Staff Jennings, Inc. v. Fireman's Fund Insurance Company, Civ. No. 61-96.

• Decision Date: 12 September 1962
• Docket Number: Civ. No. 61-96.
• Citation: 218 F. Supp. 112
• Parties: STAFF JENNINGS, INC., Plaintiff, v. The FIREMAN'S FUND INSURANCE COMPANY, Defendant.
• Court: U.S. District Court — District of Oregon

218 F. Supp. 112

STAFF JENNINGS, INC., Plaintiff, v. The FIREMAN'S FUND INSURANCE COMPANY, Defendant.

Civ. No. 61-96.

United States District Court D. Oregon.

September 12, 1962.

John Gordon Gearin, Koerner, Young, McColloch & Dezendorf, Portland, Or., for plaintiff.

Nathan J. Heath, Gray, Fredrickson & Heath, Portland, Or., for defendant.

EAST, District Judge.

I find from the evidence that the ChrisCraft involved was destroyed as a result of an engine fuel explosion and fire originating in the vicinity of the port engine. Further, that the cause of the ignition of the explosion-fire is unknown; however, was one of the risks insured against by the defendant.

I am further convinced from the evidence that immediately prior to the explosion the craft was operating and under way normally and was in all respects seaworthy.

There is no evidence that the craft's engine or connecting fuel lines, immediately prior to the explosion, were not of merchantable quality, operating and functioning properly, and reasonably fit for use as a pleasure boat.

Furthermore, it appears from the record that the defendant has failed to plead (and necessarily prove) the prerequisite giving of reasonable notice of a claimed breach of warranty, as required by the Oregon Sales Act, ORS 75.010 et seq. See Owen v. Sears, Roebuck & Company, 273 F.2d 140 (9th Cir., 1959); Spada v. Stauffer Chemical Co., 195 F.Supp. 819 (D.Or.1961).

I am of the opinion that the plaintiff, as a loss payee, stands as an appointee to receive a portion of the proceeds of the insurance by consent of the insured, and as such holds a chose in action against insurer to the extent of the loss payee's interest in the property covered by the risks insured against, limited, of course, to the assured's rights under the terms and conditions of the policy. ORS 736.325 provides, inter alia:

"If settlement is not made within six months from the date proof of loss is filed with an insurance company * * * and an * * * action is brought * * * upon any policy of insurance of any kind or nature, * * * and the plaintiff's recovery exceeds the amount of any tender made by the defendant * * then the plaintiff * * * shall recover * * * such sum as * * * to be reasonable as attorney's fees."

It appears from the facts herein that the defendant refused the plaintiff's request for proof of loss forms and that no tender has been made by the defendant. The defendant makes no issue of plaintiff's failure to file requisite proof of loss and that prerequisite is deemed by the Court to have been waived by the defendant.

"The defendant company complains of the imposition of * * * attorney fees upon the theory that (statute) imposes * * * attorneys fees in favor of the insured, and not in favor of a mortgage creditor.

"The answer is that the defendant company agreed to substitute the plaintiff as payee of all loss or damage accruing under the policy as the plaintiff's interest may appear. Hence, all of the rights which the insured would have been entitled to, with respect to the * * * attorney fees, ran with the policy in

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