Court Opinion

ID: 5155668
Source: CourtListenerOpinion
Date Created: 2022-01-02 02:17:47.070903+00
Date Added: 2024-06-11T13:54:35.735487
License: Public Domain

Pacific Insurance Company insured a crane being used by H S Earthmovers, a joint venturer. The crane was extensively damaged under circumstances coming under the coverage of the insurance policy. Pacific thus had the obligation to pay the reasonable cost of repairs to the crane, less the $5,000.00 deductible specified in the policy. There can be no dispute that repair costs include a reasonable sum for indirect expenses.1 The trial court found that, with minor exceptions, the twenty-two per cent profit and overhead charges were reasonable. The insurance company, however, seeks to avoid paying the amount required under its contract of insurance by relying on the technicality that Earthmovers of Fairbanks, Inc., performed the repairs as a separate entity, rather than on behalf of the joint venture in which it was a participant. The court found that James Thurman, president of Earthmovers of Fairbanks, Inc. (hereinafter Earthmovers), was also authorized to act on behalf of the joint venture.
It is clear that there was an oral contract for repair. The only question is whether the contract was between Pacific and the joint venture2 or Pacific and Earthmovers. The majority finds no error in the trial court's finding that the contract was not between Pacific and Earthmovers.
In my opinion, the record shows that the contract was between Pacific and Earthmovers. The insurance company was aware of the repairs and its agents came to Earthmovers' office, where the repairs were made, to check on the crane. Earthmovers' office was located four and one-half miles from the joint venture's office. All correspondence was on Earthmovers' letterhead stationery. Telephone calls from Pacific were answered at Earthmovers' office. No complaint was made about the repairs, and, in fact, the bill submitted by Earthmovers was paid by Pacific except for the disputed items. I would hold that the court's finding that the contract was not between Earthmovers and Pacific is clearly erroneous.
I also believe, however, that it is immaterial whether the contract was with Earthmovers or with the joint venture. Assuming, as the trial court found, that Pacific believed it was dealing with the joint venture, Pacific would still be liable for the repairs. The only real argument was whether the insured, repairing damaged property, is entitled to a reasonable sum for profit and overhead. The realities of the situation were that the crane had to be repaired. Unless the insurance company objects to the insured performing the repairs, I see no reason why the insured should not be reimbursed in the same manner as anyone else *Page 785 
making the repairs.3 Here, Pacific was well aware that the repairs were being performed and that Thurman was in charge. Whether it thought that the joint venture, its insured, or one of the joint venturers was completing the repairs could make absolutely no difference.
After the trial court found that Pacific believed it was dealing with the joint venture, a motion to amend the complaint to conform to the proof, substituting the joint venture as the plaintiff, was filed. Pacific contended, however, that it would have defenses under the policy. The alleged defenses appear to me to be patently frivolous. Pacific raised two affirmative defenses in its answer to the complaint, made when it allegedly believed that the joint venture was suing as the insured. The first affirmative defense states:
 Plaintiff has failed to file suit under this insurance contract within one year of the occurrence [sic] as is required by General Condition 11 of the policy and is therefore precluded from recovery by waiver and/or estoppel.
Pacific's defense is predicated upon the assumption that the date of the occurrence which gave rise to the claim was the date of the accident. In Fireman's Fund Insurance Company v. SandLake Lounge, Inc., 514 P.2d 223, 227 (Alaska 1973), we interpreted a similar contractual limitation, requiring the suit to be filed within twelve months after "the inception of the loss," to mean that the suit must be filed within twelve months after "the date on which the insurance company denies coverage." I would apply the same interpretation to this policy which requires a suit to be filed within twelve months after "the occurrence which gives rise to the claim."4 Accordingly, the suit, filed four months after Pacific's denial, was timely.
 The second affirmative defense states:
 Plaintiff has never sought to invoke the appraisal-settlement system provided for under paragraph 12 of the subject insurance policy and is therefore precluded from recovery by estoppel and/or waiver.
There was no dispute as to values, but a legal issue as to the right to recover for overhead and profit. Under these circumstances the appraisal provision may not be evoked.5
Moreover, either Pacific believed it was dealing with Earthmovers, rather than the joint venture, in which case a contract was entered into with Earthmovers, or it believed it was contracting with the joint venture. In the latter event, it never raised any policy defenses until long after the repairs were made and it had partially paid the bill. It never contended that an appraisal was required or suggested any settlement procedures. Consequently, an appraisal was not a condition precedent to recovery under the provisions of paragraph *Page 786 
12 of the policy.6See Norwich Union Fire Insurance Society v. Rayor,70 Colo. 290, 201 P. 50, 51 (1921); Phoenix Indemnity Co. v. Zinn,177 Kan. 689, 281 P.2d 1065, 1069 (1955); School District No. 1 v.Globe Republic Insurance Co., 146 Mont. 208, 404 P.2d 889, 892
(Mont. 1965); Couch, supra note 4, § 50:67 at 385. Even if it were a condition precedent, the right was waived. See HomeIndemnity Co. v. Bush, 20 Ariz. App. 355, 513 P.2d 145 (1973);Hanby v. Maryland Casualty Co., 265 A.2d 28 (Del. 1970); Davisv. Imperial Insurance Co., 16 Wn. 241, 47 P. 439 (1896); Couch, supra note 4, §§ 50:83-86, at 393-94.
Leave to amend should be liberally granted, especially where justice so requires. Estate of Thompson v. Mercedes-Benz, Inc.,514 P.2d 1269, 1271 (Alaska 1973); Alaska R.Civ.P. 15(a) and (b). Under these circumstances, I believe that the trial court abused its discretion in failing to grant the motion to amend.
What we have here is a relatively common situation in Alaska, where the niceties are not always observed when the president of one joint venturer who is authorized to act for the joint venture does not indicate specifically which entity he is representing. Here, in my opinion, it made no difference to the insurance company whether the joint venture or one of the joint venturers made the repairs. There is no dispute between Earthmovers and the joint venture, as indicated by the effort to amend the complaint to show the joint venture as plaintiff. I see no reason why the insurance company should profit at the expense of Earthmovers by not paying its just obligation under the policy. Under the theory advanced by the majority, the insurance company could just as well be absolved from paying any of the $110,000 repair costs by contending that the wrong entity had made the repairs. I cannot subscribe to such a result.
1 See Curt's Trucking Co. v. City of Anchorage,578 P.2d 975, 979 (Alaska 1978).
2 Pacific acknowledged that "the contracts regarding the damaged crane was between an insured and its insurer."
3 In Curt's Trucking Co. v. City of Anchorage,578 P.2d 975, 979 (Alaska 1978), we held that a party making its own repairs may recover overhead expenses. Although the case did not specifically concern the recovery of profit, I believe its rationale can be extended to allow such a plaintiff to recover profits since any other repairer would include profits in its bill. See Bultema Dock Dredge Co. v. Steamship David P.Thompson, 252 F. Supp. 881, 885-86 (W.D.Mich. 1966). But seeCrain Bros., Inc. v. Duquesne Slag Products Co., 273 F.2d 948,952-53 (3d Cir. 1959); Sewell v. Newton, 152 So. 389, 393
(La.App. 1934). In any event, the joint venture is clearly entitled to recover its overhead expenses.
4 Paragraph 11 of the policy provides:
 Suit. No suit, action or proceeding for the recovery of any claim under this policy shall be sustainable in any court of law or equity unless the same be commenced within twelve (12) months next after discovery by the Insured of the occurrence which gives rise to the claim, provided however, that if by the laws of the State within which this policy is issued such limitation is invalid, then any such claims shall be void unless such action, suit or proceeding be commenced within the shortest limit of time permitted by the laws of such State.
5 "[A]n appraisal provision provides a method for establishing the dollar value of damage sustained." Keesling v.Western Fire Ins. Co., 10 Wn. App. 841, 520 P.2d 622, 625
(1974). However, "[t]here is no case for arbitration where the insurer disputes its liability, but does not dispute the amount of the losses." Couch, supra note 4, § 50:58 at 380; CharlesTaylor Marine, Inc. v. State Farm Fire Cas. Co.,234 So.2d 400, 402 (Fla.App. 1970).
6 Provision 12 provides in part:
 Appraisal. If the Insured and the Company fail to agree as to the amount of loss, each shall, on the written demand of either, made within sixty (60) days after receipt of proof of loss by the Company, select a competent and disinterested appraiser, and the appraisal shall be made at a reasonable time and place.