Sutton v. Fire Ins. Exchange

• Decision Date: 26 April 1973
• Citation: 265 Or. 322,509 P.2d 418
• Parties: Ervin W. SUTTON, Appellant and Cross-Respondent, v. FIRE INSURANCE EXCHANGE, a California corporation authorized to transact business in Oregon, Respondent and Cross-Appellant.
• Court: Oregon Supreme Court

Page 418

509 P.2d 418

265 Or. 322

Ervin W. SUTTON, Appellant and Cross-Respondent, v. FIRE INSURANCE EXCHANGE, a California corporation authorized to transact business in Oregon, Respondent and Cross-Appellant.

Supreme Court of Oregon.

Argued and Submitted Feb. 6, 1973.

Decided April 26, 1973.

Gary D. Rossi, Coos Bay, argued the cause for appellant. With him on the briefs were McInturff, Thom, Collver & Rossi, Coos Bay.

Paul D. Clayton, Eugene, argued the cause for respondent. With him on the brief were Luvaas, Cobb, Richards & Frazer, Eugene.

Before O'CONNELL, C.J., and McALLISTER, DENECKE, TONGUE, HOWELL and BRYSON, JJ.

DENECKE, Justice.

Plaintiff brought this action to recover for a burglary loss allegedly covered by a policy issued by the defendant insurer to the plaintiff. The insurer in its answer tendered $2,307.50 in full satisfaction and deposited such sum with the clerk. The jury returned a verdict for plaintiff for $3,037. However, the trial court set the verdict aside and entered judgment for the insurer on the ground that there was no evidence that plaintiff had filed a proof of loss. Plaintiff appeals.

The plaintiff suffered burglary losses on April 8 and April 15. He reported each loss to the insurer the day after it occurred. Lists of the property stolen, which may or may not have been signed, were furnished by plaintiff to the insurance agent. At the request of the insurer's adjuster plaintiff dictated to the adjuster a list of items taken, their estimated value, the circumstances of the losses and details relating to the value of an antique 'Kentucky rifle.' The adjuster compiled as much of this material as he desired into a form. The plaintiff was not asked to and did not sign the form.

By July plaintiff and the adjuster had agreed upon the value of all the items stolen except the rifle. They continued to disagree on the rifle and plaintiff filed the complaint in this litigation in December 1971.

The policy required the filing of a proof of loss. ¹ The policy also contained a provision that no action on the policy could be sustained 'unless all the requirements of this policy shall have been complied with * * *.' ²

Plaintiff contends that he substantially complied with the proof of loss requirement and that is sufficient. The trial court instructed the jury that plaintiff could recover if he substantially complied with the proof of loss requirement. In granting the motion for judgment notwithstanding the verdict, however, the trial court wrote that it was of the opinion that there was insufficient evidence of substantial compliance to make a jury issue.

Substantial, as distinguished from strict, compliance of the proof of loss requirement is all that is required. 14 Couch, Cyclopedia of Insurance Law (2d ed) § 49:390; 3 Richards, Insurance § 547 (5th ed 1952); Vance, Insurance, 897--898 (3d ed 1951).

The test of whether the insured substantially complied with the proof of loss requirement should be whether the proof submitted by the insured fulfilled the purpose of the proof of loss:

'The purpose of a provision for proof of loss is to afford the insurer an adequate opportunity for investigation, to prevent fraud and imposition upon it, and to enable it to form a intelligent estimate of its rights and liabilities before it is obliged to pay. Its object is to furnish the insurer with the particulars of the loss and all data necessary to determine its liability and the amount thereof.' 14 Couch, supra, § 49:373, p. 15.

Proof of loss is distinguishable from 'notice of loss' which is also required by the policy. The sole purpose of notice of loss is 'to enable the insurer to take proper action to protect its interests.' 5A Appleman Insurance Law and Practice § 3481, 428 (Rev 1970). ³

In the present case the insured furnished all that the policy required except that the insured did not affix his signature under oath to the information furnished. With such evidence the jury could find that the insured substantially complied.

The following two decisions illustrate what has been held to be substantial compliance. In Truck Insurance Exchange v. Hale, 95 Ariz. 76, 83, 386 P.2d 846, 850 (1963), the court held the following evidence amounted to substantial compliance with the proof of loss requirement:

'A few days after the fire an adjuster for the company interrogated the plaintiff as to the fire and tape recorded the conversation. Within the sixty day...