Ramsay v. Cooper, 76-1542

Citation553 F.2d 237
Decision Date30 March 1977
Docket NumberNo. 76-1542,76-1542
PartiesHarold S. RAMSAY, Plaintiff, Appellant, v. Bessie M. COOPER, Defendant, Appellee.
CourtUnited States Courts of Appeals. United States Court of Appeals (1st Circuit)

Russell F. Hilliard, Concord, N. H., with whom Maynard, Dunn & Phillips, Concord, N. H., was on brief, for plaintiff-appellant.

Howard M. Moffett, Concord, N. H., with whom Orr & Reno, Professional Assn., Concord, N. H., was on brief, for defendant-appellee.

Before COFFIN, Chief Judge, ALDRICH and CAMPBELL, Circuit Judges.

LEVIN H. CAMPBELL, Circuit Judge.

The will of Harold Ramsay's father left a life estate in a furnished house and land to Mrs. Bessie M. Cooper, and the remainder to Ramsay. Mrs. Cooper was to "keep said property in reasonably good repair and properly insured against fire loss." 1

The testator died in 1955. Thereafter Mrs. Cooper occupied the property. Initially she insured it against fire only to the extent of $9,000. On January 6, 1970, Harold Ramsay's attorney wrote to Mrs. Cooper that he and his client felt the buildings on the property were underinsured, and were "of the opinion that you should have not less than $25,000 coverage on the house and contents." Mrs. Cooper's attorney promptly replied, enclosing an endorsement to Mrs. Cooper's policy which increased the insurance to $25,000. In 1973, however, Mrs. Cooper unilaterally reduced the insurance to $20,000 without informing Ramsay. 2 The house burned on October 15, 1975 and was rendered uninhabitable. Ramsay commenced this action a month later, requesting payment of the insurance into court and a determination of the respective rights and interests of himself and Mrs. Cooper. Thereafter, the $20,000 in insurance proceeds was paid into an escrow account. By agreement of the parties, the property was sold for $16,200 and that amount was also paid into the escrow account, for a total of $36,200. The parties stipulated that an appraisal, done after the fire, put the value of the property before loss at $48,000.

Ramsay moved for summary judgment, contending that Mrs. Cooper's life estate had terminated as a matter of law. Mrs. Cooper cross moved for summary judgment, denying that her life estate had terminated. She requested division of the $36,200 on the basis of the actuarially computed value of her life interest "less any damages which the court determines may be due the plaintiff."

The district court ruled that Mrs. Cooper's life estate had not terminated. On the issue of damages, it held that Mrs. Cooper was clearly negligent in failing to insure up to $25,000, but that Ramsay was estopped from asserting an insurable value for the building in excess of $25,000, as he had proposed that amount in 1970. On the basis of actuarial computations which are not in dispute the court divided the escrow account, awarding approximately $24,000 to Ramsay and $12,000 to Mrs. Cooper. The court's division included an award of damages to Ramsay taken from Mrs. Cooper's life share amounting to the value of Ramsay's remainder interest in $5,000.

We reject Ramsay's contention that Mrs. Cooper forfeited the life estate for failure to keep the property adequately insured. The district court considered the question carefully and as we agree in substance with its analysis, we need not repeat it. See, in addition to the cases it cites, Borchers v. Taylor, 83 N.H. 564, 569, 145 A. 666 (1929) and Moore v. Moore, 69 N.H. 420, 422, 45 A. 233 (1898). Appellant insists that he cannot now be adequately recompensed for the underinsurance because "(t)he fund amounts to only 3/4 of the value of the building." But if the building had been properly insured and a loss had occurred, appellant would not have then received the whole value of the property. Either the property would have been restored, and the life tenant would have continued in possession of the restored property until her death, or else upon sale, the remainderman would have received, as in the present case, a part of the total proceeds based upon subtracting the actuarially computed value of the life interest. As the court below indicated, the escrow fund, while less than the whole value of the property, is sufficient to pay Ramsay the value of his interest, including damages for the loss of insurance. To pay Ramsay the entire fund would provide him with a windfall to the extent the fund exceeds what he would have received had there been appropriate fire insurance.

There is likewise no merit in the claim that Mrs. Cooper's failure to restore the property after the fire worked a forfeiture because it violated the condition in the will that she "keep said property in reasonably good repair". Her liability to the remainderman in the event of non-wilful fire damage is measured by the fire insurance provision, not by the duty to keep the property in reasonable repair. The property was sold by agreement of both parties shortly after the fire, with no contention by Ramsay then that the property be repaired.

A harder question is whether Ramsay's damages for underinsurance should be limited by the $25,000 figure which his attorney conveyed to Mrs. Cooper in the 1970 letter. 3 The district court ruled that Ramsay was estopped from claiming more. We agree that the life tenant was entitled to rely for a reasonable period on Ramsay's representation as to the minimal adequacy of $25,000. See 5 Page on Wills, § 44.13, at 427. But we do not read Ramsay's attorney's letter as indicating that Ramsay absolved Mrs. Cooper for all time from a duty to go beyond that figure. We take judicial notice that the period from 1970 to 1975 was one of inflation and rising prices. The fire occurred in 1975, by which time, the insurable value of the structures on the Ramsay homestead had apparently increased. 4 We interpret the 1970 letter as calling Mrs. Cooper's attention to her duties as life tenant, one of which was to keep the property properly insured against fire loss. The fact that Ramsay and his lawyer expressed the opinion that she should not have less than $25,000 coverage is not a statement either that $25,000 would remain adequate indefinitely or that she could rely on them to tell her in the future what coverage to maintain. It is not alleged that Mrs. Cooper is incompetent and, regardless of the fact that she was of advanced years, she was obliged under the will to maintain proper insurance.

An estoppel requires that the benefiting party have reasonably relied to her detriment upon the representation of the estopped party. Monadnock Regional School District v. Fitzwilliam, 105 N.H. 487, 491-92, 203 A.2d 46 (1964). We see no reasonable basis for someone to rely on the $25,000 as reflecting the proper coverage five years later. Far from relying on the $25,000, Mrs. Cooper took it upon herself in 1973 to reduce the insurance to $20,000. Her attorney's affidavit 5 indicates that she might have been confused by a newspaper article dealing with a $5,000 reduction in taxable values for elderly persons. However, she did not first speak to Ramsay or his or her attorney, as one might have expected had she still been relying on their 1970 advice concerning $25,000. Estoppel is an equitable doctrine. We are unable to find any conduct on Ramsay's part which makes it inequitable for him to assert the right, conferred by the will, to have the life tenant properly insure the property against loss. A fire...

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