Connecticut Fire Insurance Company v. Fox, 8163.
| Citation | 361 F.2d 1 |
| Decision Date | 26 May 1966 |
| Docket Number | No. 8163.,8163. |
| Parties | CONNECTICUT FIRE INSURANCE COMPANY, a corporation, and General Adjustment Bureau, Inc., a corporation, Appellants, v. A. H. FOX and Edith Fox, dba Firebird Motor Hotel, Appellees. |
| Court | United States Courts of Appeals. United States Court of Appeals (10th Circuit) |
Brooke Wunnicke and T. A. Fennell, of Williams, Wunnicke & Fennell, Cheyenne, Wyo., for appellants.
Louis A. Mankus, Cheyenne, Wyo., for appellees.
Before PICKETT, HILL and SETH, Circuit Judges.
This is a suit against Connecticut Fire Insurance Company to recover on a fire insurance contract and also against General Adjustment Bureau, Inc. (hereafter called G.A.B.) and the above named insurer for negligence in adjusting the loss. The jury returned a verdict of $92,000 for the plaintiff against both defendants and this appeal was taken.
The appellant insurance company admits the fire insurance policy was issued to the appellees and that it was in effect on March 25, 1964, when the fire occurred. Its defense, very simply, is that the appellees caused the fire and that they failed to file a timely proof of loss. The jury, however, by its interrogatories specifically found that the appellees did not cause the fire and that the time for filing the proof of loss was extended by the agents of G.A.B. with the insurer's approval.
By their appeal, appellants assert that the proof of loss was untimely as a matter of law, that the trial court's instructions on their burden of proof to show arson were erroneous, that there was no evidence of negligence against G.A.B. to justify liability against it, and finally that the verdict forms were defective because the jury could not exonerate either defendant although one defendant was sued in contract and the other in tort for negligence.
Insofar as G.A.B. is concerned, we agree with appellants that there is no evidence of negligence upon which to predicate liability against it. In fact, the trial court gave no instruction to the jury upon G.A.B.'s negligence and appellee now in argument concedes this point. Clearly then, that part of the verdict against G.A.B. must be set aside. It is true as appellants point out, the trial court submitted joint verdict forms to the jury. However, due to the lack of any evidence of negligence against G.A.B. or any instructions thereon, it is clear the jury could only impose liability on the insurer under the insurance contract. The error was harmless as to the insurer and must be so considered under the mandate of Rule 61. In any event, the time for appellants to complain of the verdict form was at the trial, not now for the first time on appeal.1
The facts surrounding the fire and the events thereafter are not in serious dispute. Appellees A. H. Fox and Edith Fox are the sole proprietors of the Firebird Motor Hotel in Cheyenne, Wyoming. In the early morning hours of March 25th, 1964, a substantial portion of the motel was either destroyed or damaged by fire. There seems to be no doubt that the fire was the result of arson although no one has been prosecuted for that crime.
The evidence clearly shows that the insurer, Connecticut Fire Insurance Company, was aware of the fire within a few hours after it occurred. The local agent for the company who sold the policy, Sanford Griffin, testified he was so informed by the insurance commissioner's office. Griffin then immediately notified the district office in Denver where he was advised that they were already aware of the matter and had referred the case to G.A.B. for adjustment. Mr. Fox said he also notified Mr. Griffin on the morning of the fire but Griffin said Fox did not. According to Griffin, he and two agent adjusters of G.A.B. drove out to the motel during the morning after the fire and inspected the damage. Harold Ingebretsen, who was district manager for an insurance group in Denver which included the insurer company, also drove to Cheyenne, to observe the damage on March 26th.
According to Fox, whose testimony was largely corroborated by his wife, on the same morning of the fire, two agents of G.A.B., named McMaster and Barnes, arrived at the motel and informed them they represented G.A.B. The adjusters then asked the Foxes to sign a "non-waiver" agreement which they declined to do. On the next day, March 26th, a Mr. Foster appeared on the scene who was destined to thereafter play a key role in the events to follow. Foster was an adjuster for G.A.B. who specialized in significant fire losses and, according to McMaster, Foster came to Cheyenne to take charge of the adjustment. Where the other adjusters had failed, Foster persuaded the Foxes to sign the non-waiver agreement on March 26th even though their attorney apparently advised against it. The non-waiver agreement, set forth in detail below2 essentially provided that no action of the insurer in investigating the loss would waive any conditions of the policy and that no representative of the company has any authority to waive any conditions of the policy unless such waiver be in writing.
In addition to obtaining signatures on the non-waiver agreement, Foster took a statement about the fire and explained the necessary procedures to be followed in order to recover on the policy, although apparently he said nothing about the proof of loss requirement. Foster also told the Foxes to winterize and secure the property that was still useable and to make available the remaining units of the motel that were not damaged and to continue in business with those units. Foster supplied the Foxes with inventory sheets with instructions to itemize the contents of the motel that were damaged. According to Mrs. Fox, Foster also told them to keep a file on everything that was done including the expenses for cleaning up the property, and that it would be included in the settlement. Also on March 26th, Agent McMaster of G.A.B. took a narrative statement and filled out a proof of loss for a guest at the motel and $100 was paid her by the insurer for damages to her property under an extension of coverage provision of the policy.3
On the night of March 26th, Mr. Fox was taken to the hospital with a heart attack and remained there until April 7th. During that time, Mr. Griffin, sales agent for the insurer, assisted Mrs. Fox in preparing an inventory of the damaged contents. When Mr. Fox returned from the hospital, he completed this inventory by filling in the value of the damaged property. The next meeting of the parties involved was on May 5th when Mr. Foster returned to the motel. According to Mr. Fox, he then presented Foster with a complete inventory of losses including an estimated dollar value and also gave Foster some bids made by various companies to clean up the damage. Foster testified that Fox then presented an estimate of about $96,000 from the Rogers Construction Company to rebuild the damaged units but he rejected this because it was a lump sum bid and not in detail. Foster also recalled the inventory forms were not as he requested and at this time a dispute arose between him and Fox over what value or price to use for the damaged property.
On May 12, Mr. Wyatt from the Underwriters Salvage Company and Mr. Richman from a furniture company visited the Foxes at the motel stating they were sent by G.A.B. Wyatt apparently came to verify the inventory made by the Foxes which he did with Mr. Fox's help. According to Fox, Wyatt found no discrepancies in the inventory and in fact found it most complete. On May 15th Mr. Foster accompanied by Mr. Hammond of the Hammond Construction Company, visited the motel. They spent several hours measuring and sketching the burned units of the property and then departed. Apparently no discussion of loss occurred on this visit.
The next meeting and the one most significant was on June 3rd. Present at this meeting were the Foxes, Foster, Griffin and Agents McMaster and Perry of G.A.B. Foster accused Mr. Fox of not complying with the policy in substantiating the losses. Foster then presented a bid by the Hammond Construction Company to repair the property as opposed to rebuilding it. According to Mrs. Fox, she and her husband then indicated they would be satisfied with that providing Hammond could get them rebuilt before the tourist season. Mr. Fox however appeared a little worried for fear Hammond couldn't do the job properly for that figure and inquired about a completion bond. Mrs. Fox did testify that Foster wanted them to accept that money in settlement. But, they did not. It was at this time that Foster handed Fox a letter with a blank proof of loss form attached and told him he was extending the proof of loss to July 3rd. The letter set forth the policy requirements in the event of loss4 and pointed out that although the sixty days for filing the proof of loss had expired, if the proof of loss was filed before July 3rd, no objection would be made. The letter concluded that it was not an admission of liability nor a waiver of any conditions other than the extended time for filing a proof of loss. It was signed: Connecticut Fire Insurance Company, By G.A.B. per P. C. Foster, General Adjuster. According to Fox, he then told Foster he would fill out the proof of loss immediately; that he wasn't aware he had to do so before because in the past an adjuster had always done it.
The Foxes did complete the proof of loss and together with the inventories sent them to the insurer on June 6th. On about June 8th, two attorneys representing the insurer went to see the Foxes and told them everything would be okay and that they would get the whole matter settled as quickly as possible. Fox, however, heard nothing from anyone and on July 7th instituted this suit. The insurer rejected the proof of loss thirty days thereafter.
Both Mr. and Mrs. Fox related that in their past experience, an adjuster had always filled out a proof of loss and McMaster of G.A.B. candidly admitted that usually the adjuster does fill out the proof of...
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