80TH CONGRESS HOUSE OF REPRESENTATIVES 2d Session REPORT {No. 1566 PACIFIC FIRE INSURANCE CO. AND AMERICAN MARCH 16, 1948.-Committed to the Committee of the Whole House and ordered to be printed Mr. CRAVENS, from the Committee on the Judiciary, submitted the following REPORT [To accompany H. R. 894] The Committee on the Judiciary, to whom was referred the bill (H. R. 894) for the relief of Pacific Fire Insurance Co. and American Orchestra Co., Inc., having considered the same, report favorably thereon with amendments and recommend that the bill do pass. The amendments are as follows: Page 1, line 6, strike out "$7,700" and insert in lieu thereof "$7,670". At the end of bill strike out the "period" and insert: : Provided, That no part of the amount appropriated in this Act in excess of 10 per centum thereof shall be paid or delivered to or received by any agent or attorney on account of services rendered in connection with this claim, and the same shall be unlawful, any contract to the contrary notwithstanding. Any person violating the provisions of this Act shall be deemed guilty of a misdemeanor and upon conviction thereof shall be fined in any sum not exceeding $1,000. The purpose of the proposed legislation is to pay the sum of $7,670 to Pacific Fire Insurance Co. and to pay the sum of $1,200 to American Orchestra Co., Inc., in full settlement of all claims against the United States for property damage and loss of use of a Reo motorbus, serial No. 385P119, motor No. 111A-406, which was destroyed by fire while traveling on property of the United States Navy at Earle, N. J., on November 10, 1944. STATEMENT OF FACTS The Pacific Fire Insurance Co. is a corporation duly organized under and pursuant to the laws of the State of New York, engaged in the general business of insuring property against loss by reason of fire, theft, or other casualty. The American Orchestra Co., Inc., is a corporation duly organized under and pursuant to the laws of the State of New Jersey, engaged in the business of owning and operating motorbusses for hire. The Pacific Fire Insurance Co. states that prior to the 10th day of November 1944 it issued its certain policy of insurance, No. A-74042 to Charter Coach Corp. and/or Newark Sightseeing Co. and/or American Orchestra Co., Inc., covering a certain Reo motorbus, serial No. 385P119, motor No. 111A-406, against loss by reason of fire, theft, or other casualty, and that thereafter, on or about the 10th day of November 1944, at or about 7:10 a. m., the said Reo motorbus was under contract to transport stevedores from the Naval Ammunition Depot at Leonardo, N. J. to Newark, N. J.; that the bus had been ordered out on pier No. 1 to pick up workmen and said bus was occupied at the time by an armed marine guard, that the workmen then boarded the bus and were passengers therein as the said bus traveled toward the exit gate; that the said bus was being operated in a careful and prudent manner by one George Alliston, Newark, N. J., and while being so operated on pier No. 1, naval ammunition depot, Leonardo, N. J., it did pass over a switch-box steel cover forming part of the flooring of the pier; that the said cover was in an unsafe condition due to carelessness and neglect in the maintainance thereof; and said switch-box cover did become dislodged, tilted, and did puncture the gasoline storage tank located in the lower right side of the said Reo motorbus, that fire did ensue which completely destroyed the said Reo motorbus and rendered it useless. Pacific Fire Insurance Co. further states that the reasonable and fair value of said bus was $8,200; that the American Orchestra Co., Inc., agreed to retain the salvage for $500; and that the Pacific Fire Insurance Co. did pay to its insured the sum of $7,700; and by such payment and in accordance with the terms of the insurance policy did become subrogated to the rights and claims of the American Orchestra Co., Inc., against the United States Navy to the extent of its payment. American Orchestra Co, Inc. state that from the date of the said fire to the present it has been deprived of the use of an income from the said Reo motorbus; that to this date, more than 1 year after the occurrence of the fire, only 10 percent of the necessary parts to rebuild the bus have been available and procured; that a fair and reasonable estimate of the net profit lost because of inability to operate and use said Reo motorbus is $100 per week; but that they are willing to compromise their loss of use claim for the sum of $1,200. The companies further state that on March 12, 1945, formal claim was filed with the commanding officer of the naval ammunition depot, Earle, N. J.; that on June 7, 1945 the Assistant Judge Advoacte General of the Navy did advise that all claims for the damage and loss of use thereof were denied; that on June 20, 1945, plaintiffs did request a rehearing which was subsequently granted; that on August. 20, 1945, further and complete evidence was submitted to the district legal office, United States Navy, 90 Church Street, New York, N. Y., and that on the basis of the complete evidence submitted and facts developed at that hearing before the district legal officer, the Navy Department, Office of the Judge Advocate General, did admit that the accident was caused through the negligence of naval personnel and offered favorable consideration of our claim subject to the $1,000 limitation imposed by the act of December 28, 1922 (42 Stat. 1066; 31 U. S. C. secs. 215-217) under which the claims are payable. The Navy Department in its report dated July 16, 1947, states that the Pacific Fire Insurance Co. presented a claim for $7,670 and your committee is unable to reconcile this amount with the amount of the bill of $7,700. Therefore the lesser amount is being recommended. The Navy Department further admits negligence and your committee is of the opinion that these claims should be paid for the negligence of the Navy Department in failing to keep the switch-pit cover plate in a proper state of repair to permit the safe passage of traffic. Therefore, your committee recommends that the amount of $7,670 be paid to the Pacific Fire Insurance Co. and $1,200 be paid to the American Orchestra Co., Inc. Hon. EARL C. MICHENER, NAVY DEPARTMENT, OFFICE OF THE JUDGE ADVOCATE GENERAL, Chairman of the Committee on the Judiciary, House of Representatives. MY DEAR MR. CHAIRMAN: The bill, H. R. 894, "for the relief of Pacific Fire Insurance Co. and American Orchestra Co., Inc.," was referred by your committee to the Navy Department with request for a report thereon. The purpose of the bill is to authorize and direct the Secretary of the Treasury to pay to "Pacific Fire Insurance Co., New York, N. Y., the sum of $7,700, and to American Orchestra Co., Inc., Newark, N. J., the sum of $1,200. The payment of such sums shall be in full settlement of all claims of the said Pacific Fire Insurance Co. and American Orchestra Co., Inc., against the United States on account of property damage to and loss of use of a Reo motorbus, serial No. 385P119, motor No. 111A-406, which was destroyed by fire while traveling on property of the United States Navy at Earle, N. J., on November 10, 1944.” The investigative report of the incident upon which the subject legislation is based discloses that a passenger bus owned by the American Orchestra Co., Inc., was leased to the Charter Coach Co., which in turn chartered the bus, with a driver, to the Reliable Coach Co. On November 10, 1944, at about 7:05 a. m., the bus was being driven from the Navy pier at the United States naval ammunition depot, Earle, N. J., with approximately 33 passengers, civilian workers employed by an independent contractor engaged by the Government for work on the pier. As the bus left the pier, a steel plate designed and used as a railroad switch-pit cover, which formed a part of the surface of the roadway, became entangled with the understructure of the bus, cut a hole in the gasoline tank, and struck the storage battery. Sparks ignited the gasoline spilled from the broken tank and set fire to the bus, causing severe damage to the vehicle and injury to many of the passengers. The American Orchestra Co. claims $1,200 for loss of use of the bus for 12 weeks, based on a profit of $100 per week. The American Orchestra Co. was insured for fire and collision by the Pacific Fire Insurance Co., which presents its claim for the cost of repairs to the bus, estimated at $7,670, as a subrogee. The bus was also insured with the Globe Indemnity Co. for public liability and property damage. Upon investigation it was found that the steel plate which was used as a cover for the railroad switch on the pier, was the property of the Navy Department and its maintenance and repair were functions of the maintenance department of the United States naval ammunition depot, Earle, N. J. Train crewmen were required to lift the cover plate to operate the railroad switch, and to replace the cover after each operation. The cover plate had been left in an insecure position by the train crew after the last operation of the switch prior to the accident. Examination of the plate after the accident showed that it had been in a state of disrepair for several months prior thereto and, as a result, could not be fastened securely. The Navy was under a duty to keep the pit cover in a condition which would provide a safe passageway for vehicles and persons and though there was no actual notice of the existing unsafe condition, such condition had existed for a sufficient period of time to put the Navy on constructive notice of the defect. It, therefore, appears that negligence in failing to keep the switch-pit cover plate in a proper state of repair to permit the safe passage of traffic was the proximate cause of the accident which caused damage to the American Orchestra Co., Inc., and the Pacific Fire Insurance Co. The Navy Department has been advised by the Bureau of the Budget that while there would be no objection to enactment of legislation which would provide relief to the extent of the loss of the use of the bus during the period it was undergoing repairs, the payment of $7,700 to the Pacific Fire Insurance Co., as proposed by the bill, would not be in accord with the program of the President. Respectfully yours, O. S. COLCLOUGH, Rear Admiral, United States Navy, NAVY DEPARTMENT, OFFICE OF THE JUDGE ADVOCATE GENERAL, Re policy 74042P07-Claim A95367, Charter Coach Corp. and/or Newark Sightseeing Co. et al., fire November 10, 1944, Charter Coach Corp. and/or American Orchestra Co. versus United States Navy PACIFIC FIRE INSURANCE Co., New York 8, N. Y. DEAR SIRS: Your letter of August 20, 1945, in the above-captioned matter, addressed to the district legal office, New York, N. Y., has been forwarded to this office, together with enclosures. In view of the additional information furnished and facts developed at the conference with the district legal officer, Third Naval District, New York, N. Y., this office is now of the opinion that the accident was caused through the negli gence of naval personnel and will give favorable consideration to the claim for property damage, subject to the $1,000 limitation imposed by the act of December 28, 1922 (42 Stat. 1066; 31 U. S. C., secs. 215-217) under which the claim is pavable. The American Orchestra Co. has filed with this office its claim for $7,700 for the damage to the bus and $1,200 for the loss of use thereof. The claim further discloses that the loss was covered in full by insurance. Since the total amount payable under the applicable act is $1,000, it will be necessary that this office be furnished a statement that the American Orchestra Co. and Pacific Fire Insurance Co. will accept the sum of $1,000 in full settlement of their claim resulting from the destruction of the American Orchestra Co. bus, if it is their intent to effect this settlement. Furthermore, the claim of American Orchestra Co. is limited to the amount of the loss it personally assumed under its insurance policy with your company. A separate claim for the difference between the deductible amount assumed by your assured and the $1,000 statutory limitation may be made by your company on the Form No. 28 forwarded herewith. This office must also be furnished a subrogation agreement by which your assured assigns to you all interest in the claim over and above the deductible amount assumed by it. If the settlement on the $1,000 basis is acceptable to you and your assured, it is requested that your assured forward this office a statement that it will accept the amount that it assumed of the loss in full settlement of its claim now on file for $7,700 property damage and $1,200 loss of use. Upon receipt of this statement, together with the joint statement accepting the $1,000 settlement for both claimants, the claim of Pacific Fire Insurance Co. on Form No. 28, and the subrogation agreement, the claims will be approved and certified to Congress for appropriation. When the appropriation is made you will be duly notified and advised as to the necessary steps in order to secure payment. In the event the proposed settlement is not acceptable to you, your only recourse against the Government is through a private bill in Congress, which legislation the Navy Department does not initiate. Sincerely yours, C. J. WHITING, EXHIBIT A. DRIVER'S STATEMENT am I, George Alliston, residing at 656 South Nineteenth Street, Newark, N. J., a employed as chauffeur by American Orchestra Co. of 470 South Tenth Street in Newark, N. J., and was so employed on November 10, 1944. My chauffeur license is No. 911929 New Jersey. On November 10, 1944, at about 7:10 a. m., I was driving my employer's Reo 29 passenger bus, license No. OP356 N. J. and while driving along pier No. 1 at naval ammunition depot, Leonardo, N. J., I heard a clanging noise and wondered what it was. I looked into my rear view mirror and saw nothing coming behind me. Then one of my passengers said there was a fire along the pier where the bus had traveled and looking again in my mirror I noticed fire was coming from under the center of the bus. I slowed down from about 8 miles per hour to about 2 miles per hour and I called to my passengers to be calm and get out of the bus through both doors, one in the left rear and the other at the front right. When I finally stopped the bus I got out my Pyrene extinguisher and tried to put the fire out around center of bus near gas tank but it got beyond my control and one of my passengers went back to call the Navy Fire Department which arrived at bus in about 15 minutes. At that time the bus was very badly damaged. I left the pier to phone my employer in Newark and talked to Mr. Lerf, told him what had happened and he said he would come to scene of fire. After the fire was put out, we found one of the pier switch cover plates was wedged up between the battery box and the gas tank of the bus, in right center of bus, and we had to pry bent plate away from its position to move bus away from location on pier. Later in the day I was questioned by the adjuster for the Globe Insurance Co. and my employer and only last week I was interviewed by a Navy officer at pier. Officer said he was making out a report and wanted all details. My bus with two others had picked up passengers at end of pier number 2 and at time of accident which caused fire I was on my way with passengers to exit of pier and this switch-plate cover is about 2 miles away from exit. I had only traveled over this pier on one other occasion and this was about 2 or 3 days before. I had not noticed the switch plate which is part of roadway. One of the Navy marine officers commended me for the good work I had done in saving passengers and getting the bus away from burning gasoline which gushed out of damaged gas tank. One of my passengers said the plate that was missing from switch on roadway was no doubt the one which caused the accident. I walked back on the pier and noticed this plate was missing and was the plate that was wedged into my bus. Dated November 28, 1944. Witness: GEORGE Alliston. JOHN H. DONOVAN. STATEMENT OF RALPH E. HOBBIS I, Ralph E. Hobbis, residing at 207 Sagamore Road, Maplewood, N. J., being duly sworn, depose and say, that I am a registered construction engineer acting as a consulting engineer, have been in this profession approximately 25 years. am a member of the New Jersey State Society of Professional Engineers and Land Surveyors and a member of Society of American Military Engineers. My general experience has been in connection with structural steel work, reinforced concrete construction which involves handling of steel in various forms which have been subjected to the weather, and construction of steel-plate trap doors, et cetera. On November 18, 1944, I examined a pit cover in a warehouse at the naval ammunition depot at Leonardo, N. J. This cover was identified by two Navy Officers and also by a Mr. Joseph Casey of Newark, N. J., who had examined the cover on a previous occasion. On examination I found that three metal lugs which act as hinges were missing from the plate and careful examination disclosed that the point of breakage was in an advanced state of rusting and in my opinion this break had occurred at least 2 or 3 months prior to my examination. I feel SRat this is a conservative estimate. I am also of the opinion that the chain which restricted the lift of the cover had been broken free from the cover for, I should say, at least a number of months. Sworn to and subscribed this 7th day of August 1945. RALPH E. HOBBIS. ROBERT E. FLAHERTY, Master in Chancery of New Jersey. |