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Atlantic Mut. Ins. Co. v. Cooney

Atlantic Mut. Ins. Co. v. Cooney

United States Court of Appeals for the Ninth Circuit

February 26, 1962

No. 16842

Opinion

 [*256]  This action was instituted against Robert J. Cooney, a citizen of California, doing business as Allied Enterprises, by Atlantic Mutual Insurance Company, a New York corporation, as assignee and subrogee of Army and Air Force Exchange Service, a government instrumentality. National Union Fire Insurance Company, a Pennsylvania corporation, intervened pursuant to leave of court.

Cooney is an export packer, who packages goods for export. Exchange was one of his customers. On August 15, 1952, Cooney and Exchange entered into an export packing agreement whereby Cooney agreed, 'pursuant to purchase orders to be issued' by Exchange, 'to receive merchandise from delivering carriers or vendors and to pack and perform all other necessary work * * *'. Purchase orders were thereafter issued by Exchange to Cooney, and [**2]  Cooney began doing a substantial amount of export packing for Exchange.

The contract of August 15, 1952, provided in paragraph 7:

'7. Export Packer (Cooney) agrees to accept full liability as an insurer of the property of Exchange Service and the property of others for which Exchange Service may be liable while said property of Exchange Service and property of others is in the care, custody, or control of said Export Packer; and Export Packer further agrees to reimburse the Exchange Service in full for any physical loss or damage to the aforementioned property, arising from any cause whatsoever occurring while such property is in the care, custody, or control of Export Packer.'

On October 16, 1953, a fire (which started on adjoining premises and did not involve any negligence on his part) occurred at Cooney's warehouse and destroyed over $ 350,000 worth of Exchange merchandise, which Cooney had in his possession for packing.

On Octover 1, 1950, Atlantic had issued an open policy of insurance to Exchange which covered all of the Exchange's export shipments against loss by fire, and liability for loss at the Coonery warehouse being limited to $ 100,000. 1 This policy contained [**3]  the following provisions:

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303 F.2d 253 *; 1962 U.S. App. LEXIS 5826 **

ATLANTIC MUTUAL INSURANCE COMPANY, a corporation, Appellant, v. Robert J. COONEY, doing business under the firm name and style of Allied Enterprises, and National Union Fire Insurance Company of Pittsburgh, Pa., a corporation, Appellees. NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA., a corporation, Appellant, v. Robert J. COONEY, doing business under the firm name and style of Allied Enterprises, Appellee. Robert J. COONEY, doing business under the firm name and style of Allied Enterprises, Appellant, v. NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA., a corporation, Appellee

CORE TERMS

insured, bailee, subrogation, carrier, merchandise, cases, trial court, concealment, assured, packing, export, phase, insurance company, rights, contends, provisions, insurance policy, coverage, railroad, terms, liability for loss, policy provision, mutuality, custody, Packer, subrogation rights, settlement, customers, destroyed, indemnify

Business & Corporate Compliance, Contracts Law, Types of Contracts, Executory Contracts, Contract Formation, Consideration, Mutual Obligations, Governments, Federal Government, Claims By & Against, Contracts Law, Third Parties, Subrogation, Insurance Law, Claim, Contract & Practice Issues, Subrogation, General Overview, Torts, Multiple Defendants, Indemnity, Contractual Indemnity, Bailments, Lease Agreements, Personal Property, Real Property Law, Landlord & Tenant, Landlord's Remedies & Rights, Negligence, Duty to Repair, Transportation Law, Carrier Duties & Liabilities, Damages, Equitable Subrogation, Policy Interpretation, Civil Procedure, Trials, Jury Trials, Province of Court & Jury, Contract Formation, Liability & Performance Standards, Notice to Insurers, Prejudice to Insurers, Property Insurance, Obligations, Disclosure Obligations, Disclosure Obligations by Insureds, Materiality, Types of Insurance, Excess Insurance, Apportionment of Liability, Remedies, Judgment Interest, Insurable Interests