Jacques Arley and Charlotte Arley, Husband and Wife v. United Pacific Insurance Company, a Washington Corporation

On March 1, 1963, United Pacific Insurance Company issued to Jacques and Charlotte Arley, husband and wife, its standard three year policy of fire insurance covering two buildings located on the Arley’s property in Nevada. The policy had been ordered by one Roger Chaney on January 17, 1963, but at his request was back dated to make coverage commence January 12, 1963.

A dispute over the validity of the policy arose between United and the Arleys because on January 15, three days after the effective date of the policy but two days prior to Chaney’s order, one of the buildings had been extensively damaged by fire.

When no agreement was reached, United (hereinafter plaintiff) commenced this suit in the United States District Court for the District of Oregon seeking rescission of its policy. The Arleys (hereinafter the defendants) moved for summary judgment and for dismissal of the action, but these motions were denied. They then commenced in Nevada a suit for a money judgment on the policy and moved the court to transfer this suit to Nevada or to stay proceedings pending the outcome of the litigation there. The court refused to do so and additionally advised defendants that their…