Friday, September 21, 2012

Howard v. Federal Crop Insurance Corp. case brief

Howard v. Federal Crop Ins. Corp.
540 F.2d 695

Facts:

-Plaintiff farmers sought to recover for losses to their tobacco crop due to alleged rain damage. -Defendant insurer denied the claims because, prior to inspection by defendant’s adjuster, plaintiffs had either plowed or disked under the tobacco fields in question to prepare the same for sowing a cover crop of rye to preserve the soil.
-A portion of the policy specifically provided that the stalks on any acreage with respect to which a loss was claimed was not to be destroyed until defendant’s adjuster had made an inspection.

Holding:
-The trial court held that the inquiry was whether plaintiffs’ compliance with the policy provision that insured shall not destroy any stalks until an inspection was made was a condition precedent to the recovery and that the failure of the insureds to comply forfeited benefits for the alleged loss.
-The provisions of a contract were not construed as conditions precedent in the absence of language plainly requiring such construction.
-Merely plowing under the tobacco stalks did not of itself operate to forfeit coverage under the policy.

Procedural History:
-Plaintiff farmers appealed an order from the United States District Court for the Eastern District of North Carolina, at Raleigh, which entered summary judgment in favor of defendant insurer in plaintiffs’ action alleging defendant failed to pay crop insurance to plaintiffs.

Rule:
where it is doubtful whether words create a promise or an express condition, they are usually interpreted as creating a promise, thereby avoiding a forfeiture.

Analysis:
-There is a general legal policy opposed to forfeitures. Insurance policies are generally construed most strongly against the insurer.
-When it is doubtful whether words create a promise or a condition precedent, they will be construed as creating a promise.
-The provisions of a contract will not be construed as conditions precedent in the absence of language plainly requiring such construction.

Conclusion:
-Court reversed the trial court’s judgment, concluding that the provisions of the policy not destroy any crops until the insurer made an inspection were not construed as conditions precedent in the absence of language plainly requiring such construction.
-The court remanded the cause for further proceedings.

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