or suspended. Instead, the insurance company attorney, according to his own testimony, continued to negotiate with Pletz until his claim was finally filed on April 19, 1936. The claim itself was filled out in the company lawyer's office without a hint of limitations. Then, for the first time, the company 'filed its controversial' with the Commissioner and pleaded in it the statute of limitations.

The Commissioner found in substance that there had been no overreaching of Pletz by the company and that therefore the company was not estopped from setting up the statute. Accepting his finding of facts I think that the Commissioner's conclusion was based on an erroneous conclusion of the law concerning estoppel and limitations, and that the continuous process of negotiation and communication between the company, Pletz, and the Commissioner, bar the defense made here.

In Schroeder v. Young, 161 U.S. 334, 344, 16 S.Ct. 512, 516, 40 L.Ed. 721, this Court said: 'Defendant relies mainly upon the fact that the statutory period of redemption was allowed to expire before this bill was filed, but the court below found in this connection that before the time had expired to redeem the property the plaintiff was told by the defendant Stephens that he would not be pushed, that the statutory time to redeem would not be insisted upon; and that the plaintiff believed and relied upon such assurance. Under such circumstances the courts have held with great unanimity that the purchaser is estopped to insist upon the statutory period, notwithstanding the assurances were not in writing, and were made without consideration, upon the ground that the debtor was lulled into a false security.'

Here, the insurance company's representative has sworn, and his evidence is undisputed, that he promised to pay Pletz 'his compensation any time he wanted to take it', a statement which was never withdrawn, and which in connection with the continued negotiations for a lump-sum settlement, even after the statutory period had expired, was more than an equivalent of an express promise not to plead the statute of limitations. It is perhaps an understatement to say that the company attorney's conduct was a tacit encouragement to Pletz to act on the assumption that the Company would never dispute its constantly admitted liability. Swain v. Seamens, 9 Wall. 254, 274, 19 L.Ed. 554. The statement of the Supreme Court of Illinois is in harmony with the general rule of law throughout the country: 'Where an insurance company leads a party to delay the bringing of suit, or to dismiss a suit already pending, by holding out hopes of adjustment, or by making promises to pay, it is estopped from taking advantage of such delay or dismissal by pleading the statute of limitations.' Railway Pass. & Freight Conductors' Benefit Association v. Loomis, 142 Ill. 560, 572, 32 N.E. 424, 427; cf. Ennis v. Pullman Palace-Car Co., 165 Ill. 161, 178, 46 N.E. 439; O'Hara v. Murphy, 196 Ill. 599, 63 N.E. 1081. See also Howard v. West Jersey, etc., Railroad Co., 102 N.J.Eq. 517, 522, 141 A. 755; Baker-Matthews Manufacturing Co. v. Grayling Lbr. Co., 134 Ark. 351, 354, 355, 203 S.W. 1021; McLearn v. Hill, 276 Mass. 519, 177 N.E. 617, 77 A.L.R. 1039. These cases illustrate the principle announced by this Court 'that where one party has by his representations or his conduct induced the other party to a transaction to give him an advantage which it would be against equity and good conscience for him to assert, he would not in a court of justice be permitted to avail himself of that advantage.' Union Mut. Life Insurance Company v. Wilkinson, 13 Wall. 222, 233, 20 L.Ed. 617.

Notes