Court Opinion

ID: 6663840
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:04:41.836424+00
Date Added: 2024-06-11T16:00:16.254576
License: Public Domain

Sievers, Chief Judge, dissenting.
With all due respect, I cannot join the opinion of my colleagues which finds that the trial court erred in failing to impose the burden of proof with respect to the record warranty clause on West American. The majority relies upon Connecticut Fire Ins. Co. v. Jeary, 60 Neb. 338, 83 N.W. 78 (1900). In that case, the policy of insurance covering a stock of merchandise which was destroyed by fire provided that the insured take inventory of the stock at least once a year, keep books of account correctly detailing the purchase and sale of such stock, and keep all inventories and books securely locked in a fireproof safe or other place secure from fire. The policy expressly provided: “ ‘Failure to observe the above conditions shall work a forfeiture of all claims under this policy.’ ” Id. at 339, 83 N.W. at 78.
The fire in Jeary occurred within less than a year of the policy’s inception, so no inventory had been taken, and although books of accounts were kept, they were not preserved as required and were destroyed in the same fire which burned the stock of goods. One cannot tell from the opinion whether a jury trial was involved, but clearly the case was not decided on the basis of jury instructions. Instead, the court defines the question as what actions of the insured will work a forfeiture of the policy. The court recites that the books of account were kept as required in the warranty; however, they were not preserved, and thus, it became a matter of whether the failure to comply with this one condition would work a forfeiture of coverage. The court found that from the language of the policy, it was not the intention of the parties that the policy be forfeited “by the mere failure to comply with one only of the conditions of the warranty” and held that there must have been a failure of all of *843the conditions. Id. at 345, 83 N. W. at 80.
I can find no holding in Jeary concerning who has the burden of proof. The court does quote an Iowa Supreme Court decision for the proposition that “ ‘the burden is upon him who claims a forfeiture to clearly show that he is entitled to it [the forfeiture].’ ” 60 Neb. at 346, 83 N.W. at 80. However, I do not take this as a holding of the case. Additionally, the case before us involves at its most fundamental level the question of whether the insured has the burden of proving its alleged loss, which I see differently than a forfeiture of coverage. The Nebraska Supreme Court in Jeary affirmed the trial court’s conclusion and held that there was no ground for forfeiture, as the insured had not failed to comply with all of the requirements of the recordkeeping clause.
I do not read Jeary as authority for the majority’s proposition that the trial court erred when it instructed the jury that Coppi carried the burden of proving that he had complied with the policy requirement that he “ ‘keep records of all of the insured property in such manner that the company can accurately determine therefrom the amount of the loss.’ ”
I would hold that in the factual situation before us, compliance with the policy requirement for recordkeeping is a condition precedent to Coppi’s recovery, and therefore, the burden of proof to show compliance with that policy requirement is upon Coppi. I say this in light of a factual record which establishes strong support for the conclusion that Coppi handled the cash generated at The Factory Beauty Salon in Omaha, Nebraska, in such a manner as to ensure that those who might have a legitimate interest in knowing about such cash, such as West American, would be left to guesswork. For example, 2 days after the burglary, Coppi destroyed the weekly cash ledger which purportedly detailed the cash taken in by The Factory Beauty Salon for the previous week and which would detail at least part of the cash allegedly kept in the safe.
The Nebraska Supreme Court in O’Brien v. Fricke, 148 Neb. 369, 375, 27 N.W.2d 403, 407 (1947), defined condition precedent as “ ‘ “a condition which must be performed before the agreement of the parties shall become a binding contract, or it may be a condition which must be fulfilled before the duty to *844perform an existing contract arises.” ...’ ” That definition was followed in Schmidt v. J. C. Robinson Seed Co., 220 Neb. 344, 370 N.W.2d 103 (1985), which involved a suit by a grower of hybrid seed corn against the seed company because the seed company had released the grower’s acres because they had become infested with “shattercane,” making it allegedly impractical to perform the necessary detasseling in order to produce hybrid seed corn. On appeal, the seed company contended that the trial court had improperly placed the burden of proving a breach of the contract on the seed company. In its discussion, the Supreme Court observed that both parties agreed that the burden of proving conditions precedent in the contract was upon the grower, pursuant to Neb. Rev. Stat. § 25-836 (Reissue 1989). That statute provides: “In pleading the performance of conditions precedent in a contract, it shall be sufficient to state that the party duly performed all the conditions on his part; and if such allegation be controverted, the party pleading must establish on the trial the facts showing such performance.”
In Robinson Outdoor Advertising Co. v. Wendelin Baking Co., 145 Neb. 112, 15 N.W.2d 388 (1944), the court relied upon the predecessor statute to § 25-836 and held that when the pleading of the performance of a condition precedent in a contract is controverted, the party pleading the performance of such condition precedent is required to establish the facts showing such performance. In the case at hand, Coppi’s amended petition, upon which the case went to trial, alleged that he had fulfilled all conditions precedent. West American denied this allegation and put Coppi upon strict proof. Thus, I conclude the burden of proof belongs on Coppi.
The requirement that Coppi keep records of the cash in such a manner that West American can accurately determine the amount of the loss from those records is, in my judgment, clearly a condition precedent. A policy of insurance which covers the cash contained within a safe is obviously a situation which lends itself to the potential for fabricated or exaggerated claims, absent appropriate business records to establish and verify the cash contents of the safe. The businessperson who is dealing in cash, such as Coppi apparently was, is the party in the *845best position to establish a recordkeeping system, as well as the maintenance thereof. Such records are fundamental to believable evidence of a cash loss. To impose the burden of proving the existence of such records, kept in “ ‘such manner that the company can accurately determine therefrom the amount of the loss,’ ” upon the operator of the business that owns the cash seems quite logical.
. I find it just and equitable to impose the burden of proof upon Coppi, the one in the best position to know, and to adduce evidence. Finding no error, I would affirm.