## Facts

- A. H. Fox and Edith Fox operated the Firebird Motor Hotel in Cheyenne, Wyoming and were insured under a fire policy issued by Connecticut Fire Insurance Company.
- A fire on March 25, 1964 destroyed a substantial portion of the motel.
- The policy required a sworn proof of loss within 60 days after the fire unless extended in writing.
- Connecticut Fire retained General Adjustment Bureau, Inc. (G.A.B.) to investigate and adjust the claim.
- A G.A.B. adjuster had the insureds sign a non-waiver agreement stating that investigative actions would not waive policy provisions and that waivers must be in writing.
- On May 5, 1964, the insureds submitted inventory forms and a contractor bid; the adjuster rejected them as inadequate.
- After the original 60-day period expired, the adjuster delivered a June 3, 1964 letter extending the proof-of-loss deadline to July 3, 1964.
- The insureds submitted a sworn proof of loss on June 6, 1964, within the extended period.
- Connecticut Fire did not pay and later rejected the proof of loss; the insureds sued on the policy and also alleged negligent adjustment against Connecticut Fire and G.A.B.
- The jury found by special interrogatories that the insureds did not cause the fire and that the proof-of-loss time was extended by G.A.B. agents with the insurer’s approval.
- The jury returned a single $92,000 verdict “against both defendants.”

## Issues

1. Whether recovery was barred as a matter of law because the proof of loss was untimely under the policy and non-waiver agreement.
2. Whether the jury instructions improperly stated the insurer’s burden of proof on its arson defense.
3. Whether the evidence and instructions supported a negligence verdict against the independent adjuster, G.A.B.
4. Whether submitting only a joint verdict form (not allowing separate liability findings) required reversal.

## Decision

- Affirmed the judgment against Connecticut Fire Insurance Company on the policy.
- Held the proof of loss was not untimely as a matter of law because a written extension was supported by evidence and the jury found it was authorized by the insurer.
- Rejected the insurer’s challenge to the arson instructions and upheld the jury’s finding that the insureds did not cause the fire.
- Reversed the judgment against General Adjustment Bureau, Inc. because there was no evidence of negligence and no negligence instruction was given to the jury.
- Held any defect in the joint verdict form was harmless as to the insurer under Federal Rule of Civil Procedure 61.

## Legal Principles

- A written extension of a policy proof-of-loss deadline, made by an adjuster acting with the insurer’s authorization, can render a later-filed proof of loss timely notwithstanding policy anti-waiver language and a non-waiver agreement.
- When the timeliness of a proof of loss turns on disputed facts concerning extension and authorization, an appellate court defers to supported jury findings.
- Arson asserted to defeat coverage is a defense the insurer must prove; a jury’s rejection of that defense will stand if the instructions properly allocate the burden and the evidence supports the finding.
- An independent adjuster cannot be held liable for negligent adjustment absent evidence establishing negligent conduct and a properly submitted negligence theory to the jury.
- An erroneous verdict form may be treated as harmless where it could not have affected the proper allocation of liability.

## Conclusion

The court enforced coverage because the insureds filed a sworn proof of loss within a written, insurer-approved extension and the insurer failed to prove arson, but it set aside the verdict against the independent adjuster because the negligence claim lacked evidentiary and instructional support.


Conn. Fire Ins. Co. v. Fox, 361 F.2d 1 (10th Cir. 1966)