Milwaukee Insurance Company v. Kogen

• Decision Date: 11 February 1957
• Docket Number: 15578.,No. 15577,15577
• Citation: 240 F.2d 613
• Parties: MILWAUKEE INSURANCE COMPANY, Appellant, v. Max KOGEN, doing business as Kogen Fur Company, Appellee. INDUSTRIAL INSURANCE COMPANY, Appellant, v. Max KOGEN, doing business as Kogen Fur Company, Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

240 F.2d 613 (1957)

MILWAUKEE INSURANCE COMPANY, Appellant, v. Max KOGEN, doing business as Kogen Fur Company, Appellee.

INDUSTRIAL INSURANCE COMPANY, Appellant, v. Max KOGEN, doing business as Kogen Fur Company, Appellee.

Nos. 15577, 15578.

United States Court of Appeals Eighth Circuit.

February 11, 1957.

Frank X. Cronan, Minneapolis, Minn. (Harold J. Carroll, Minneapolis, Minn., on the brief), for appellants.

Frank Claybourne, St. Paul, Minn. (Doherty, Rumble & Butler, St. Paul, Minn., on the brief), for appellee.

Before SANBORN, JOHNSEN and WHITTAKER, Circuit Judges.

SANBORN, Circuit Judge.

The only substantial question for decision by this Court in these actions upon two Minnesota standard fire insurance policies (issued under § 65.01, M.S.A., prior to its repeal) is whether the District Court clearly misconceived or misapplied the substantive law of that State in ruling that the effect of a non-waiver agreement, entered into between the insured and his insurers shortly after he had furnished them with sworn statements of loss, was to extend the time within which an appraisal by arbitration of the fire loss, in conformity with the terms of the policies, might be demanded by the insured.

Federal jurisdiction is based on diversity of citizenship and amount in controversy. The actions were consolidated for trial and tried to a jury, which returned verdicts in favor of the plaintiff, the insured. The burden of demonstrating that the judgments appealed from are the result of a clear misconception or misapplication by the District Court of local law is upon the appellants, the insurers. As this Court has frequently pointed out, that burden, in cases such as these, is a heavy one. National Bellas Hess, Inc., v. Kalis, 8 Cir., 191 F.2d 739, 741; Kimble v. Willey, 8 Cir., 204 F.2d 238, 243, 38 A.L.R.2d 814. The question for review is not whether the conclusion of the trial court as to a question of local law is necessarily correct, but whether the court reached a permissible conclusion, Citizens Insurance Co. of New Jersey v. Foxbilt, Inc., 8 Cir., 226 F.2d 641, 643, that is, such a conclusion as this Court reasonably may believe that the Supreme Court of the State would or might reach, were it called upon to decide the question.

Briefly stated, the following is the factual situation out of which these controversies arose. Kogen, the plaintiff (appellee), was a retail furrier doing business in St. Paul, Minnesota. The defendants (appellants), Milwaukee Insurance Company and Industrial Insurance Company, had insured him, under separate policies, against loss or damage by fire to the contents of his store. The contents were damaged by fire on March 8, 1955. He retained, as his adjuster, Joseph Supornick, of Joseph Supornick & Son, Inc. Supornick on March 9 mailed each of the insurers a sworn statement of loss. On March 11, Kogen's adjuster and the adjusters for the insurers met at Kogen's store to check the items of loss and damage. There was agreement as to the damage to the store fixtures. The adjusters did not reach an accord as to the value of "totally destroyed" items of his stock, which Kogen asserted were new fur coats. He was to furnish invoices to substantiate his claim in that regard. On March 12, the adjuster for the Industrial Insurance Company sent to the adjuster for Kogen a letter reading as follows:

"March 12, 1955 "Mr. Irving Lampert, Adjuster Joseph Supornick & Son, Inc. Guardian Building St. Paul, Minn "Re: Max Kogen dba Kogen Fur Company Industrial Pol. No. OC 59960 Loss March 8, 1955. "Dear Sir:

"We are enclosing a Non-Waiver Agreement in duplicate for the signature of assured.

"Will you kindly have these executed and return one copy to us, so that we may proceed with the inspection and appraisal of damage for the above party. Thank you.

"Very truly yours J. B. Tonskemper "JBT James B. Tonskemper Adjuster"

The following non-waiver agreement, dated March 14, which was referred to in the letter, was signed by the insured and by the adjusters for the insurers:

"It Is Hereby Understood and Agreed by and between the parties signing this agreement, that any action taken by the hereinafter named Insurance Company or Companies in investigating the cause of loss, or investigating and ascertaining the amount of sound value, or the amount of loss and damage which occurred on March 8th, 1955, shall not waive or invalidate any of the terms or conditions of any policy or policies, and shall not waive or invalidate any rights whatever of either of the parties to this agreement.

"It Is Further Understood and Agreed that neither the examination of the insured or of any other person, the examination of the books of account, bills, invoices, or other vouchers of the insured or any other person, the request of any other information, or the furnishing thereof, or the incurring of any trouble or expense by the insured shall waive or invalidate any of the terms and conditions of the policy or policies, or any defense thereunder.

"The Intent of this agreement is to preserve the rights of all parties hereto, and to permit an investigation of the cause of loss, the investigation and ascertainment of the amount of sound value, or the amount of loss and damage, or any of them without regard to the liability of the hereinafter named Insurance Company or Companies.

"Witness our hands in duplicate this 14th day of March, 1955.

"Industrial Insurance Company of New Jersey Max Kogen "By: J. B. Tonskemper "Milwaukee Ins. Co. of Wisc. "By: Ollie R. Eylar"

At the time the non-waiver agreement was signed, both Kogen and the insurers had the right to demand an appraisal of the loss and damage under the arbitration provisions of the policies in case of a failure of the parties to reach an agreement.¹ So far as the record shows, the parties, at the time the non-waiver agreement was signed, were attempting to reach an agreement as to the amount of loss. There was another meeting of the adjusters at the store on March 18, but without result.

On March 26, slightly more than fifteen days after sworn statements of loss had been furnished...