Cryer v. Gulf Ins. Co.

• Decision Date: 09 April 1973
• Docket Number: No. 9292,9292
• Citation: 276 So.2d 889
• Parties: John P. CRYER v. GULF INSURANCE COMPANY.
• Court: Court of Appeal of Louisiana — District of US

Page 889

276 So.2d 889

John P. CRYER v. GULF INSURANCE COMPANY.

No. 9292.

Court of Appeal of Louisiana, First Circuit.

April 9, 1973.

E. Drew McKinnis, McGehee & McKinnis, Baton Rouge, for appellant.

Kenneth E. Barnette, Seale, Smith & Phelps, Baton Rouge, for appellee.

Before SARTAIN, BLANCHE and WATSON, JJ.

WATSON, Judge ad hoc.

This is an appeal by plaintiff, John P. Cryer, from a judgment of the trial court awarding him a certain sum as the value of a bulldozer damaged by fire and insured for fire loss by Gulf Insurance Company, defendant. Plaintiff complains on appeal that the award is inadequate and that he should have been granted penalties and attorney's fees.

On April 9, 1971 plaintiff's Allis Chalmers bulldozer, known as an HD--21A, was burned by a fire of unknown origin. The bulldozer had been obtained by plaintiff in exchange for clearing work performed on a large tract of land, and since the acquisition, the bulldozer had been repaired and improved by plaintiff's employees with parts obtained from the Allis Chalmers dealer in Baton Rouge, the Furlow-Laughlin Company.

The plaintiff had insured his bulldozer against fire loss and other perils through a policy of insurance issued by Gulf Insurance Company for a face amount of $25,000, after consulting with the personnel at Furlow-Laughlin concerning the amount of insurance he should carry. The HD- 21A, reflected by the record to be an extremely large bulldozer, was acquired by plaintiff in July, 1969 or some 22 months prior to the fire. There is no dispute that the bulldozer was in good operating condition at the time of the fire and that plaintiff had paid $7,611.75 to Furlow-Laughlin in connection with reconditioning the piece of equipment.

Immediately after the fire, plaintiff notified the defendant of his loss, although no formal proof of loss was ever filed. He obtained an estimate of repairs from Furlow-Laughlin, to whose premises the machine had been moved for inspection and partial disassembly. The Furlow-Laughlin repair estimate was.$17,459.21. The burned bulldozer was also inspected by representatives of the defendant including the witnesses Wroten and Doyle. (Doyle was engaged by the defendant to investigate the loss; he appeared as an expert witness although his qualifications in heavy machinery as revealed by extensive cross- examination are not impressive.) Doyle proceeded to obtain a repair estimate from Gerald Mayeaux, the owner and operator of a tractor repair business in Baton Rouge. This estimate was in the amount of $12,500. This was the result of apparently making a closer inspection and learning of the dispute between the parties. Whether this increase in the Mayeaux estimate was conveyed to Doyle is not clear from the record.

The claim continued to be unresolved and plaintiff employed an attorney to represent him. A conference was held among the representatives of the insurance company, plaintiff and his attorney, and the personnel of Furlow-Laughlin on May 29, 1971. Plaintiff's attorney directed letters to the defendant on May 31, 1971 and June 16, 1971 making formal demand for payment of the claim, although never actually specifying the amount demanded.

A petition was filed on June 21, 1971 in which the plaintiff claimed the amount of $25,000 for his loss plus statutory penalties and attorney fees. The defendant deposited a check payable to plaintiff in the amount of $12,500 with the Clerk of Court on July 23, 1971 without prejudice to plaintiff's rights to claim additional damages.

After trial on the merits, the trial court concluded that an award in the amount of.$17,459.21 less the $12,500 previously paid to plaintiff was appropriate. In making this award the trial court apparently accepted the Furlow-Laughlin evaluation of the buldozer at $25,000 but stated that, since the repair estimate was less than its total value, the proper measure of damages was the cost of repairs.

Appellant complains of the decision on the grounds that (1) the trial court did not award the policy limits of $25,000 less the salvage value and (2) the trial court did not grant penalties and attorney's fees.

On the question of the amount of the loss, one conclusion stands out from the record and that is that the value of a used bulldozer is the subject of much disagreement.

We believe that the trial court erred in determining the amount of the loss. The trial court correctly stated the principle of law that if an object can be repaired for less than its value the measure of the award is the cost of repairs, but erred in concluding that this particular bulldozer could be repaired. Virtually all of the witnesses who testified agreed that the bulldozer was a total loss; that it would be uneconomic to repair it; and that, if repaired on the basis of the repair estimates, the witnesses would be unwilling to guarantee the machinery following the repairs. Therefore, we find that the trial court erred in concluding that the bulldozer could be repaired for the sum of $17,459.26. The correct measure of the loss where the object cannot be economically repaired is the difference between the value on the date of the accident and the salvage value. Bennett v. Achord, 238 So.2d 764 (La.App. 1 Cir. 1970); Greenberg v. New Orleans Public Service, 74 So.2d 771 (La.App .Or.1954).

It is noteworthy that almost all of the witnesses testifying concerning the damages to the bulldozer feared hidden damages as a result of the intensity of the heat. We are particularly impressed with the point made in the record that the frame of the bulldozer may well have been weakened by the fire. Therefore, we...