Kossian v. American National Insurance Co.

254 Cal.App.2d 647 (1967)

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Nature of the Case

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Facts

A fire destroyed a portion of an Inn. The Inn was owned by Reichert and was subject to a first deed of trust in which D was the beneficiary. D’s interest in the land was protected by fire insurance policies. Reichert, as owner in possession, entered into a written contract with P whereby P agreed to clean up and remove the debris from the fire damaged portion of the property. The cost of this contract was $18,900. D had no knowledge of the agreement between Reichert and P. P started work in March 1964 and finished in early April. During this time, Reichert was in possession of the premises as owner. D caused a notice of default under the deed to be filed four days after the contract had been entered into between P and Reichert. There is no record of whether P had actual knowledge of the notice of default until after he completed the work. Sometime after completion of the work, Reichert filed for bankruptcy. The trustee in bankruptcy abandoned the premises comprising the Inn and any interest in the fire policies up the amount of $424,000. Each policy contained provisions insuring against the cost of cleanup from a fire. Reichert and his wife then assigned their interest in the policies to D in accordance to the terms of the deed of trust. D then submitted proofs of loss for a total claim of $160,000 including the sum of $18,000 as the estimate for the cost of cleanup. A compromise of $135,620 was reached with the carriers, and that amount was paid to D. P sued D to get paid for his cleanup work under unjust enrichment. D demonstrated that there was no direct relationship between P and D in regard to either the work performed on the property after the fire or in relation to the fire insurance policies. The trial court granted D summary judgment and P appealed.