Oregon Orchards, Inc. v. Insurance Co. of North America
| Decision Date | 03 December 1964 |
| Citation | 397 P.2d 75,239 Or. 192 |
| Parties | OREGON ORCHARDS, INC., an Oregon corporation, Respondent, v. INSURANCE COMPANY OF NORTH AMERICA, a corporation, Appellant. |
| Court | Oregon Supreme Court |
E. R. Bashaw, Medford, argued the cause for appellant. With him on the briefs were Jones & Reeder, Medford.
William V. Deatherage and Philip B. Lowry, Medford, argued the cause for respondent. On the brief were Frohnmayer, Lowry & Deatherage, Medford.
Before McALLISTER, C. J., and ROSSMAN, SLOAN and GOODWIN, JJ.
This was an action to recover on a hail insurance policy. Defendant admitted that hail damage had occurred to plaintiff's pear crop but denied plaintiff's proof of loss as to the amount of the damage. Plaintiff was awarded a verdict and judgment. Defendant appeals.
There are 30 assignments of error. Most of them, however, are based upon the single contention that plaintiff did not use the correct basis to determine its loss. The other assignments will be mentioned later.
The policy in question was one designated as a 'value' policy. The policy itself disclosed the value of the insured crop. The conditions of this form of policy provide that when hail damage occurs the dollar value of the loss is determined by a formula that fixes a percentage of loss to the predetermined value. The policy also provided that the loss shall be determined at the maturity of the crop by the examination of representative samples. The loss formula is applied to the representative sampling and the percentage of loss then applied to the entire crop. The loss was to be determined by the reduction in the grade of the pears. The policy provided that the grades would be '* * * the grades published by the Horticultural Department of the State * * *.' In Oregon, the State Department of Agriculture establishes the grades which are: extra fancy, fancy and cull.
In this case the hail storm occurred in May 1960, when the fruit was still quite small. At the time of maturity defendant sent adjusters to examine the crop and to attempt to determine the amount of the loss. Plaintiff was dissatisfied with the basis used by the adjusters and with the dollar value of the loss determined by them. Plaintiff then obtained the services of four men who, if their testimony is to be believed, were well qualified to judge the cause and amount of damage. Defendant admitted that its first adjustment was wrong and later caused a second team of adjusters to make an additional appraisal of the damage. They found the damage to amount to $1,110 and no more. Plaintiff's appraisers arrived at a loss of $20,758.
Defendant contends that plaintiff's appraisers did not properly interpret and follow the regulations of the Department of Agriculture, and that plaintiff's evidence of loss should not have been admitted into evidence. Because of the limited legal questions involved in this case, we will not expand this opinion to the length necessary to detail the conflicting contentions as to the interpretation of the regulations.
It is sufficient to mention that pears suffer in loss of grade by an affliction designated as russeting. Russeting appears to be a natural occurrence to some species of pears and is otherwise caused by hail, insects, some chemical sprays and other causes. The regulations provide certain specifications for determining grading differentials by russeting alone, regardless of cause. Defendant contended that any russeting found on the pears should have been graded as russeting damage only, without regard to whether the russeting was caused by hail or some other cause. Other specifications provide for damage caused directly by hail. However, plaintiff's evidence, if believed, would prove that russeting caused by hail is readily distinguishable from russeting created by other causes and that the hail russeting directly affects the grade of the pears. Plaintiff, when asked to describe the hail damage he relied on, testified:
The Department of Agriculture regulations required an exercise of judgment upon the part of the grader when he arrives at the grade level of the pears. For example, the regulations define Extra Fancy summer pears in this general language:
'(1) Extra Fancy shall consist of pears of one variety which are hand- picked, mature, clean, well formed, sound, free from damage caused by bruises, limbrubs, sprayburn, sunscald, hail marks, drought spots, russeting, broken skin, codling moth injury, hard and other damage caused by disease, insects, mechanical or other means, except that slight blemishes and russeting charactertistic of the variety shall be permitted.'
The regulations define 'Free from damage' as:
'(5) 'Free from damage' means that the pear shall not be injured to an extent apparent in the process of proper grading and handling, and from damage caused by black discolorations or any damage that arrests the growth of the pear.'
The lack of any exact specifications for grading required a discretion in the graders. The real test of the correctness of the grade, of...
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...to those matters which would be competent evidence in the trial of the cause. 3 However, we stated in Oregon Orchards v. Ins. Co. of N.A., 239 Or. 192, 397 P.2d 75 (1964), that trial courts should be liberal in ruling on motions for the inspection of nonprivileged documents. In Richardson-M......
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