Opinion ID: 2639126
Heading Depth: 2
Heading Rank: 3

Heading: Facts Relating to the Contents Claim

Text: Bill Goodner retained R.D. Powers Company, Inc. (R.D.Powers) (a professional salvage and appraisal firm) to assist in verifying Sprinkler's stock inventory for the contents claim. R.D. Powers' representative spent four days working with Dan Weitz to physically inventory the damaged stock. The R.D. Powers representative was not able to physically inventory several sections on the mezzanine level because the merchandise was so badly damaged by fire. The inventory had to be reconstructed from Sprinkler's records. At the time of this inventory, Sprinkler agreed that none of the equipment in the manufacturing area was damaged; and there was no damage to the IRSCO [1] inventory of bolts and fasteners. In August 1997, John Deere did pay $9,357.00 as an extra expense to transfer these and other parts to Sprinkler's Weiser location. On April 29, 1997, Wendy Blevins from Sprinkler informed Bill Goodner that the last physical inventory for Sprinkler was performed on February 28, 1997, and totaled $92,521.18. She also indicated that the last IRSCO physical inventory was performed on March 7, 1997, and totaled $91,243.55. Later in June 1997, Sprinkler forwarded another inventory from its computer records totaling $217,468.63 for Sprinkler Nampa only. Dan Weitz explained the discrepancy in the amounts as the result of Blevins' lack of knowledge about the Nampa operation and incorrect information. Due to the discrepancy, John Deere's accountant, Paul Sutphen, was requested to assist in evaluating the inventory claim. On June 9, 1997, John Deere made a partial payment of $50,000 to Sprinkler, as an advance and partial payment on Sprinkler's contents claim, which was accepted. For the next few months, Sutphen requested information from Sprinkler's accountant, for price testing certain items in the stock inventory. On October 17, 1997, Sutphen and Nye met at the Weiser facility. Nye agreed that the perpetual inventory that had been earlier provided in the approximate amount of $217,000 included both the Sprinkler inventory and the IRSCO inventory. Sprinkler's trial balance and tax records revealed the inventory had consistently been between $90,000 to $95,000. After the fire, Sprinkler transferred $11,632.00 worth of inventory to the Weiser facility. Nye and Sutphen agreed to deduct ten percent to accommodate inventory errors and $1,500 salvage value. The remaining stock value was $71,301.00. In addition, John Deere agreed to add $5,000 for an estimated computer repair and $13,426.02 for the actual cash value for items other than stock. The total contents loss paid to Sprinkler and accepted was $89,727.02. As to all of the claims, on December 2, 1997, Bill Goodner sent a letter to Dan Weitz of Sprinkler in care of his counsel, and to Idaho Farmway, with enclosed worksheets regarding the calculation of losses under the various portions of the policy. Goodner inquired whether there was any additional information John Deere should consider in adjusting the loss and requested such information be forwarded as soon as possible. Although the time period had already expired, John Deere extended the time period for notification of intent to replace the building repair until March 1, 1998. John Deere wrote that if it did not hear anything by March 1, 1998, it would assume that Sprinkler accepted the payment amounts in full and had no further information for John Deere to consider. No further information was ever provided by Sprinkler. Idaho Farmway did not timely notify John Deere of its intent to have the building replaced. All checks were cashed without objection, including the ones written to joint-payees, Sprinkler and Key Bank.