Safeway Moving and Storage Corporation, Appellee, v. Aetna Insurance Company and Security Insurance Group, Appellants.safeway Moving and Storage Corporation, Cross-appellant, v. Aetna Insurance Company and Security Insurance Group, Cross-appellees, 452 F.2d 79 (4th Cir. 1971)

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US Court of Appeals for the Fourth Circuit - 452 F.2d 79 (4th Cir. 1971)

Argued Aug. 25, 1971. Decided Dec. 6, 1971

Norman F. Slenker, Arlington, Va. (Duff, Slenker, Brandt & Jennings, Arlington, Va., on brief), for Aetna Ins. Co. and Security Ins. Group.

A. Andrew Giangreco, Alexandria, Va., and Robert E. Manuel, Washington, D.C. (Giangreco, Seay & Manuel, Alexandria, Va., on brief), for Safeway Moving & Storage Corp.

Before HAYNSWORTH, Chief Judge, SOBELOFF, Senior Circuit Judge, and RUSSELL, Circuit Judge.


After considering the briefs and oral arguments of the parties, we find no reason to disturb the District Court's findings of fact, 317 F. Supp. 238, and perceive no error of law. We sustain the District Court's conclusion that the Appellants breached their duty to defend. The finding of negligence on the part of Safeway by the Armed Services Board of Contract Appeals is a proper basis for the District Court's judgment.

The District Court awarded directly to Safeway damages against the insurance companies for $101,500 plus interest. As to the included award of $1,500 plus interest allowed to compensate Safeway for the expense of defending itself in the administrative hearing and the appeal to the administrative Board, the judgment shall stand. But the judgment in favor of Safeway for the remaining $100,000 (the face amount of the two fire liability insurance policies) plus interest is modified by impressing upon it a trust for the benefit of those property owners or their subrogees who obtain judgments against Safeway for damages caused by the fire.

The judgment of the District Court, as modified by this opinion, is