Moewes v. Farmer's Ins. Group

• Citation: 641 P.2d 740
• Decision Date: 04 March 1982
• Docket Number: No. 5580,5580
• Parties: Frances D. MOEWES, Appellant (Defendant and Third-Party Plaintiff), J.D.C., Inc. (Defendant), v. FARMER'S INSURANCE GROUP and Fire Insurance Exchange, Los Angeles, California, Appellees (Third-Party Defendants), v. AMERICAN APPLIANCE COMPANY (Plaintiff).
• Court: United States State Supreme Court of Wyoming

Page 740

641 P.2d 740

Frances D. MOEWES, Appellant (Defendant and Third-Party Plaintiff), J.D.C., Inc. (Defendant), v. FARMER'S INSURANCE GROUP and Fire Insurance Exchange, Los Angeles, California, Appellees (Third-Party Defendants), v. AMERICAN APPLIANCE COMPANY (Plaintiff).

No. 5580.

Supreme Court of Wyoming.

March 4, 1982.

Stephen L. Simonton, Simonton & Simonton, Cody, signed the brief and appeared in oral argument on behalf of appellant.

Ross D. Copenhaver, Powell, and Tracy J. Copenhaver, Legal Intern, Copenhaver & Kahl, Powell, signed the brief on behalf of appellees. Ross Copenhaver, Powell, appeared in oral argument.

Before ROSE, C. J., and RAPER, THOMAS, ROONEY and BROWN, JJ.

RAPER, Justice.

Summary judgment was granted by the district judge in favor of the third-party defendant-appellee (Exchange). The defendant, third-party plaintiff-appellant (Moewes) sets out the issue on appeal:

"Under the circumstances of this case, did Appellee (Third-Party Defendant below) owe a duty of care, assumed or contractual to Appellant (Third-Party Plaintiff below) to warn her as to the consequences of the contractor's failure to pay materialmen and suppliers or to otherwise protect her from mechanics' liens?"

Exchange presents as the issue for this court a slightly revised version:

"Did Appellant (Third-Party Plaintiff below) by her claim raise any material issues of fact which would indicate that Appellees (Third-Party Defendants below) owed a duty of care, assumed or contractual to warn Appellant as to the consequences of the contractor's failure to pay materialmen and suppliers or to otherwise protect her from mechanic's liens?"

We will affirm.

Moewes purchased from Exchange an insurance policy to cover various risks of damage to her home, including loss by fire. She suffered a loss by fire in her kitchen caused by overheated grease. Exchange's area adjuster on the day following the conflagration met with Moewes, surveyed the damage, and requested her to obtain bids from various contractors for repair of the residence. J.D.C., Inc. was the low bidder. The adjuster informed her that he had no authority to authorize a contractor to proceed with repairs and that she would have to authorize the selected contractor to proceed; this, she did.

When Exchange's adjuster settled the loss, the check to Moewes also carried the name of J.D.C., Inc., the contractor, as payee. The contractor did not pay a supplier, the plaintiff in this action to foreclose its claimed materialman's lien. Other suppliers, as well, were not paid. The materialman, plaintiff in this action, is not a party to this appeal. Moewes paid off some of the other materialmen as a result of the failure of the contractor to pay. The check delivered to the contractor also included money Moewes was to receive for her painting of the smoke-damaged walls.

It is the claim of Moewes that Exchange's adjuster took charge of the repair and handled all the financial arrangements, and Exchange is therefore responsible for payment of the lien claims. She further asserts that she relied upon the expertise and knowledge of the adjuster, followed his instructions, directions and advice and relied upon him to counsel and assist in the fire loss; and he, on behalf of Exchange, negligently failed to advise her of any need for obtaining lien waivers or releases from the suppliers of materials to the contractor. It is her further claim that the policy of insurance provides for payment of the insurance proceeds to the insured but that the check was not only made payable to her but also the contractor.

As disclosed by depositions in the record, it is the policy of Exchange to place the contractor's name on drafts in payment for repairs arising from fire loss to insure that the work is completed and the mortgagee's interest protected. (The mortgagee of the property was not a party to this action.) A Mr. Axness, a professional insurance adjuster, testified by deposition that the contractor's name is usually placed on an insurance settlement check, "(b) ecause it's to keep a good working relationship with these contractors," but there is no legal obligation to do so. The insured, however, must authorize the contractor to proceed with the repairs. There is no affidavit or other material in the record that contradicts the evidence that this was the practice or custom in the business of adjusting insurance claims.

Deposition testimony further disclosed that the progress of work is followed by adjusters because, during repairs, other damage not originally figured for might be or perhaps there is discovered even less damage than originally estimated. There is no practice or custom in the insurance adjusting business of obtaining lien waivers from anyone. No evidence was introduced contradicting that claim.

The foregoing narrative from depositions in the record preliminarily acquaints us with the problem and the claim of Moewes. The factual situation as reflected from the record will be developed somewhat further during the course of this opinion.

It must be kept in mind that procedurally this case was disposed of at the district court level through summary judgment, so we must recognize the basic principles of that process in our disposition. In Reno Livestock Corporation v. Sun Oil Company, Wyo., 638 P.2d 147 (1981), we capsulized the holdings of a long string of cases into a consolidated rule:

" * * * When a motion for summary judgment is before the supreme court, we have exactly the same duty as the district judge; and, if there is a complete record before us, we have exactly the same material as did he. We must follow the same standards. The propriety of granting a motion for summary judgment depends upon the correctness of a court's dual findings that there is no genuine issue as to any material fact and that the prevailing party is entitled to judgment as a matter of law. This court looks at the record from the viewpoint most favorable to the party opposing the motion, giving to him all favorable inferences to be drawn from the facts contained in affidavits, depositions and other proper material appearing in the record. We separate the formal and pretended from the genuine and substantial so only the latter may be considered in eliminating the burden of a formal trial if only questions of law are left to decide; there must be no issue of material fact to decide. (Citation.) A material fact, expressed in various ways, is one having legal significance which would in a given case control the legal relations of the parties; one upon which the outcome of the litigation depends in whole or in part; one on which the controversy may be determined; one which will affect the result or outcome of the case depending upon its resolution; or one which constitutes a part of the plaintiff's cause of action or the defendant's defense. (Citation.) Summary judgment affords an opportunity for prompt disposition of a lawsuit in its early stages, permitting an end to unfounded claims and avoiding the expense of a full-fledged trial to both litigants and the state's judicial machinery. (Citation.)" 638 P.2d at 150-151.

Are there any material issues of fact in this case within the rule which ought to be tried? We can see none. Facts set out in this paragraph are undisputed. There was a fire in the residence of Moewes, insured by Exchange. A report of loss was made to the local agent of Exchange, who in turn arranged for an adjuster to settle the loss. The adjuster appeared promptly, examined the scene, requested Moewes to obtain bids, which she did. The adjuster advised her to select the contractor, which she did. The adjuster informed her that she must contact the contractor and direct it to proceed because he had no authority to do so. She did that. Since some of her appliances were not fully covered, at the suggestion of the adjuster, she worked out an arrangement with the contractor whereby she would do the painting and the contractor would pay in full for the new appliances. She selected the appliances and instructed the dealer to charge them to the contractor. She selected the cabinets and instructed the dealer to charge them to the contractor. She selected the new floor covering and instructed the dealer to charge it to the contractor. When it appeared the work was near completion, the adjuster for Exchange came around to Moewes and, in the presence of J.D.C.'s principal officer, the loss figure was settled. Upon departure of the contractor's representative, the adjuster presented to Moewes a draft for the cost made payable to her, her divorced husband still on the policy as an insured, and the contractor, and advised her not to deliver the draft to the contractor until she was satisfied that he should be paid. After obtaining her former husband's signature, two or three days later, she signed and delivered the draft to the contractor, who cashed the draft and disappeared without paying some of the materialmen. She was then stuck with their claims, some of which she paid.

It is Moewes' claim that the adjuster "took charge" and therefore placed Exchange in the role of a fiduciary with the duty of informing her that she should, before paying the contractor, obtain materialman lien waivers or require the contractor to produce evidence of payment or lien waivers from materialmen. In Moewes' affidavit resisting the motion for summary judgment, she concluded from the facts:

"That I believe that Mr. Cole, as agent for Farmer's Insurance Group and the Fire Insurance Exchange had a legal duty to protect me...