                     IN THE COURT OF APPEALS OF IOWA

                             No. 3-1225 / 13-0940
                             Filed March 12, 2014

JERRY DONNELL,
    Plaintiff-Appellant,

vs.

AMERICAN FAMILY MUTUAL
INSURANCE COMPANY,
     Defendant-Appellee.
________________________________________________________________

      Appeal from the Iowa District Court for Benton County, Sean W.

McPartland, Judge.



      Jerry Donnell appeals the district court ruling granting defendant American

Family Mutual Insurance Company’s motion for summary judgment. AFFIRMED.



      Matt J. Reilly of Eells & Tronvold Law Offices P.L.C., Cedar Rapids, for

appellant.

      Scott K. Green, West Des Moines, for appellee.



      Considered by Doyle, P.J., and Tabor and Bower, JJ.
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BOWER, J.

          Jerry Donnell appeals the district court ruling granting defendant American

Family Mutual Insurance Company’s motion for summary judgment.               Donnell

claims the one-year limitations provision found in the insurance contract is

inapplicable as it is contrary to Iowa law; and the limitations provision is

unenforceable as it is unreasonable, unconscionable, and contrary to his

reasonable expectations. We find the provision is not contrary to Iowa law as it is

identical to the standard statute of limitations for fire insurance contracts required

by Iowa law. We also find the one-year limitations period is enforceable. We

affirm.

I.        Background Facts and Proceedings

          American Family Mutual Insurance Company (American Family) issued an

insurance policy to Jerry Donnell (Donnell) to cover his personal and real

property from loss. More than sixteen months after a June 20, 2011 lightning

strike to his home, Donnell filed suit against American Family.

          American Family moved for summary judgment claiming the suit was

barred by the one-year limitations period found within the insurance contract.

Donnell resisted the motion by claiming the suit was not barred because a

“conformity to state law” provision in the policy reformed the one-year limitations

period to comply with Iowa’s ten-year limitations period on contract claims.

Donnell also claimed the provision was unconscionable, unreasonable, and

contrary to his reasonable expectations. Disagreeing, the district court granted

American Family’s motion.
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II.    Standard of Review

       We review both the interpretation of insurance contracts and a district

court’s grant of summary judgment for correction of errors at law. Boelman v.

Grinnell Mut. Reins. Co., 826 N.W.2d 494, 500 (Iowa 2013). We review the

record in the light most favorable to the non-moving party, granting every

legitimate inference that can be reasonably deduced from the evidence. Id. at

500–01.      Summary judgment is granted when there is no genuine issue of

material fact and the moving party is entitled to judgment as a matter of law. Id.

III.   Discussion

       A.      Conformity with State Law

       Donnell admits the limitations provision in the insurance contract requires

all suits under the contract be instituted within one year of the loss. He claims,

however, a “conformity with state law” provision requires the contract be

reformed to comply with Iowa’s ten-year statute of limitations for written

contracts.    The facts are not in dispute.    The issue is one of statutory and

contractual interpretation.

       The insurance contract’s conformity to state law provision reads as

follows:

       4.      Conformity to State Law. If any part of this policy is
       contrary to a law of the state in which the described property is
       located, we agree to alter that part of our policy and make it
       conform with that state law. However, all other parts of this policy
       will remain in force and unaltered.

While the typical conformity provision might require conformity with “the” law of

the state generally, Donnell interprets this provision to require conformity with “a”
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law of the state, meaning the policy must be reformed to follow any individual

code section with which it does not comply.

      Iowa Code section 614.1(5) (2011) establishes a ten-year limitations

period for all written contracts. Donnell contends this is “a” law of the state and

the policy should be conformed to comply with it. American Family points out

their policy conforms with, and may even be required by, Iowa Code section

515.109(6), which standardizes a twelve-month limitations period for all fire

insurance contracts.

      Private agreements are allowed to vary the otherwise applicable general

statutes of limitation. See Thomas v. United Fire & Cas. Co., 426 N.W.2d 396,

397–98 (Iowa 1988). Fire insurance contracts are reviewed in a particularized

and unique way. Id. at 399. “We long ago applied this principle to allow a

shortened limitation provided in a fire insurance policy.” Id. at 397–98. One-year

limitations provisions have been upheld for fire insurance contracts despite

longer periods provided for by statute. Id.

      The issue here is complicated by the conformity to state law provision.

Donnell claims the conformity provision eliminates the permissible shortening of

the limitations period and imposes the longer, ten-year period found in Iowa

Code section 614.1(5). The policy matches the limitation found in Iowa Code

section 515.109(6); accordingly, when the conformity provision speaks of the

policy being contrary to a state law, the only possible conflict is with section

614.1(5). We do not interpret the policy to be in conflict with state law. As we

have previously explained, parties are free to create a shorter limitations period.
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Making such a decision cannot be in conflict with a state law when the parties are

not required to strictly adhere to that law, and we do not read the conformity

provision to prohibit the parties to accept or reject limitation provisions upon

which they have agreed. Our supreme court has specifically held parties are free

to reduce the ten-year standard written contract limitations period to a shorter

term. See Faeth v. State Farm Mut. Ins. Co., 707 N.W.2d 328, 334 n.3 (Iowa

2005). We cannot say it is a violation of state law to do what is clearly permitted.

       We are influenced by the fact a one-year limitations period is standard for

fire contracts.   Read strictly, Iowa Code sections 515.109 and 614.1 are in

conflict. Section 515.109, creates a standard provision for a fire contract and a

special limitations period, which differs from the general statute of limitations for

all contracts found in section 614.1. The general rule, that a specific statute

supersedes a general one, clearly elevates the one-year limitations period in

section 515.109(6) over any found in the general statute, section 614.1. See

Olson Enters., Inc. v. Citizens Ins. Co. of N.J., 121 N.W.2d 510, 512 (Iowa 1963).

Even assuming the provision violates section 614.1, and the conformity provision

evidences an intent to waive the right to choose a shorter limitations period, the

general section is inferior to the more specific limitations period found in section

515.109.    We find the conformity provision does not dictate application of a

longer limitations period than is found in the policy.

       B.     Enforceability of the Limitations Clause

       Donnell also claims the limitations period contained within the policy is

unenforceable as unreasonable, unconscionable, and contrary to his reasonable
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expectations.   Donnell relies upon Robinson v. Allied Property & Casualty

Insurance Co., 816 N.W.2d 398, 402 (Iowa 2012), to claim any shortening of the

statutory limitations period must allow the insured a reasonable time to sue for

enforcement of the policy.

       In Robinson, an insured settled against a tortfeasor for the tortfeasor’s

policy limits. 816 N.W.2d at 400. The insured then filed suit against their own

insurer to cover the remainder of the damages. Id. The district court granted

summary judgment as the suit was filed after the two-year limitations period

contained within the policy.        Id.    Examining the argument concerning

reasonableness of the limitations provision similar to Donnell’s, our supreme

court found the two-year limitations provision to be per se reasonable as it

matched the two-year statute of limitations enacted by our legislature for all

personal injury claims. Id. at 404–05. In the present matter, our legislature has

made a similar, arguably more directly applicable, policy determination for

commencement of actions on a fire claim. As time goes on, evidence of a fire

grows increasingly stale. The shorter limitations period gives insurers confidence

claims will be litigated while evidence remains as fresh and available as possible,

and protects against suits concerning fire losses where the necessary forensic

evidence has been lost. Our supreme court has repeatedly approved of the

twelve-month limitation period for fire policies. See, e.g., Thomas, 426 N.W.2d at

399 (equal protection grounds); Stahl v. Preston Mut. Ins. Ass’n., 517 N.W.2d

201, 203 (Iowa 1994). Donnell has failed to show, based upon the unique and

specific facts of this case, the one-year limitation period is unreasonable.
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        We also fail to find the policy limitation is unconscionable. “In considering

claims of contractual unconscionability, we examine the factors of assent, unfair

surprise, notice, disparity of bargaining power, and substantive unfairness.” In re

Marriage of Shanks, 758 N.W.2d 506, 515 (Iowa 2008). It is not enough to show

the insured made a bad deal.        See id.    As explained in Shanks, there are

procedural and substantive elements to unconscionability. Id. Neither applies

here.   Substantively, we first ask whether the terms of the contract are so

oppressive that no reasonable person would enter into such a bargain.             Id.

Considering the presence of the same limitations period in state law, we cannot

agree the terms are oppressive or unreasonable. Nor is the language buried in

fine print or convoluted.

        Finally, we find no merit in Donnell’s claim the limitations provision is

counter to reasonable expectations. An insured should reasonably expect policy

provisions established and justified by state law.

        Having found the one-year limitations clause enforceable despite the

conformity provision, and having found the limitations provision not to be

unreasonable, unconscionable, or contrary to Donnell’s expectations, we

determine the district court was correct in granting American Family’s motion for

summary judgment.

        AFFIRMED.
