Edinburgh Assurance Company, and Cross-Appellees v. R. L. Burns Corp. And American Pacific International, Inc., and Cross-Appellants

Edinburgh Assurance Co. (Edinburgh) appeals from a judgment entered by the district court in favor of R. L. Burns Corp. (Burns) and American Pacific International, Inc. (API). Burns and API cross-appeal on the issues of damages, fraud, and bad faith. The case involves an insurance claim for damages to an offshore oil drilling platform (the Gatto). The facts are outlined in the opinion of the district court reported at 479 F.Supp. 138 (C.D.Cal.1979). We affirm the district court’s judgment except for the failure to award prejudgment interest; we reverse that part of the judgment and remand for the district court to do so.

I. Actual Total Loss

Edinburgh claims that the district court erred in its construction of section 57(1) of the British Maritime Insurance Act of 1906 (the Act). 1 Apparently, Edinburgh chal *1261 lenges both the district court’s interpretation of the Act and its application of the Act to the facts of this case.

First, Edinburgh challenges the district court’s finding that after the Gatto was struck by the typhoon, “[i]t was no longer an off-shore drilling platform. It was a dispersed mass of scrap, a wreck. The Gatto had broken up.” 2 On appeal, we will set…

concurring:

I concur in parts II and III of the opinion but I believe some expansion of the rationale of part I is at least desirable.

Edinburgh challenges the legal criteria applied by the district court in determining whether or not the Gatto was an actual total loss. Two factors control our review. First, the court’s factual conclusions can be set aside only if they are clearly erroneous. Fed.R.Civ.P. 52(a); United States v. United States Gypsum Co., 333 U.S. 364, 395 , 68 S.Ct. 525, 542 , 92 L.Ed. 746 (1948); Lund-gren v. Freeman, 307 F.2d 104 , 113 (9th Cir. 1962). The district court made extensive findings of fact regarding the physical condition of the Gatto. After reviewing evidence on the Gatto’s condition, including an underwater video tape survey of the damage to the rig, the court concluded that:

Edinburgh Assurance Co. v. R. L. Burns Corp., 479 F.Supp. 138, 149 (C.D.Cal.1979). 1 In arriving at this conclusion the court considered the Gatto’s commercial value as well as physical being. There is substantial evidence in the record to support these conclusions. They are therefore not clearly erroneous.

Second, we must consider the legal criterion applied by the court…

669 F.2d 1259 EDINBURGH ASSURANCE COMPANY, et al., Plaintiffs, Appellants and Cross-Appellees, v. R. L. BURNS CORP. and American Pacific International, Inc., Defendants, Appellees and Cross-Appellants. Nos. 80-5342, 80-5387 and 80-5663. United States Court of Appeals, Ninth Circuit. Argued and Submitted Oct. 8, 1981. Decided Jan. 22, 1982. Roger A. Ferree, Charles E. Slyngstad, Jr., McCutchen, Black, Verleger & Shea, Los Angeles, Cal., for Edinburgh Assur. Co. Steven A. Nissen, Manatt, Phelps, Rothenberg & Tunney, Los Angeles, Cal., for American Pac. Intern. Orville A. Armstrong, MacDonald, Halsted & Laybourne, Los Angeles, Cal., for R. L. Burns Corp. Appeal from the United States District Court for the Central District of California. Before GOODWIN, WALLACE and FARRIS, Circuit Judges. WALLACE, Circuit Judge: 1 Edinburgh Assurance Co. (Edinburgh) appeals from a judgment entered by the district court in favor of R. L. Burns Corp. (Burns) and American Pacific International, Inc. (API). Burns and API cross-appeal on the issues of damages, fraud, and bad faith. The case involves an insurance claim for damages to an offshore oil drilling platform (the Gatto). The facts are…