INTERNATIONAL SERVICE INSURANCE CO. v. Home Insurance Co.

• Citation: 276 F. Supp. 632
• Decision Date: 30 November 1967
• Docket Number: Civ. No. 66-129.
• Parties: INTERNATIONAL SERVICE INSURANCE COMPANY, a corporation, Plaintiff, v. The HOME INSURANCE COMPANY, a corporation, and Haskell Foods, Inc., a corporation, Defendants.
• Court: U.S. District Court — Western District of Oklahoma

276 F. Supp. 632

INTERNATIONAL SERVICE INSURANCE COMPANY, a corporation, Plaintiff, v. The HOME INSURANCE COMPANY, a corporation, and Haskell Foods, Inc., a corporation, Defendants.

Civ. No. 66-129.

United States District Court W. D. Oklahoma.

November 30, 1967.

Charles C. Baker, Abernathy & Baker, Shawnee, Okl., for plaintiff.

Walter D. Hanson of Hanson, Fisher, Tumilty, Peterson, Melton & Tompkins, Oklahoma City, Okl., for defendants.

MEMORANDUM OPINION

DAUGHERTY, District Judge.

Defendant Haskell Foods, Inc. (Haskell) was and is engaged in the food canning business in Haskell, Oklahoma. It had a fire insurance policy on its canning plant with the Plaintiff International Service Insurance Company (International) and a business interruption policy with the Defendant The Home Insurance Company (Home). Haskell sustained a severe fire at its canning plant. Haskell and International effected an arrangement under which International paid an agreed amount to Haskell for the fire loss and International was to have the salvage. The business interruption policy of Home permitted it to require its insured Haskell to conduct an expedited debris clearing and salvage operation at the expense of Home in order to reduce the amount of business interruption loss payments to be made under its policy. Such expense, however, could not exceed the savings effected on business interruption loss payments.

After International had started its debris clearing and salvage operation (using a salvor from Kansas City, Missouri), Home indicated its desire for an expedited salvage operation. Home, Haskell and International met in Haskell, Oklahoma (by their respective representatives) and an oral agreement was reached whereby International would perform an expedited rather than a normal debris clearing and salvage operation with Haskell to pay the expense thereof. When the operation was completed at the plant site International presented its bill for $26,002.24 which Home refused to pay, claiming that it had agreed only to pay for certain items which amounted to much less ($2346.85) than the bill submitted by International.

International then sued Home and Haskell, proceeding against Home on two theories, namely, for breach of the oral agreement above mentioned and recovery of the amount due thereunder, and in subrogation by enforcing the rights of Haskell against Home for the expedited operation. The case was tried to a jury. During the trial Haskell was dismissed as a party to the case. It was agreed that the jury would receive the controversy over the disputed oral agreement and determined the amount Home owed International under the same and that the Court would reserve the subrogation claim, and in connection therewith request the jury to answer two interrogatories, namely, what was the total cost and expense of the expedited operation conducted by International and what was the reduction in loss under its business interruption insurance policy because of the expedited operation.

The jury found on the oral agreement issue that Home owed International $22,659.58. By answers to the interrogatories submitted the jury found that the total cost and expense attributable to the expedited debris clearing and salvage operation was $26,002.24 and that the said expedited salvage operation reduced the loss under Home's business interruption insurance policy by $29,000.00. In these circumstances, the Court must now determine the reserved issue. International and Home have submitted briefs.

It is said with reference to subrogation:

"No general rule can be

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