Blanton v. Northwestern National Insurance Co., 18962.

• Decision Date: 19 August 1964
• Docket Number: No. 18962.,18962.
• Citation: 335 F.2d 965
• Parties: W. H. BLANTON and Liberty Federal Savings & Loan Association, Appellants, v. NORTHWESTERN NATIONAL INSURANCE COMPANY OF MILWAUKEE, WISCONSIN, and Seaboard Fire & Marine Insurance Co., Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

335 F.2d 965 (1964)

W. H. BLANTON and Liberty Federal Savings & Loan Association, Appellants, v. NORTHWESTERN NATIONAL INSURANCE COMPANY OF MILWAUKEE, WISCONSIN, and Seaboard Fire & Marine Insurance Co., Appellees.

No. 18962.

United States Court of Appeals Ninth Circuit.

August 19, 1964.

George Sorenson, Jr., Joe W. Contreras, Minne & Sorenson, Phoenix, Ariz., for appellants.

Calvin H. Udall, Daniel T. Bergin, Phoenix, Ariz., Clausen, Hirsh, Miller & Gorman, Chicago, Ill., Fennemore, Craig, Allen & McClennen, Phoenix, Ariz., for appellees.

Before JERTBERG and DUNIWAY, Circuit Judges, and JAMESON, District Judge.

JERTBERG, Circuit Judge:

Before us in this diversity suit is an appeal from a judgment of the United States District Court for the District of Arizona, denying recovery by appellants under insurance policies issued by the appellees in the State of Ohio on real and personal property located in that state.

No question is raised by the parties on this appeal respecting the jurisdiction of the District Court to hear and determine the cause which was tried to the court sitting without a jury.

In this appeal we shall hereafter refer to appellant W. H. Blanton as "Blanton", appellant Liberty Federal Savings & Loan Association as "Liberty Federal", appellee Northwestern National Insurance Company of Milwaukee, Wisconsin as "Northwestern" and appellee Seaboard Fire & Marine Insurance Co., as "Seaboard".

The record reveals that the real and personal property covered by said policies was completely destroyed by fire which occurred on June 23, 1960, on which date two policies of fire insurance issued to Blanton were in full force and effect, and were in full conformity with the laws of the State of Ohio. One policy was issued by Seaboard, whereby it agreed to indemnify Blanton against loss by fire to the real property described therein. Attached to and forming a part of said policy was a standard mortgage clause insuring the interest of Liberty Federal as Blanton's mortgagee. The other policy was issued by Northwestern to Blanton whereby it agreed to indemnify Blanton for loss by fire to the contents of the building described in the insurance policy issued by Seaboard.

Each of the policies was in the form prescribed by the Commissioner of Insurance of the State of Ohio, and provided, inter alia:

"* * * within sixty days after the loss, unless such time is extended in writing by this Company, the insured shall render to this Company a proof of loss * * *.

* * * * * *

"If the insured fails to render proof of loss such mortgagee, upon notice, shall render proof of loss in the form herein specified within sixty (60) days thereafter and shall be subject to the provisions hereof relating to appraisal and time of payment and of bringing suit. * * *

* * * * * *

"* * * this insurance as to the interest of the mortgagee * * * only therein, shall not be invalidated by any act or neglect of the mortgagor or owner * * *.

* * * * * *

"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."

Blanton did not file a proof of loss, after the loss, as required by the policy of insurance, nor at all. Liberty Federal was not notified by Blanton or Seaboard that Blanton had failed to file such proof of loss.

Blanton's action against Northwestern and Seaboard was commenced on November 20, 1961, a date more than sixteen months next after the inception of the loss. The complaint in intervention of Liberty Federal was not filed until June 20, 1962, a date more than twenty-three months next after the inception of the loss.

Blanton at all relevant times had possession of the policy of insurance issued by Northwestern and had knowledge of its contents. Liberty Federal at all times relevant had possession of the policy of insurance issued by Seaboard and had knowledge of its contents.

The District Court in its findings of fact found:

"On or about July 19, 1960, less than thirty days after the date of loss, Blanton\'s wife, acting on behalf of Blanton, had a conversation in Ohio with the agent of Northwestern and Seaboard who issued the policies, at which time she was advised that the fire of June 23, 1960, was under investigation by the State Fire Marshal; that nothing could be done with respect to Blanton\'s claim until the investigation was completed, and that she would be notified if anything further need be done to perfect Blanton\'s claim. Blanton\'s wife, who was then residing in Arizona and was in Ohio for a visit with her husband who was incarcerated in a penal institution in that state, left her Arizona address with the agent who had issued the policies and requested that she be notified if anything further needed to be done. Blanton\'s wife never received any further information from said agent. Except for said conversation had on or about July 19, 1960, neither Blanton nor any other person on his behalf ever made, or attempted to make, contact with either Northwestern or Seaboard, or their agent, until more than twelve months next after the inception of the loss.

"Liberty Federal, acting through its agent, was assured by the representative of Northwestern and Seaboard that its claim, under Seaboard\'s policy, was secure and that it was obligatory that Seaboard pay it for Blanton\'s loss. At no time did Liberty Federal make a claim for payment or receive promise of payment after October, 1960."

Included under the amended Conclusions of Law of the District Court, appear the following:

"The statement of Defendants\' agent to Plaintiff\'s wife, less than 30 days after the date of loss, that the fire was being investigated by the State Fire Marshal, that nothing could be done with respect to Plaintiff\'s claim until the investigation was completed, and that notice would be sent to the insured if anything further need be done, did not effect a waiver of defendants\' policies\' limitation provisions.",

and

"The assurance given Intervenor prior to November, 1960, that its claim under Seaboard\'s insurance policy would be paid, did not effect a waiver of the limitations clause contained in that Company\'s policy or excuse Intervenor\'s noncompliance therewith."

Among its Conclusions of Law the District Court found:

"The substantive law of Ohio is determinative of the rights and liabilities of the parties.

"The provisions of Defendants\' policies that no suit or action shall be sustainable unless commenced within 12 months next after the inception of the loss were valid and binding upon Plaintiff.

"The provisions of Defendant SEABOARD\'s policy that no suit or action shall be sustainable unless commenced within 12 months next after the inception of the loss were valid and binding upon Intervenor. The provisions of the standard mortgage clause that provided that the `mortgagee\'s interest shall not be invalidated by any act or neglect of the mortgagor\', did not render the limitation provision of the Defendant SEABOARD\'s policy inapplicable to the Intervenor."

The complaint of Blanton contains two causes of action. The first cause of action is against Northwestern. This cause of action alleges the issuance of the insurance policy insuring the property of Blanton; that the property was destroyed by fire which occurred about the 23rd day of June, 1960; that the reasonable value of said property at the time of loss exceeded $2500.00; that demand had been made upon Northwestern to furnish Blanton with papers or forms necessary to comply with the requirements of the policy in case of loss but that such demands had been refused; and that Northwestern had refused to pay, after demand therefor.

The second cause of action is against Seaboard and in similar form to the first cause of action.

Liberty Federal's complaint in intervention against Seaboard is in form similar to the second cause of action set forth in Blanton's complaint except that there is added thereto allegations of ownership by Liberty Federal of the unpaid promissory note secured by realty mortgage on the premises described in the policy of insurance issued by Seaboard.

Neither complaint alleges any facts from which the inference can be drawn that the failure to file suit within twelve months after the occurrence of the loss was in any way caused by any act, representation or conduct on the part of the insurance companies.

We are not concerned on this appeal with respect to those provisions of the policies which require the rendition to the insurance companies of proofs of loss within specified periods. The District Court made no findings of fact or conclusions of law in respect to waiver by the insurance companies of such provisions. In this connection the District Court stated in its memorandum opinion as follows:

"In view of the Court\'s determination

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