Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-90-04056/USCOURTS-ca10-90-04056-0/pdf.json

Parties Involved:
Unigard Security Insurance Company
Appellee
Allen R. Whittle
Appellant

Document Text:

UNITED STATES COURT OF APPEALS 

TENTH CIRCUIT 

FILED 

United States Court of Appeals 

Tenth Cirruit 

UNIGARD SECURITY INSURANCE COMPANY, ) 

JAN 3 0 1991 

ROBERT L. HOECKER 

Clerk 

v. 

ALLEN 

a/k/a 

) 

Plaintiff-Appellee, ) 

) 

) 

) 

R. WHITTLE, d/b/a MS MARKING, ) 

TAWSCO, ) 

) 

Defendant-Appellant. ) 

ORDER AND JUDGMENT* 

No. 90-4056 

(D.C. No. 89-CV-531) 

(D. Utah) 

Before LOGAN, SEYMOUR, and TACHA, Circuit Judges. 

After examining the briefs and appellate record, this panel 

has determined unanimously that oral argument would not materially 

assist the determination of this appeal. See Fed. R. App. P. 

34(a); 10th .Cir. R. 34.1.9. The case is therefore ordered 

submitted without oral argument. 

This appeal is from an order of the district court entering a 

declaratory judgment following a trial in favor of plaintiff 

Unigard Security Insurance Company. The district court concluded 

plaintiff had paid its policy limits and discharged its entire 

obligation to defendant Allen R. Whittle as a result of fire 

* This order and judgment has no precedential value and shall 

not be cited, or used by any court within the Tenth Circuit, 

except for purposes of establishing the doctrines of the law of 

the case, res judicata, or collateral estoppel. 10th Cir. R. 

36.3. 

Appellate Case: 90-4056 Document: 010110083597 Date Filed: 01/30/1991 Page: 1 
✓ 

damage to his property. Defendant contends the district court's 

findings concerning the cause of the second fire are clearly 

erroneous. Defendant further alleges the trial court failed to 

apply correctly Utah law governing interpretation of insurance 

contracts and the definition of "occurrences." We affirm. 

This case arose out of two fires at the premises of 

defendant's business in Clinton, Utah. The first fire started at 

approximately 4:30 p.m. on December 15, 1987. The second fire 

call was received by the fire department at approximately 2:30 

a.m. the following morning. 

The fire insurance policy issued to defendant by plaintiff 

was a "per occurrence" policy providing full policy coverage for 

each "occurrence" of direct loss by fire. Plaintiff paid 

defendant the full policy limits for one "occurrence." It denied 

coverage for two "occurrences," however, arguing the second fire 

was caused by the first fire and thus was not a separate 

occurrence. 

In its findings of fact, the district court stated the second 

fire was caused by a rekindling of the first fire. An undetected 

hot spot from the initial burning had continued to smolder and 

eventually ignited. We review this finding of fact under the 

clearly erroneous standard. Fed. R. Civ. P. 52(a). Based on our 

review of the record, we cannot conclude this finding was clear 

error. 

The record contains the testimony by Lloyd H. Brown, 

Volunteer Fire Chief for Clinton City, who explained the dangers 

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Appellate Case: 90-4056 Document: 010110083597 Date Filed: 01/30/1991 Page: 2 
I' 

• 

of rekindling of fires. Fire Marshall Robert Sandman testified 

that based on his investigation, he believed the second fire was 

cuased by a rekindling of the first fire. There was further 

testimony from Allan H. Peek, Fire Chief for Layton City, 

regarding the temperatures that developed during the first fire 

and materials used in the walls that suggested rekindling or 

continued burning in the area. Chief Peek concluded there was one 

continuous fire and one ignition source. Although plaintiff's 

expert, Jim Ashby, testified that changes in ambient temperature 

and wind velocity were contributing causes of the second fire, the 

district judge reasonably concluded these conditions were not 

signficant contributing causes of that fire. We cannot say the 

district court was clearly erroneous in its finding that there was 

only one "occurrence" of direct loss by fire. 

Defendant argues further the district court erred in applying 

a proximate cause analysis to determine the number of occurrences 

and thus the extent of plaintiff's liability under the fire 

insurance contract. In this diversity case, we review whether the 

district court properly applied the law of the State of Utah de 

novo. See Weiss Y...!... United States, 787 F.2d 518, 525 (10th Cir. 

1986). We agree with the district court that the Supreme Court of 

Utah would apply a proximate cause analysis in determining the 

definition of an "occurrence" in a fire insurance contract. See 

Jorgenson Y...!... Hartford Fire Ins. Co., 373 P.2d 580, 582 (Utah 

1962) (defining fire insurance contract term "direct loss by fire" 

using proximate cause analysis). We find no other errors in the 

district court's application of Utah law to this insurance 

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Appellate Case: 90-4056 Document: 010110083597 Date Filed: 01/30/1991 Page: 3 
contract and its determination of this case. The order of the 

district court is AFFIRMED. The mandate shall issue forthwith. 

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ENTERED FOR THE COURT 

Deanell Reece Tacha 

Circuit Judge 

Appellate Case: 90-4056 Document: 010110083597 Date Filed: 01/30/1991 Page: 4