Mundy v. Lumberman's Mut. Cas. Co.
783 F.2d 21 (1st Cir. 1986)

  • 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!