AMERICAN INS. CO. et al.
IACONI et al.
Consolidated actions between the insureds, Guiseppi Iaconi and Antonia Iaconi, and the fire insurers, American Insurance Company and others, wherein the issue presented was the amount of damages recoverable by the insureds under valued fire insurance policies for a partial loss sustained by them. The Superior Court, Terry, J., held that the agreed valuation as set forth in the policy fixed conclusively the value of the property before the loss and that the damages by reason of the loss would be the difference between the agreed valuation and the value of the salvage, and that, of those damages, the insurers would be liable for such an amount as was properly reflected after applying the co-insurance clause of the policies to the agreed valuation.
Order in accordance with opinion.
In action to recover damages under valued fire insurance policy for partial loss sustained by insured, cost of replacement or repair, whichever case might be, would be proper element to be considered, but would be in no manner controlling in arriving at damages sustained. Rules of Superior Court, rule 56; Rev.Code 1935, § 511, as amended by 45 Del.Laws, c. 81.
[46 Del. 214] This case involves the consolidation of Civil Actions 17 and [46
Del. 215] 18, New Castle County, 1949, each action relating to the proper method of computing damages growing out of a fire loss under certain fire insurance policies. In Civil Action 17 the plaintiffs are Guiseppe Iaconi and Antonia Iaconi. The defendants are American Insurance Company, a New Jersey corporation, The Automobile Insurance Company, a Connecticut corporation, The Camden Fire Insurance Association, a New Jersey corporation, The Continental Insurance Company, a New York corporation, and Northern Insurance Company, a New York corporation. In this action the plaintiffs have alleged in substance that on October 28, 1946 each defendant issued to them a policy
of insurance in the amount of $12,000 against damage by fire to a concrete block mushroom house and other buildings located on plaintiffs' property on the southeast side of Valley Road between the Lancaster Pike and the Limestone Road in Mill Creek Hundred, New Castle County; that upon the face of each policy is endorsed an agreed valuation of $15,000; that on or about April 18, 1948 the buildings were damaged by fire to the extent of $18,000. The complaint concludes with a prayer for judgment in the plaintiffs' favor in the amount of $12,000 and against each defendant in the amount of $2,400, with interest from April 18, 1948, together with reasonable counsel fees anc costs of suit.
In Civil Action 18 the insurance companies, appearing as defendants in Civil Action 17, are the plaintiffs. The Iaconis, appearing as plaintiffs in Civil Action 17, are the defendants.
In Civil Action 18 the plaintiffs allege in substance that on October 28, 1946 each company issued a policy of fire insurance to the defendants covering the same subject matter as indicated in Civil Action 17; that each policy of insurance was issued in the amount of $12,000 on a regular Middle Department Form, each representing a one-fifth share of the total risk on each class of insured property; that each policy had thereon stamped the agreement of the parties that the value of the real property insured was $15,000; that on or about April 18, 1948 a fire occurred damaging the buildings insured to the extent of 40%; that a [46
Del. 216] controversy has arisen between the parties concerning the proper method of calculating the money value of the loss sustained as a result of the fire, and the extent of the plaintiffs' obligation to reimburse the defendants for their loss under the provisions of the aforesaid policies; that the plaintiffs have offered to pay the amount of $5,650, being 37.87% of the agreed value of all insured buildings; that the said percentage on which the offer of settlement is based results from the application to the agreed value of all the buildings of the percentage which current repair costs of the damaged portion of said buildings bears to the current replacement costs of all the insured buildings; that this offer of settlement has been rejected by the defendants; that under any method of calculating the loss thus occasioned they should not be held liable for the face value of said policies. The complaint concludes with the following prayers:
(a) ‘ That the Court adjudge and declare that the plaintiffs are indebted to the defendants in the amount of $5,680.50 in full payment of the defendants' Claims under the terms of the aforesaid policies of fire insurance.
(b) ‘ That the Court adjudge and declare that the plaintiffs are not indebted to the defendants in the amount of $12,000.
(c) ‘ That the Court adjudge and declare that the defendants pay the cost of this action including reasonable counsel fees.
(d) ‘ That the plaintiffs may have such other and further adjudications and declarations as the Court may deem just and proper.’
The defendants filed an answer denying the plaintiffs method of computing their damages. The answer concludes with a prayer for judgment in favor of the defendants in the amount of $12,000, with interest from April 18, 1948, together with reasonable counsel fees and costs of suit.
On March 30th the Court ordered the following stipulation to be entered: ‘ It is stipulated and agreed by and between the [46
Del. 217] parties hereto by their respective attorneys that common questions of law and fact are involved in the above entitled cause and in No. 17 Civil Action, 1949 entitled Guiseppe Iaconi and Antonia Iaconi vs. American Insurance Company, a corporation of the State of New Jersey, et al, and that said No. 17 Civil Action, 1949 should be consolidated into the above entitled cause.’
Each party has filed a motion for summary judgment, in accordance with the provisions of Rule 56 of this Court. Accompanying the defendants' motion is an affidavit by Irvin Sagers. The affiant states in substance that he is engaged in the contracting business; that he constructed the buildings herein involved; that subsequent to the fire he inspected the buildings in their
damaged condition and concluded, based either on replacement costs or on the depreciation in value before and after the fire, that the damage to the buildings exceeded $15,000.
William E. Taylor, Jr., and Gerrard P. Kavanaugh, both of Wilmington, for plaintiffs.
Robert C. Barab and Joseph Errigo, both of Wilmington, for defendants.
A determination of the questions involved relates to the proper interpretation to be given certain language employed under the provisions of Section 50, Chapter 81, Volume 45, Laws of Delaware, Revised Code of 1935, § 511, Chapter 20, Section 50.
‘ Sec. 50. Valued Policies; Fire; Tornado; Lightning; Liability Under; Entry Thereon; to What Policies Applicable; Judgment Thereon:-(a) Whenever any policy of insurance shall be issued to insure any real property in this State against loss by fire, tornado, or lightning, and the property insured shall be wholly destroyed without criminal fault on the part of the insured, or his assigns, the amount of the insurance stated in such policy (except policies with blanket coverage provided for in Subparagraph (b) hereof) shall be taken conclusively to be the true value of the property insured and the true amount of loss and measure of damages, subject to the proviso herein; and every such policy, whether hereafter issued or renewed, shall have endorsed across the face of it the following: ‘ It is agreed between insurer and insured that the value of the real property [46
Del. 218] insured is the sum of $_____; ’ and this estimate shall be binding on both parties as to value; provided, however, that nothing herein contained shall, in case of loss, prevent the company insuring from adjusting the loss by replacing the property destroyed. And in case any owner shall effect any subsequent insurance on the same property, upon any larger value than so agreed, all such insurance, that then existing as well as that subsequently obtained, shall become void.
‘ (b) Nothing in this Act contained shall be construed as prohibiting insurers from issuing policies with blanket coverage on two or more separate buildings or units of real property or policies covering real and personal property; provided, however, that when insurance is written under a blanket item covering real and personal property or covering two or more separate buildings or units of real property, a single total value shall be agreed upon between the insurer and insured as to the real property insured, and such agreed value shall be endorsed across the face of any such policy as provided in Subparagraph (a) of this Section.
‘ (c) This Section shall apply to all policies of insurance made or issued upon real property in this State, and also to the renewal which shall be made of all policies issued in this State, and the contracts made by policies and renewals shall be construed to be contracts made under the laws of this State.
‘ The Court upon rendering judgment against any insurance company upon any such policy of insurance shall allow the plaintiff a reasonable sum as attorney's fee to be taxed as part of the costs.’
A brief review of certain enactments from which the present statute stems will be found to be pertinent. The Legislature in 1889 enacted ...