Opinion ID: 391025
Heading Depth: 1
Heading Rank: 4

Heading: REPLACEMENT v. REPAIR

Text: 27 Tidewater claims that the trial judge also erred in deciding that Reliance was not liable for the full cost of replacing the slewing gear, but only liable for the estimated amount of the repair of the broken tooth. 28 Both sides presented expert testimony to support their positions. Tidewater's expert, Raymond Melvin, was the director of Central Technical Services for the Harnischfeger Corporation, the manufacturer of the crane. He testified that repair of the slewing gear in question was within his responsibility as Chief Gear Engineer. In his job he has had to decide whether to replace or repair 13 slewing gears and in only one instance was a gear tooth repaired. 29 When contacted about the slewing gear involved in the present case his conclusion was that it had to be replaced, based, however, only on a description of the accident and the damage and not on a personal inspection. While admitting that he was aware of certain tests which could be performed to determine the extent of the damage, none was conducted. He also testified that he was unaware of what procedure could be used for repairing a broken tooth, but assumed any such procedure would be heat related and that use of heat would weaken the metal. 30 Reliance's expert, George Jackman, was the president of Metal Locking Services, Inc., which is in the business of repairing, among other things, gear teeth although usually on smaller equipment. He testified that through a process known as metal locking, which uses no heat, the gear could be repaired and the finished product would be as hard as the parent metal. As opposed to Melvin, Jackman personally inspected the broken tooth and estimated the cost of repair at $5,000. 31 When presented with this conflicting expert testimony, the judge, as trier of fact, had to make a choice of which was the most convincing. After reviewing the testimony the judge was convinced by Jackman since Melvin had assumed repair would require heat treatment while Jackman testified that his company could repair the ring without the use of heat. Furthermore, the judge appears to have been influenced by the fact that Jackman had personally inspected the damaged equipment while Melvin had not. 32 Tidewater urges this court to reverse the judgment of the trial court on the grounds that the judge was incorrect in crediting Jackman's testimony over Melvin's. Much of its brief is taken up with a recitation of the qualifications of the two experts, concluding that Melvin's credentials and Jackman's deficiencies compelled the court to completely discount Jackman's testimony. 33 We disagree. It is the function of the trial judge when sitting without a jury to make findings of fact which should not be set aside unless clearly erroneous. Rule 52(a), Fed.R.Civ.P. It cannot be gainsaid that given the conflicting expert testimony in the present case, the trier of fact was forced to make a decision. Tidewater is in effect asking this court for a de novo determination, which is not the function of this court. 34 The authority of the appellate court, when reviewing the findings of a judge as well as those of a jury, is circumscribed by the deference it must give to decisions of the trier of fact, who is usually in a superior position to appraise and weigh the evidence. The question for the appellate court under Rule 52(a) is not whether it would have made the findings the trial court did, but whether on the entire evidence (it) is left with the definite and firm conviction that a mistake has been committed. 35 Zenith Radio Corp. v. Hazeltine Research, Inc., 395 U.S. 100, 89 S.Ct. 1562, 23 L.Ed.2d 129 (1969). See also, Phillips v. Crown Central Petroleum Corp., 556 F.2d 702 (4th Cir. 1977). 36 This court is not left with such a firm conviction. The trial judge personally observed the two witnesses. His written findings of fact and conclusions of law discussed the merits of the two positions, taking into account the personal knowledge of each of the two experts of the pieces of equipment and each's knowledge of possible repair methods. Having done this, the judge chose Jackman's testimony as the most persuasive of the two. Having reviewed the entire record in this case it is our judgment that it would be highly inappropriate for this court to disturb this finding of the trial judge, his finding not being clearly erroneous. 37 This conclusion, however, is not the end of the matter. While the trial judge's finding regarding the weight of the expert testimony is not clearly erroneous, his final conclusion that the defendant is not liable for the full cost of replacement of the slewing gear did not apparently consider all the relevant evidence. 38 Tidewater presented evidence that without full replacement of the slewing gear as opposed to the mere repair of the gear tooth, its insurance carrier, The Hartford Insurance Company, would not insure the crane. In a letter to William Bozman, Ralph E. Brown of R. B. Brown & Associates, Inc., Corporate Insurance Managers, wrote that Hartford was unwilling to further insure this crane from either other physical damage to the crane or third party liability coverage which would result from the use and/or operation of the crane. 39 Only if the crane was repaired so that it met factory specifications would Hartford insure it. B. J. Karas, product service manager for Harnischfeger, wrote in a letter to Charles Enman of Harnischfeger that the company could not warrant a repair of the crane if only the gear tooth was repaired. 40 It is established in most jurisdictions, including Maryland, that when an insurance carrier elects to repair rather than replace an item on which it carries insurance, the company must see that the insured object is put back in substantially the same condition as it was before the loss, and the repairs must make the property as serviceable as it was before the loss. Interstate Ins. Co. v. Logan, 205 Md. 583, 109 A.2d 904, 906 (1954). See also, Couch on Insurance 2d, § 54.30, p. 338 (1966). 41 When an insurer makes an election to repair or rebuild under a repair, restore or rebuild clause in its policy the insurer is then obligated to put the vehicle in substantially the same condition as it was prior to the collision so as to render it as valuable and as serviceable as before. 42 Venable v. Import Volkswagen, 214 Kan. 43, 519 P.2d 667 (1974). 43 For a company which has invested in an apparently expensive crane of the size involved in this case, especially when any accident involving such a crane could conceivably cause serious personal injuries and possible loss of life, insurance is all important. Certainly such a piece of equipment is not as valuable and as serviceable as before if after repair it is uninsurable. We view this as an important element in any determination of whether or not an insurance company has fulfilled its duty when it elects to repair. 44 The trial judge, however, failed to consider this in his findings. Rule 52(a) 2 requires the trial judge to consider in his findings all material issues (so) that the reviewing court may understand clearly the factual basis for the trial court's findings and conclusions. Patrician Towers Owners, Inc. v. Fairchild, 513 F.2d 216, 219 n. 10 (4th Cir. 1975). See also, Kelley v. Everglades Drainage District, 319 U.S. 415, 63 S.Ct. 1141, 87 L.Ed. 1485 (1943). 45 For this reason, we agree with Tidewater that the district court's findings of fact did not meet the standards of Rule 52, since they failed to address evidence which we believe is essential to a proper determination of the case. 46 Therefore, we vacate the judgment for the defendant and remand this case to the district court for further findings on the issue of insurability with leave to the parties to adduce further evidence if they desire to do so.V. CONCLUSION 47 In accordance with this opinion, we affirm the district court in its conclusion that Reliance is not liable for the amount of the deductible, the betterment and miscellaneous figures, but vacate the judgment for Reliance and remand for the purpose of taking evidence regarding Tidewater's ability to insure the crane. 48 AFFIRMED IN PART, VACATED AND REMANDED.