Headrick v. Pennsylvania Millers Mut. Ins. Co.

• Decision Date: 11 February 1970
• Docket Number: No. 2969,2969
• Citation: 232 So.2d 319
• Parties: Mildred HEADRICK, Plaintiff-Appellee, v. PENNSYLVANIA MILLERS MUTUAL INSURANCE COMPANY, Defendant-Appellant .
• Court: Court of Appeal of Louisiana — District of US

Page 319

232 So.2d 319

Mildred HEADRICK, Plaintiff-Appellee, v. PENNSYLVANIA MILLERS MUTUAL INSURANCE COMPANY, Defendant-Appellant .

No. 2969.

Court of Appeal of Louisiana, Third Circuit.

Feb. 11, 1970.

Rehearing Denied March 18, 1970.

Dubuisson & Dubuisson, by William A. Brinkhaus, Opelousas, for defendant-appellant.

Daniel J. McGee, Mamou, for plaintiff-appellee.

Before FRUGE , HOOD, and CULPEPPER, JJ.

FRUGE , Judge.

This is an action on an insurance contract for reimbursement of losses sustained by plaintiff-insured from the defendant-insurer as the result of a fire which totally destroyed plaintiff's home and its contents. Plaintiff also requested penalties and attorney fees for defendant's arbitrary and capricious refusal to pay the claim within the sixty-day period provided by La. R.S. 22:658. The trial court awarded judgment in favor of plaintiff in the sum of $42,690.00 for loss of property and additional living expenses, $5,122.80 in penalties, and $12,000.00 in attorney fees. Defendant has appealed to this court and plaintiff answered the appeal requesting an increase in penalties and living expenses or in the alternative the reservation of the right to assert the claim for additional living expenses in another action and to increase the attorney fees to $17,500.00.

The record shows that defendant and plaintiff entered into a contract of insurance on November 27, 1967 covering plaintiff's home and its contents. On January 12, 1968, the house and its contents were totally destroyed by fire. Immediately after the fire, at defendant's request plaintiff filled out a list itemizing the losses that she had incurred. Plaintiff was told that the claim would be paid in a few weeks. However, no action was taken by defendant until March 7, 1968, when defendant mailed a formal proof of loss to plaintiff requesting that she fill it out, sign it, and return it. Plaintiff's attorney said the request would be complied with if it were clear that a new sixty-day period would not be initiated. No agreement could be reached and plaintiff instituted this suit.

Defendant contends that the circumstances surrounding the fire were such as to justify defendant's not paying the claim at all and certainly not within the sixty-day period provided by La. R.S. 22:658. When the plaintiff initially reported the loss, she was asked to submit a list of the contents of the house and was assured that payment would be made within a few weeks. There was no mention of the possibility of arson or other suspicious circumstances with would prevent payment of the claim. However, Lt. Francis Fruge of the State Police, who witnessed the fire, called defendant's office about two weeks after the fire and informed Mr. Wallace Montet that arson was definitely involved in the burning of the house and that there were several suspects in the cast. Two of these suspects claimed that they burned the house at the request of Jo Jo Fontenot, a close friend of Miss Headrick's, to whom she is now married.

The trial judge placed no reliance on the testimony of the two individuals, who had numerous contradictions in their testimony. There was reason to believe that at least one of these individuals had a grudge against Jo Jo Fontenot, and the obvious manner in which they said they burned the house and received the payoff indicated an attempt to frame Fontenot. The trial court felt that their testimony was unreliable and a complete fabrication. In any event, Miss Headrick was in no way implicated which is necessary to defeat her claim.

Defendant also tried to show that plaintiff's financial situation gave her a motive for burning her house. Although it was shown that Miss Headrick had missed some work while ill and owed some medical bills they were not of such a substantial nature as to indicate that Miss Headrick burned her house. The plaintiff had substantial income in her employment with Grolier, Inc., and her earning capacity was steadily increasing. Accordingly, the defendant failed to show Miss Headrick had a motive for burning the house or that she had any connection with the arson.

Defendant further contends that by the terms of the contract the insurer was not required to make any payment until a sworn proof of loss was signed and returned to the insurer. There is a clause in the insurance contract which calls for such a signed proof of loss. However, the insurer supplied Miss Headrick with claim forms and asked her to give an inventory without mentioning the formal proof of loss statement. Also when Miss Headrick filled out the papers supplied her and returned them to the office of the insurer no mention was made at that time of the requirement of a formal proof of loss.

It would seem that the behavior of defendant and its employees under these circumstances would amount to a waiver of the requirement of a sworn proof of loss in the event that it was required by the terms of the policy as the trial court said in its reasons for judgment. (Tr. 284)

'Under these circumstances and the other evidence the Court finds that the insurer was not justified in failing and refusing to pay the claim or any part of it admittedly due on the ground that the insurer did not receive the additional form mailed to the insured in March.

'And this is so regardless of whether Miss Headrick actually mailed the form sent to her much later or not. This was at most a technical formality at that point. Under other circumstances the question whether Miss Headrick mailed the form sent later might very well be significant, but it is not significant under these facts.'

The trial court properly held that the defendant-insurer's reliance on a 'technicality' after considerable delay could not serve to defeat plaintiff's claim.

In Sensat v. State Farm Fire and Casualty Company, 176 So.2d 804, 807 (La.App.3d Cir., 1965), the court stated:

'Defendant's contention that no proof of loss was submitted is adequately answered by Mayes v. State Farm Mutual Automobile Insurance Co., La.App.2nd Cir., 141 So.2d 890. There it was held that since the purpose of requiring the...