Ciapanna v. Lincoln Fire Ins. Co. of New York

• Decision Date: 21 April 1936
• Citation: 56 P.2d 1113,153 Or. 395
• Parties: CIAPANNA v. LINCOLN FIRE INS. CO. OF NEW YORK.
• Court: Oregon Supreme Court

56 P.2d 1113

153 Or. 395

CIAPANNA v. LINCOLN FIRE INS. CO. OF NEW YORK.

Supreme Court of Oregon

April 21, 1936

Department 1.

Appeal from Circuit Court, Multnomah County; Robert Tucker, Judge.

Action by Michele Ciapanna, by Lena Ciapanna his guardian ad litem against the Lincoln Fire Insurance Company of New York, on a fire insurance policy issued by the defendant, describing a house owned by the plaintiff. The complaint set forth two causes of action, one of which was based upon a fire which occurred March 15, 1933, resulting in damages to the alleged amount of $1,500, and the other based upon a fire which occurred in the same premises. August 15, 1933, resulting in damages to the alleged amount of $500. The circuit court directed a verdict in defendant's favor upon the first cause of action and in the plaintiff's favor upon the second cause of action for the agreed amount of $500, and the plaintiff appeals.

Reversed and remanded.

C. C. Hall, of Portland (Robert A. Leedy, of Portland, on the brief), for appellant.

J. C Veazie, of Portland (Veazie & Veazie, of Portland, on the brief), for respondent.

ROSSMAN Justice.

The parties agree that the defendant issued the $2,000 policy of fire insurance involved in this action, and that the policy was in effect at all times mentioned in the complaint. It covers a small dwelling house owned by the plaintiff. The parties also agree that two fires visited the premises, one on March 15, and the other on August 15, 1933. The damages inflicted by the first fire are in dispute. No repairs were made after that fire. The parties agree that the second fire caused additional damage to the extent of $500.

The question presented by this appeal is whether the circuit court erred when it held that the plaintiff could not recover for the loss inflicted by the fire of March 15, 1933, because the damage done by that fire had not been determined by a board of appraisers, in accordance with the provisions of the policy. The defendant had insisted, before the occurrence of the second fire, upon such an appraisement. There is no issue concerning the second fire.

The policy of insurance contains, among others, the following provisions: "This company shall not be liable beyond the actual cash value of the property at the time any loss or damage occurs, *** In the event of disagreement as to the amount of loss the same shall, as above provided, be ascertained by two competent and disinterested appraisers, the insured and this company each selecting one, and the two so chosen shall first select a competent and disinterested umpire; the appraisers together shall then estimate and appraise the loss, stating separately sound value and damage, and, failing to agree, shall submit their differences to the umpire; and the award in writing of any two shall determine the amount of such loss; ***"

Accordingly to the proof of loss which the plaintiff filed with the defendant, the fire of March 15th inflicted damages to the extent of $1,800. Immediately after the fire an adjuster who represented the plaintiff, and another, who represented the defendant, attempted to adjust the loss. They concluded that $785 damage was caused by the fire; but their efforts to effect a settlement failed when the plaintiff refused to accept that amount of money. About this time the defendant began to insist upon an appraisement of the loss, in conformity with the above-quoted section of the policy. It appointed an appraiser, notified the plaintiff of his name and requested that the plaintiff also appoint an appraiser. Thereafter, it frequently repeated its demands. The plaintiff was a common laborer, illiterate, and quite ignorant. He experienced difficulty in understanding the purpose and significance of an appraisal. Repeated explanations apparently, failed to enlighten him. He believed that he was entitled to have the house reconstructed by the defendant, and could not understand why he should accept anything else. Efforts to make him understand that he was required to submit to an appraisal only caused him to become excited. He had an impediment in his speech, and, in his endeavors to express himself, switched back and forth between the English and Italian languages, thus rendering it impossible for others to understand him, while his overwrought condition precluded his understanding the meaning of the others. Later, the plaintiff was adjudged insane and was committed to the State Hospital. Defendant's last demand for an appraisal was made in a letter dated August 2, 1933. It there stated: "A demand is hereby made that the matter of Cash Value and Loss and Damage on said dwelling and articles contained therein be submitted to a Board of Appraisers; that as to both of said items we nominate and select W. L. Buckner as an appraiser for the Company; that you are hereby requested to submit the name of the appraiser that you may desire to represent you."

Without adverting to this phase of the situation further, we state that the uncontradicted evidence indicates that the defendant, in good faith, sought an appraisal. We are satisfied that the plaintiff's failure to yield to the defendant's demand was not the result of bad faith, but of ignorance.

While the defendant was still insisting upon an appraisal, and while the plaintiff, through an attorney, was trying to obtain a settlement without an appraisal, the second fire, that is, the one of August 15, 1933, occurred.

According to the testimony, the combined effect of the two fires damaged the structure 60 per cent. and the Portland ordinances will not permit of its being repaired. November 7, 1933, the plaintiff, in a letter prepared by his attorney, stated to the defendant: "I hereby give you notice that I consent to an appraisal of the cash value, loss and damage, to the dwelling and articles covered by the above-mentioned insurance policies, and that I nominate and select J. W. Darling as my appraiser." December 22, 1933, the plaintiff and his attorney addressed another letter to the defendant, from which we quote: "We hereby offer to appoint an appraiser to represent Michele Ciapanna in the matter of arbitrating the fire losses under the above policies, and we hereby now, and by this letter, offer to appoint such arbitrator to represent the insured. ***" From the defendant's reply to these letters we quote: "in answer to same you are advised that there appears to be no occasions for an appraisal from the loss under fire of August 15, 1933, as the amount of that loss has been agreed upon, and the Company has offered payment and tendered draft in payment of same several times; that after the fire of March 15, 1933 repeated demands for an appraisal were made by us as representatives of the Lincoln Fire Insurance Company, resulting only in positive refusals by the assured, and that under these circumstances, and in view of the complete destruction of the subject matter of insurance by the latter fire, the request of the assured for an appraisal comes too late for consideration." In explanation of its refusal to consent to an appraisal after the second fire, the defendant contends that: (1) After the first fire it was still possible to determine, from the charred materials, the kind, size, and quality of the materials out of which the house had been built, as well as the quality of the workmanship; therefore, an accurate appraisal could have been made at that time without recourse to testimony. (2) After the second fire much of this material had been destroyed; therefore, the defendant's right to a fair appraisal had been prejudiced. And (3) between the first and second fires some damage was done to the house by factors for which the defendant was not liable-vandalism and weather-and it was impossible to determine from the conditions as they appeared after the second fire the extent to which these causes had damaged the structure.

The house was 18 by 42 feet in its ground floor dimensions. One of the defendant's witnesses described it thus: "The building was a one and a one-half story, shingled roof, box construction, concrete foundation, was shiplapped, cloth lined and papered on the main floor, with the exception of the kitchen which was ceiled. The upstairs was plastered. There was a living room, dining room and kitchen-pardon me-living room and dining room in the main section of the building on the main floor and the kitchen, bath room and pantry in the built-in addition at the rear. That was a one-story section. There were two bedrooms upstairs which were plastered. The building was finished on the exterior with shingles." It was at least thirteen years old. Some of the electric fixtures were of an obsolete style and others were merely drop cords. The uncontradicted testimony of one of defendant's witnesses, who visited the structure immediately after the first fire, indicates that the workmanship was mediocre, and that the material out of which it was built was No. 3 grade, except the interior finish, which was No. 2. A bathtub stood in the bathroom, but it had never been connected with the plumbing. The house had no heating system.

We shall now review the testimony which describes the damage done by the first fire. A. E. Hearn, an adjuster, who represented the defendant and who was called as its witness was the only witness who attempted to give a comprehensive description of the damage done by the fires. His testimony is uncontradicted, unless we deem the following general statement made by the plaintiff's wife to be at variance with it: "*** all burned; we got nothing left; the window broken, floor, roof, everything." She gave no other description of the damage done by the fires, and her quoted language, possibly, referred to the combined effect of the...