Sevier v. U.S. Fidelity & Guar. Co., 86-C-0801

• Citation: 497 So.2d 1380
• Decision Date: 24 November 1986
• Docket Number: No. 86-C-0801,86-C-0801
• Court: Supreme Court of Louisiana
• Parties: W.P. SEVIER, et al. v. UNITED STATES FIDELITY & GUARANTY COMPANY, GAB Business Services, Incorporated, and F.A. Wiegmann, Individually.

Page 1380

497 So.2d 1380

W.P. SEVIER, et al. v. UNITED STATES FIDELITY & GUARANTY COMPANY, GAB Business Services, Incorporated, and F.A. Wiegmann, Individually.

No. 86-C-0801.

Supreme Court of Louisiana.

Nov. 24, 1986.

James D. Caldwell, Tallulah, for applicants.

Brian Crawford, Theus, Grisham, Davis & Leigh, Monroe, for respondents.

CALOGERO, Justice ^*

This lawsuit is primarily over the proceeds of the fire portion of a homeowner's policy which was issued by defendant United States Fidelity & Guaranty Co. (USF & G) to W.P. Sevier. ¹ Defendants filed exceptions of no right of action, lack of procedural capacity, and prematurity. The trial court dismissed the exceptions. The court of appeal granted defendants' application for a supervisory writ, then rendered an opinion maintaining the exception of prematurity and dismissing the plaintiffs' suit without prejudice. ² We reverse.

On February 11, 1984, a fire damaged W.P. Sevier's home. Mr. Sevier notified his homeowner's insurer, USF & G, which in turn referred the matter to an adjusting firm, GAB Business Services, Inc. (GAB). The adjuster, F.A. Wiegmann, inspected the damage on February 13, 1984. He prepared what he termed a "scope of repairs," an itemized list of the material and labor needed for repairs. Floyd Humble, a contractor who had previously done work on the Sevier home, was also present, having been contacted by Sevier. Wiegmann was introduced to Humble by Sevier. Wiegmann authorized Humble to begin cleaning up, which Humble commenced that week. Wiegmann also asked Humble to submit an estimate for the cost of repairs.

After receiving Humble's estimate for $89,569.59, Wiegmann asked Traxler Construction Co. to submit a bid. On March 12, 1984, Traxler gave its bid of $59,000 to Wiegmann, who forwarded a copy to plaintiffs' attorney. Thereafter, plaintiffs' attorney, by letter dated March 23, 1984, demanded the amount of Humble's estimate in settlement of the claim. One month later, he sent a bid of $88,716 from Cupit Construction Company to Wiegmann. By letter dated April 25, 1984, GAB notified plaintiffs' attorney that USF & G demanded an appraisal. The plaintiffs refused to participate in the appraisal procedure, demanded settlement of the claim, and filed this lawsuit. Defendants filed several exceptions, including the exception of prematurity. They based the exception of prematurity on the plaintiffs' alleged failure to submit to an appraisal procedure set forth in the policy and demanded by the insurer. ³ That appraisal procedure was as follows:

Appraisal.

In case the insured and this Company shall fail to agree as to the actual cash value or the amount of loss, then, on the written demand of either, each shall select a competent and disinterested appraiser and notify the other of the appraiser selected within twenty days of such demand. The appraisers shall first select a competent and disinterested umpire and failing for fifteen days to agree upon such umpire, then, on request of the insured or this Company, such umpire shall be selected by a judge of a court of record in the state in which the property covered is located. The appraisers shall then appraise the loss, stating separately actual cash value and loss to each item; and, failing to agree, shall submit their differences, only, to the umpire. An award in writing, so itemized, of any two when filed with this Company shall determine the amount of actual cash value and loss. Each appraiser shall be paid by the party selecting him and the expenses of appraisal and umpire shall be paid by the parties equally.

When Loss Payable.

The amount of loss for which this Company may be liable shall be payable sixty days after proof of loss, as herein provided, is received by this Company and ascertainment of the loss is made either by agreement between the insured and this Company expressed in writing or by the filing with this Company of an award as herein provided.

Suit.

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.

The trial court found that USF & G had waived its right to demand an appraisal because of its use of dilatory tactics, citing Talbert v. Northwestern National Insurance Co., 167 La. 608, 120 So. 24 (1929). On appeal, the court of appeal first considered whether the appraisal clause was enforceable. It examined the cases which have held that a mandatory arbitration clause violates La.Rev.Stat.Ann. § 22:629 (West 1978 & Supp.1986). ⁴ Sevier v. USF & G, 485 So.2d 132, 135 (La.App. 2d Cir.1986). It then examined the conflicting cases in the courts of appeal on whether the appraisal clause also violates La.Rev.Stat.Ann. § 22:629. Id. at 135-36 (citing Alexander v. General Fire & Life Assurance Corp., 268 So.2d 285 (La.App. 2d Cir.1972) and Girard v. Atlantic Mutual Insurance Co., 198 So.2d 444 (La.App. 4th Cir.1967)). The court of appeal (Second Circuit) overruled its own prior decision in Alexander and adopted the Fourth Circuit's holding in Girard that the appraisal clause is enforceable. 485 So.2d at 136.

The court of appeal then considered the plaintiffs' argument that the appraisal procedure set out in the policy was not invoked timely because the insurance company's demand was not made within the requisite sixty days. It found that the plaintiffs did not submit a satisfactory proof of loss to the insurance company until February 28, 1984, at the earliest, and that, therefore, the insurance company's appraisal demand on April 25, 1984, was within sixty days and thus timely. The trial court's dismissal of the exception of prematurity was therefore reversed by the court of appeal for the reason that plaintiffs had not fulfilled the requirements of the policy before filing suit. Id. at 137.

A suit is premature if it is brought before the right to enforce it has accrued. La.Code Civ.Proc.Ann. art. 423 (West 1960). Prematurity is determined by the facts existing at the time suit is filed. Fairfield Development Co. v. Jackson, 438 So.2d 664, 669 (La.App. 2d Cir.1983) (citing Weldon v. Republic Bank, 414 So.2d 1361 (La.App. 2d Cir.1982)). The exception of prematurity is a dilatory exception on which evidence may be introduced. La.Code Civ.Proc.Ann. arts. 926, 930 (West 1984). Thus, we must consider the testimony and documentary evidence presented at the hearing to decide whether a satisfactory proof of loss was submitted to the insurance company on or before February 24, 1984, which would make the April 25, 1984, USF & G demand for appraisal untimely, ⁵ as alleged by plaintiffs, or whether it was presented originally on or after February 25, 1984, in which event the April 25, 1984, demand would be timely.

No formal proof of loss was submitted in this case. However, the plaintiffs contend, and we determine hereinafter in this opinion, that the handwritten estimate by the contractor, Floyd Humble, constitutes an adequate proof of loss. Thus, the significant fact becomes whether defendant received Humble's handwritten estimate before February 25, 1984. There was conflicting evidence as to the date on which this handwritten estimate was submitted. The court of appeal relied on the adjuster's testimony that he received the handwritten estimate about February 28, 1984, and emphasized that there was no contrary direct testimony. There was, nonetheless, contrary evidence, which will be discussed below.

Furthermore, the trial judge discounted entirely the testimony of the adjuster. He "was not impressed with Mr. Wiegmann's ability to recall dates in this matter, particularly wherein those dates may or may not have affected liability of USF & G." He simply did not believe Mr. Wiegmann's testimony that he did not receive the handwritten estimate until about February 28th. "It is the task of the trial judge to determine the credibility of the witnesses and this determination will not be disturbed absent manifest error." Boustany v. Fluid Dynamics, Inc., 392 So.2d 750, 751 (La.App. 3d Cir.1980) (citing Canter v. Koehring Co., 283 So.2d 716, 724 (La.1973)). It is true that the trial judge had no evidence before him of the date of receipt by Wiegmann of the typewritten Humble estimate. He did, however, have evidence to support his conclusion that, as a matter of fact, Wiegmann received Humble's handwritten estimate on or before February 23, 1984, contrary to Wiegmann's testimony that that estimate was received on February 28th.

The trial judge concluded, from the evidence before him, that: the first communication between Wiegmann and Humble took place on February 13, 1984, when they were introduced to each other by Sevier at the Sevier home; Humble was permitted to begin cleaning up; on or shortly after February 13th, Humble prepared an undated, handwritten, comprehensive estimate for $89,569.59, based on Wiegmann's "scope of repairs"; Humble gave the estimate to Wiegmann after February 13, 1984, but on or before February 23rd for on February 23rd, the contractor converted the handwritten estimate to a typewritten one, practically identical, addressed to Mr. Sevier.

The judge's primary support for this sequence of events is that the adjuster had in his possession the handwritten estimate. In fact, defendants introduced it into evidence at trial. No doubt, it was prepared before the typed estimate, which was dated February 23, 1984. The trial judge concluded that even if the adjuster did not receive the February 23rd typewritten estimate on February 23rd (the adjuster so testified), he had received, between February 13th and February 23rd, the handwritten estimate (converted to typewritten form on February 23, 1984, by Humble), which defendants produced from the adjuster's file.

In our view, the record supports the findings of the trial judge. The fact finder's...