Anderson Feed & Produce Co. v. Moore

• Decision Date: 13 May 1965
• Docket Number: No. 37027,37027
• Citation: 66 Wn.2d 237,401 P.2d 964
• Court: Washington Supreme Court
• Parties: ANDERSON FEED & PRODUCE COMPANY, Inc., a corporation, Appellant, v. Francis J. MOORE and Jane Doe Moore, husband and wife, and Ross Mellor and Jane Doe Mellor, husband and wife, a co-partnership doing business as Moore & Mellor Agency, Hartford Fire Insurance Company, a Connecticut corporation, the American Insurance Company, a New Jersey corporation, the Seven Provinces Insurance Company, Ltd., a Holland corporation, and Sayre & Toso, Inc., a California corporation, their brokers, John Doe, one of the underwriters at Lloyds, London, and W. B. Brandt & Co., Inc., a California corporation, his broker, Respondents.

Page 237

66 Wn.2d 237

401 P.2d 964

ANDERSON FEED & PRODUCE COMPANY, Inc., a corporation, Appellant, v. Francis J. MOORE and Jane Doe Moore, husband and wife, and Ross Mellor and Jane Doe Mellor, husband and wife, a co-partnership doing business as Moore & Mellor Agency Hartford Fire Insurance Company, a Connecticut corporation the American Insurance Company, a New Jersey corporation the Seven Provinces Insurance Company, Ltd., a Holland corporation, and Sayre & Toso, Inc., a California corporation, their brokers, John Doe, one of the underwriters at Lloyds, London, and W. B. Brandt & Co Inc., a California corporation, his broker, Respondents.

No. 37027.

Supreme Court of Washington, Department 2.

May 13, 1965.

Ken Earl, Moses Lake, Guttormsen, Scholfield, Willits & Ager, Seattle, for appellant.

Clarke, Clarke, Albertson & Bovingdon, Seattle, Gavin, Robinson, Kendrick & Redman, Yakima, Miller, Jansen & Sackmann, Ritzville, for respondents.

FINLEY, Judge.

This lawsuit by plaintiff-appellant, Anderson Feed and Produce Co., Inc., is to recover damages respecting certain fire losses not specifically covered under several fire insurance policies, sold to plaintiff by a firm of local insurance agents.

After the fire, it became apparent that the plaintiff was underinsured. Four insurance carriers admit liability for only a portion of the fire losses. As to the additional loss, the plaintiff's lawsuit seeks to impose liability upon the four insurance companies and upon Moore & Mellor, a local insurance agency, for alleged defects in the insurance coverage provided by the defendants. At the end of the plaintiff's case the trial judge ruled that plaintiff's evidence was not sufficient to support the asserted claims for relief. This ruling presents the issues in this appeal. The controlling rule of law is of course quite clear:

'* * * a challenge to the sufficiency of the evidence, * * * admits the truth of the opponent's evidence, together with all reasonable inferences arising therefrom, and requires a most favorable interpretation thereof. No element of discretion is involved, and such motions can be granted only when the court can say, as a matter of law, there is no substantial evidence to support the opponent's claim.' Frasch v. Leedom, 62 Wash.2d 410, 414, 383 P.2d 307, 310 (1963).

However, application of the rule requires a review of the evidentiary record adduced in the presentation of plaintiff's case in the trial court. The plaintiff is a corporation engaged in the storage, purchase and sale of grains and in the sale of feeds and farm supplies in Othello, Washington. The corporation is principally owned and managed by Newell F. Anderson. The plaintiff's evidence indicates that, in 1959, Anderson decided to place all of his insurance needs with Moore. Moore suggested that Anderson use a provisional reporting form or policy to cover the inventories in the elevator, warehouse and store. Moore explained that the policy required monthly reports of inventory. Anderson testified that he told Moore that it would be too much trouble to make monthly reports on all of his inventories. Anderson claims that Moore told him that all he had to do was to send Moore monthly reports of the fast-changing items of grain, and Moore would pick up the stable items of inventory from corporate bookkeeping or balance sheets that Anderson would send him. Moore had Anderson sign a pad of blank provisional reporting forms.

The plaintiff's physical plant was completely destroyed in June of 1961. The last monthly report, which under the policy determines coverage, stated that the plaintiff had an inventory of $19,809.63. After the fire, it was determined that the actual cash value of the inventory was $54,509.63. The insurance companies claimed their liability was limited to $19,809.63/54,509.63 of the actual inventory loss of.$48,999.51, which is $17,807.17. As to the difference between this sum and the cash value of the inventory lost in the fire, Anderson blames the underreporting by Moore.

The first claim of the plaintiff corporation is against the four defendant insurance companies. The plaintiff contends that it supplied Moore with all the figures he requested for the reports; also, that Moore was an agent of the four companies, and that they are bound by his knowledge, and that the condition of full reporting has been satisfied; thus, the defendant companies are liable for the full loss. We do not agree. The policies all provided that:

'It is a condition of this policy that the insured shall report in writing to this company on the last day of each calendar month of the policy term, the exact location of all property covered hereunder, the total cash value of such property at each location and the amount of creditable specific insurance in force at each location, all as of the last day of the month; however, a grace period of thirty (30) days shall be allowed for compilation and submission of such reports to this company. * * *'

Even further, the back of the reporting form which Anderson signed in blank, and which he used to send information to Moore, contained the following clear warning: 'WHO SHOULD REPORT: The report should be made by you and signed by one of your responsible officials and Not by your agent or broker. No agent or broker is authorized to relieve you of the responsibility for reporting values to the Company or to assume it for you. * * *'

It is clear that Anderson had notice of the limitation of Moore's authority. Therefore, the plaintiff cannot maintain that there was apparent authority for Moore to act for the company in accepting the information supplied to him by the plaintiff. Since the issue here is coverage of the policy rather than a forfeiture of the policy, the plaintiff's evidence has failed to establish either waiver or estoppel against the insurance companies. Consequently, the plaintiff has failed to present a case against the four defendant companies. Commonwealth Insurance Co. v. O. Henry Tent & Awning Co., 287 F.2d 316 (7th Cir.1961); Albert v. Home Fire & Marine Insurance Co., 275 Wis. 280, 81 N.W.2d 549 (1957).

The plaintiff relies on American Eagle Fire Ins. Co. v. Burdine, 200 F.2d 26 (10th Cir.1952), where the court held that the company was bound by an oral report by the insured to the agent which the agent failed to pass on to the company. However, that case is not persuasive, because there the court held that the company had...