Christianson v. Norwich Union Fire Ins. Soc.
| Decision Date | 06 December 1901 |
| Citation | 84 Minn. 526,88 N.W. 16 |
| Parties | CHRISTIANSON v. NORWICH UNION FIRE INS. SOC. |
| Court | Minnesota Supreme Court |
OPINION TEXT STARTS HERE
Appeal from district court, Hennepin county; Charles M. Pond, Judge.
Action by Lina Christianson against the Norwich Union Fire Insurance Society. Finding for plaintiff. From an order refusing a new trial, defendant appeals. Affirmed.
1. For the arbitration of disagreements between the insurer and insured as to the loss and damage sustained at a fire the Minnesota standard policy contemplate and provides for a board of referees, to be made up of disinterested and impartial men chosen for their ability and fairness.
2. Such board of referees is a quasi court, governed by the rules applicable to common-law arbitration.
3. While allowed reasonable freedom to personally inspect the ruins of a fire, the débris and remnants of damaged goods, for the purpose of applying their knowledge in considering evidence, the inquiry must be conducted by the board in the usual manner of receiving evidence and examining witnesses in the presence of the interested parties or their counsel, subject to the tests of cross-examination.
4. Where two of the referees proceed to act together, privately collecting information and examining witnesses without regard to the third referee, finally making up the award without reference to him, and where evidence is received by the full board without affording the parties concerned an opportunity to be present in person or by counsel, such conduct will invalidate the award.
5. A party does not assume the consequences of irregularities and misconduct on the part of a referee merely because it was known to him that he was a professional referee on behalf of the interests of the opposite party.
6. When one of the parties to such a controversy refuses to abide by an award on the ground of misconduct of referees, and notifies the other party of that fact, stating the grounds of objection, and demanding a reappraisement, the party so notified has the option to stand by the award or submit to a reappraisement; and if he shall elect to abide by the award, and the same is adjudged illegal for the cause assigned, then there can be no resubmission to other referees, but the damages may be determined in the action brought to set aside the award.
7. Evidence considered, and held to sustain the findings of the court in reference to the amount of damage and the misconduct of the referees. W. A. Lancaster and Brown & Kerr, for appellant.
M. H. Boutelle, H. J. Gjertsen, and Robert Jamison, for respondent.
This action is brought by plaintiff to set aside the award of referees, appointed to determine the amount of loss under a fire insurance policy in the defendant company, upon the grounds of fraud and misconduct in their methods of procedure and of the inadequacy of the award. The trial court returned findings to the effect that the reasonable and fair cash value of the stock of goods and merchandise in plaintiff's possession at the time of the fire was $29,348.71; that the material entirely destroyed amounted to $13,777.08, and that the direct loss and damage to the residue of her goods was $13,798.48, causing plaintiff a total loss and damage of $26,798.48; that immediately after the fire plaintiff served defendant with due notice thereof, in accordance with the required terms of the policy, and upon failure of agreement by the parties as to the amount of the loss the matter was referred to three appraisers, appointed in the manner provided in the policy by each party submitting to the other a list of three names, from which plaintiff selected W. W. Thomas and defendant Harry A. Titcomb, and the two referees so chosen agreed upon William A. Alden as the third referee,-all of Minneapolis; that the referees proceeded to consider and estimate the loss and damage to plaintiff's stock of goods, and from April 20 to May 22, 1900, held various meetings for the purpose of hearing the testimony of witnesses offered by the respective parties, also examining plaintiff's books of account, invoices, vouchers, and other papers, and viewing the premises and the goods partially destroyed by the fire, thereafter determining the sound value of the goods and merchandise on hand at the time of the fire to be $29,348.71, after which no evidence of any character was received or considered by them as a board, but that Referees Thomas and Alden, acting by themselves, later reconsidered the question, reducing the amount to $14,302.14, which award, so signed by them, defendant accepted, and has declared itself ready and willing to pay, but which offer plaintiff declined, and on May 24, 1900, formally rejected it by written notice to defendant charging unfairness and misconduct on the part of the referees, and demanding a reappraisement and resubmission of the matter to other referees; that defendant refused its consent to such resubmission, and has at all times insisted upon the validity of the award made by Thomas and Alden, and expressed its willingness and ability to pay that amount. The court found that Referees Thomas and Alden were not fair, disinterested, and impartial persons, but, on the contrary, were so strongly biased and prejudiced against plaintiff as to materially affect their actions in making up and signing the award; that on different occasions during the progress of their proceedings Referee Thomas had openly declared himself the representative of the insurance company's interests; that Thomas and Alden had privately consulted witnesses concerning the quality and value of plaintiff's stock of goods, thereby materially influencing their action and decision; that they agreed to hear further evidence on plaintiff's behalf, and to notify her of a time and place for that purpose, but found their award without so doing. The court further found that within four months prior to the selection of Referee Thomas he had served in like capacity for other insurance companies, which plaintiff well knew at the time of his...
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