Roberts v. Federal Crop Insurance Corporation

• Decision Date: 30 January 1958
• Docket Number: No. 1435.,1435.
• Citation: 158 F. Supp. 688
• Court: U.S. District Court — District of Washington
• Parties: Harold ROBERTS, Ralph McLean, Robert Jessup, Geo. A. Murison, Andrew G. Nilles, H. E. McDonald, W. H. McDonald, M. E. Scheibner, Theodore B. Rice, Loren W. Pendell, J. E. Thoren, E. O. McLean, E. G. Branscom, S. A. Buckingham, R. E. Buckingham, Davis Bros., David G. Davis, T. R. Davis, Frank Miller, Lloyd McLean, Claude Miller, Miller Bros., E. E. Smith, Clyde W. Miller, Russell H. Hunt, Edwin Miller, Clarence Davis, Teressa M. Davis, Eugene Frederick, J. W. Buob & Sons, John A. Danielson, W. J. Hawes, Geo. Jordan & Sons, Dale Leander, Lucile E. Besel, Carl H. Viebrock, Orval Supplee, Clarence R. Edgemon, E. V. Vaughn, Charles D. Olin, James Edgemon, Clarence Adams, David Adams, W. H. Asmussen, John Carlock, Eugene Cavadini, Johnie Cavadini, Richard Daling, T. R. Hedges, Sam Iversen, F. P. Jenkin, Gene Jenkin, Carl H. Kummer, Malone & Son, H. J. Matthiesen, Matthiesen Bros., Harold Peterson, Howard Roberts, Eugene Roberts, Hollis Rommel, Gene Weimerskirch, E. A. Wesselman, Pete Williams, Emerson E. Woods, Rice Brothers, Branscom & Son, and Einer Petersen, Plaintiffs, v. The FEDERAL CROP INSURANCE CORPORATION, an agency of the United States, Defendant.

158 F. Supp. 688

Harold ROBERTS, Ralph McLean, Robert Jessup, Geo. A. Murison, Andrew G. Nilles, H. E. McDonald, W. H. McDonald, M. E. Scheibner, Theodore B. Rice, Loren W. Pendell, J. E. Thoren, E. O. McLean, E. G. Branscom, S. A. Buckingham, R. E. Buckingham, Davis Bros., David G. Davis, T. R. Davis, Frank Miller, Lloyd McLean, Claude Miller, Miller Bros., E. E. Smith, Clyde W. Miller, Russell H. Hunt, Edwin Miller, Clarence Davis, Teressa M. Davis, Eugene Frederick, J. W. Buob & Sons, John A. Danielson, W. J. Hawes, Geo. Jordan & Sons, Dale Leander, Lucile E. Besel, Carl H. Viebrock, Orval Supplee, Clarence R. Edgemon, E. V. Vaughn, Charles D. Olin, James Edgemon, Clarence Adams, David Adams, W. H. Asmussen, John Carlock, Eugene Cavadini, Johnie Cavadini, Richard Daling, T. R. Hedges, Sam Iversen, F. P. Jenkin, Gene Jenkin, Carl H. Kummer, Malone & Son, H. J. Matthiesen, Matthiesen Bros., Harold Peterson, Howard Roberts, Eugene Roberts, Hollis Rommel, Gene Weimerskirch, E. A. Wesselman, Pete Williams, Emerson E. Woods, Rice Brothers, Branscom & Son, and Einer Petersen, Plaintiffs, v. The FEDERAL CROP INSURANCE CORPORATION, an agency of the United States, Defendant.

No. 1435.

United States District Court E. D. Washington, N. D.

January 30, 1958.

Kimball & Clark, Waterville, Wash., for plaintiffs.

William B. Bantz, U. S. Atty., Robert L. Fraser, Asst. U. S. Atty., Spokane, Wash., for defendant.

DRIVER, Chief Judge.

Defendant has moved for summary judgment. The motion is supported by affidavits, and plaintiffs have filed answering affidavits. The motion must be denied unless it clearly appears that without any factual controversy defendant is entitled to judgment as a matter of law.¹ For the purpose of passing upon the motion, wherever there is any difference or dispute as to the facts, I shall take the plaintiffs' version as the true and correct one.

Plaintiffs' claims are set forth in their amended complaint. Its pertinent allegations may be summarized as follows:

All of the plaintiffs are farmers who seeded wheat crops in Douglas County, Washington in the late summer of 1955. Such crops were insured against certain designated hazards, including winter-kill, by insurance policies issued by defendant. The policies each contained the following provisions:

"8. Insurance period. Insurance with respect to any insured acreage shall attach at the time the wheat is seeded * * *."

"16. Time of loss. Any loss shall be deemed to have occurred at the end of the insurance period, unless the entire wheat crop on the insurance unit was destroyed earlier, in which event the loss shall be deemed to have occurred on the date of such damage as determined by the Corporation."

"6. Coverage per acre. The coverage per acre established for the area in which the insured acreage is located shall be shown by practice(s) on the county actuarial table on file in the county office. The coverage per acre is progressive depending upon whether the acreage is (a) First Stage—released and seeded to a substitute crop, (b) Second Stage —not harvested and not seeded to a substitute crop, or (c) Third Stage —harvested."

In the Spring of 1956, when the snow melted off the land, it became apparent that plaintiffs' wheat crops were "a total loss." Thereafter, on April 9, 1956, at a meeting at St. Andrews, Washington, the plaintiffs "received information from one Creighton Lawson, Washington State Director of the defendant Corporation * * *" that no claims would be paid for the loss if the plaintiffs made such claims under the policies.

As a result "of the repudiation of the contract by the defendant, plaintiffs, in order to mitigate their damage, were forced to reseed the acreage on which the winter wheat crop had been lost at a cost of $6.50 per acre" on approximately 40,000 acres.

The amended complaint also contains the following paragraph:

"That, depending on the yield of the 1956 crop as reseeded, the above mentioned repudiation of the contract by defendant may result in further damage to the plaintiffs in an amount equal to the difference between the actual amount harvested and the insured amount of wheat and that in order to perfectly protect the plaintiffs the Court should direct that the insurance be reinstated."

The plaintiffs pray for judgment for the expense of reseeding at $6.50 per acre for reinstatement of the insurance, and for other relief.

The paragraph XI quoted above, is identical to paragraph X of the original complaint verified on June 15, 1956, before the wheat crops could have been harvested. The amended complaint was filed September 23, 1957, more than a year after the 1956 harvest time. As will appear later herein, the defendant Corporation has consistently maintained that the insurance carried over and attached to the reseeded crops of the plaintiffs. It would seem, therefore, that there was no loss or damage to the reseeded wheat covered by the insurance policies, or plaintiffs would have specifically claimed the same when they filed their amended complaint in September, 1957.

The defendant is "an agency of and within the Department of Agriculture * * *" of the United States.² The form of crop insurance policy is prescribed in a federal regulation which has the force and effect of a statute. It was published in the Federal Register of September 21, 1951 (Vol. 16, Number 184, p. 9628 et seq.). In support of its motion, defendant calls attention to the following provisions:

"4. Insured acreage. The insured acreage with respect to each insurance unit shall be the acreage of wheat seeded for harvest as grain as reported by the insured or as determined by the Corporation, whichever the Corporation shall elect, except that insurance shall not attach with respect to (a) any acreage seeded to wheat which is destroyed (as defined in section 15) and on which it is practical to reseed to wheat, as determined by the Corporation, and such acreage is not reseeded to wheat * * *."

"14. Notice of loss or damage. (a) If any damage occurs to the insured crop during the growing season and a loss under the contract is probable, notice in writing (unless otherwise provided by the Corporation) shall be given the Corporation at the county office promptly after such damage.

"(b) If a loss under the contract is sustained, notice in writing (unless otherwise provided by the Corporation) shall be given the Corporation at the county office within 15 days after threshing is completed or by October 31, whichever is earlier."

"17. Proof of loss. If a loss is claimed, the insured shall submit to the Corporation, on a Corporation form entitled `Statement in Proof of Loss', such information regarding the manner and extent of the loss as may be required by the Corporation. The statement in proof of loss shall be submitted not later than sixty days after the time of loss, unless the time for submitting the claim is extended in writing by the Corporation. It shall be a condition precedent to any liability under the contract that the insured establish the production of wheat on the insurance unit, the amount of any loss for which claim is made, and that such loss has been directly caused by one or more of the hazards insured against by the contract during the insurance period for the crop year for which the loss is claimed, and that the insured further establish that the loss has not arisen from or been caused by either directly or indirectly, any of the causes of loss not insured against by the contract * * *."

"28. Modification of contract. No notice to any representative of the Corporation or the knowledge possessed by any such representative or by any other person shall be held to effect a waiver of or change in any part of the contract, or to estop the Corporation from asserting any right or power under such contract, nor shall the terms of such contract be waived or changed except as authorized in writing by a duly authorized officer or representative of the Corporation; * * *."

The affidavit of Mr. Creighton F. Lawson, to which is attached a sample form of the Wheat Crop Insurance Policy, recites that affiant has personally examined all the files and records of the defendant Corporation and that none of the plaintiffs has furnished a proof of loss to defendant as required by the policies. The same affidavit further states that plaintiff Ralph McLean on April 2, 1956, and plaintiff Lloyd McLean on April 13, 1956, gave notice to defendant of probable loss of winter wheat.

There is no allegation or factual showing of any kind on the part of the plaintiffs that any of them ever furnished either a notice of damage or loss, or proof of loss, with the exception of the two McLeans.

An affidavit filed herein by plaintiff Lloyd McLean states that "he presented a claim for loss of the 1956 crop by winter kill: that the said claim was rejected by Creighton Lawson by letter; * * *." (Emphasis supplied.)

There is also in the file an affidavit of Mr. C. M. Clark, an attorney at law, who attended the April 9, 1956 St. Andrews meeting on behalf of the wheat growers. The affidavit recites that Mr. Lawson said at the meeting that he was authorized "to speak for" the defendant Corporation; that he was in agreement with other representatives of the corporation then present that the loss was not covered by the policies; and that "if claims were filed at that time" they would be denied. Mr. Clark then advised the farmers to "reseed their lost acreage in order to mitigate their damage in view of the repudiation of the contract by Mr. Lawson." The farmers followed his advice and did reseed the lost acreage.

Attached to Mr. Clark's affidavit as exhibits E and F are documents designated in the affidavit respectively as "rejection of the claim presented by Ralph McLean", and "rejection of the claim presented by Lloyd McLean." Exhibit E is a copy of a letter on the Spokane office letterhead of defendant. It is dated April 12, 1956, is directed to Ralph...