Howard v. Federal Crop Ins. Corp.
540 F.2d 695.
Facts: The Howards grew tobacco and insured it with federal crop insurance. One year, their crop was damaged by heavy rains and they claim to have lost $35,000. The plaintiffs filed a claim with the insurance adjuster, but before the adjuster arrived, the plaintiffs plowed under the fields so that they could plant rye to cover and preserve the soil. The adjuster denied the claim on the basis that the plaintiffs had violated a condition in their insurance policy that said that no stalks may be destroyed until they are inspected by the insurer. The plaintiffs sued to recover their claim. The trial court granted summary judgment for the defendants, and the plaintiffs appealed.
Issue: Does the act of plowing under the tobacco stalks forfeit coverage under the crop insurance policy? In particular, was the condition that “tobacco stalks shall not be destroyed” until inspected a condition precedent resulting in forfeiture of the coverage?
Rule: There are several “guidelines” given:
1. Forfeitures are frowned upon as a matter of law.
2. Insurance policies are construed against the insurer.
3. Contract provisions will not be construed as conditions precedent unless the contract explicitly says so.
Analysis: The words “condition precedent” are found in paragraph 5(b), but not in 5(f). This suggests that the words do not apply to 5(f), which contains the provision saying the insured party mustn’t destroy the stalks before inspection. Therefore, the court says, the policy is not forfeited, but the defendants may be able to maintain a counterclaim to recover for any damages caused by the stalks being plowed under.
Conclusion: The court holds that plowing under the stalks does not, in itself, operate to forfeit insurance coverage under this policy. The grant of summary judgment is reversed and the case is remanded for trial.