Issue-based memorandum Essay Example | Topics and Well Written Essays - 2000 words

Issue-based memorandum - Essay Example In the case of Henry and Hanna, they had insured their home with Fastpay Insurance Company. However, the insurance policy document made it clear that, in case of a vacancy of up to sixty days, it would automatically lead to suspension of the coverage. Since Henry and Hanna brought their marriage to an end, this meant that their house would remain vacant until that time when there would be a potential buyer. Unfortunately, the house was damaged by wind and fire in a freak Plano tornado. The insurance company turned down their compensation claims on the mere fact that the house was vacated for 60 days prior to the emergence of the Plano tornado. On one, hand, the provisions of the policy document are legally binding, whereas another school thought thinks that this condition should not to be deterrence for denying Henry and Hanna some sought of compensation from the insurance company. Appelle Carnes filed a suit against Texas Farm Bureau Mutual Insurance Company. Appelle Carnes sought t he services of the insurance company because they wanted to insure their cotton picking machine against risks such as fire. The two parties’ rubber stamped an endorsement that was known as â€Å"Endorsement No. ... It is at this point that the machine was damaged by fire. At this point, Appelle Carnes and Texas Farm Bureau Mutual Insurance Company could not come into an agreement on the actual amount of damage payable. This forced Carnes to file a legal suit against the insurance company. The insurance company cited two reasons, both of which meant that Carnes did not stand to be compensated in anyway whatsoever. First, the insurance company argued that Carnes had violated â€Å"Enforcement No. 10† thus Carnes should not claim any payment. Second, the policy document requires Carnes to file a sworn proof of loss and Carnes failed to do so. Hence, this barred Carnes from any recovery based on the terms of this policy. On the other hand, Carnes argued that the violation of â€Å"Endorsement No. 10† could not be used as a point of reference, because the provision is unenforceable under Art. 6. 14 of the insurance code. It is a known fact that Carnes went against the terms set under à ¢â‚¬Å"Endorsement No. 10† because he was using the cotton picking machine more than fifty miles away from the garage. That being the case, the jury concluded that the violation in that particular provision in the policy document, did not contribute to the damage of Carne’s cotton picker by fire. This finding was not challenged on appeal. In fact, the insurance company contends that Carne’s violation of â€Å"Endorsement No. 10† did not contribute to the loss, thus the edict could not apply. Furthermore, it is the contention of the insurance company that â€Å"Endorsement No. 10† is either a warranty or it is merely meant to limit the coverage, but the violation of this statute is connected to the risk, thus it bars recovery. Endorsement No. 10 is often considered to be