E.M.M.I. Inc. v. Zurich American Ins. Co.

• Decision Date: 22 July 2002
• Docket Number: No. B152740.,B152740.
• Citation: 122 Cal.Rptr.2d 530,100 Cal.App.4th 460
• Court: California Court of Appeals Court of Appeals
• Parties: E.M.M.I. INC., Plaintiff and Appellant, v. ZURICH AMERICAN INSURANCE COMPANY, Defendant and Respondent.

122 Cal.Rptr.2d 530

100 Cal.App.4th 460

E.M.M.I. INC., Plaintiff and Appellant, v. ZURICH AMERICAN INSURANCE COMPANY, Defendant and Respondent.

No. B152740.

Court of Appeal, Second District, Division 5.

July 22, 2002.

Review Granted October 23, 2002.

Quisenberry & Kabateck, John N. Quisenberry, Brian S. Kabateck, Heather M. Mason, Los Angeles, Suzanne L. Havens Beckman, and Jerilyn Jacobs for Plaintiff and Appellant.

Bishop, Barry, Howe, Haney & Ryder, Mark Koop, and Jay E. Framson for Defendant and Respondent.

TURNER, P.J.

I. INTRODUCTION

This appeal involves the question of whether a jeweler's block insurance policy provides coverage when an insured's employee is standing behind his car when the automobile, which contains jewelry, is driven away by a thief. E.M.M.I. Inc., doing business as Universal Fine Jewelry (plaintiff), appeals from a summary judgment in favor of Zurich American Insurance Company (defendant). Plaintiffs salesperson, Brian Callahan, was outside his car inspecting a possible mechanical malfunction. The car, containing jewelry display cases, was stolen. The trial court concluded Mr. Callahan was not "actually in or upon" the car at the time of the theft, therefore, the jeweler's block insurance policy issued by defendant did not cover the loss. We agree. Accordingly, we affirm the judgment.

II. BACKGROUND

Jeweler's block insurance was conceived by Lloyds of London at the turn of the century. (JMP Associates, Inc. v. St. Paul Fire & Marine Ins. Co. (1997) 345 Md. 630, 693 A.2d 832, fn. 1; 70 N.Y.Jur.2d (1998) Insurance, § 1530; Annot., Construction and Effect of "Jeweler's Block" Policies or Provisions Contained Therein (1994) 22 A.L.R.5th 579, Summary.) Jeweler's block insurance differs from other property insurance. As the United States District Court explained in Star Diamond, Inc. v. Underwriters at Lloyd's, London (E.D.Va.1997) 965 F.Supp. 763, 765: "Jewelers' block insurance is different from most other traditional forms of property insurance which are considered `named-peril' insurance policies. Under named-peril policies, an insurer agrees to indemnify its insured for losses resulting from certain risks of loss or damage which are specifically enumerated within the provisions of the policy. In contrast, under a jewelers' block policy all risks of loss or damage to jewelry may be insured, subject to certain exceptions." (See 70 N.Y.Jur.2d, supra, Insurance, § 1530.)

The policy contained an exclusion and an exception to the exclusion as follows: "We will not pay for `loss' caused by or resulting from any of the following: [¶] ... Theft from any vehicle unless you, an employee, or other person whose sole duty is to attend the vehicle are actually in or upon such vehicle at the time of the theft." (Italics added.) This exclusion has long been included in jeweler's block insurance policies as evidenced by repeated discussions of it in the decisional authority cited below. Insurance coverage is claimed in this case under the exception to the exclusion.

Plaintiffs salesperson, Mr. Callahan, was traveling from his home to an appointment. He had two jewelry display cases locked in the trunk of his car. He heard a rattling noise coming from the rear of his automobile. He pulled to the side of the road and got out to inspect the source of the noise. He left the car running with the keys in the ignition. Mr. Callahan bent down to look at the tail-pipe area of his car. A man then brushed by Mr. Callahan. The unidentified man got into Mr. Callahan's car and drove away. The car was recovered, but the jewelry display cases were missing.

Defendant denied plaintiffs insurance claim on the ground Mr. Callahan was not "actually in or upon" his car at the time of the loss. Plaintiff filed this action against defendant for: contract breach; tortious breach of the implied covenant of good faith and fair dealing; and unfair business practices. The trial court granted defendant's summary judgment motion. Judgment was entered in favor of defendant. Plaintiff filed a timely notice of appeal.

III. DISCUSSION

A. Evidentiary Ruling

Plaintiff contends the trial court erred in sustaining defendant's objections to evidence presented in the summary judgment motion opposition. Plaintiff sought to introduce an "expert's" opinion, based on industry custom and practice, that coverage existed on two independent grounds. The first aspect of the proffered opinion was that: Mr. Callahan was the victim of a Colombian jewelry theft ring; the commission of the theft began when the robbers tampered with Mr. Callahan's car; and therefore the unattended vehicle exclusion was not triggered. The second aspect of the opinion was that: Mr. Callahan was attending to the car at the time of the theft; hence, Mr. Callahan was "upon" the vehicle within the meaning of the policy. Plaintiff also sought to introduce deposition testimony of Mr. Callahan. Mr. Callahan had spoken to an unidentified Chicago police lieutenant and a "lead FBI agent." The unidentified lieutenant and the FBI agent expressed opinions concerning the robbery in their conversations with Mr. Callahan. The trial court disallowed the proffered evidence as "impermissibly speculative and nonspecific to the alleged incident."

We find no error. Opinion testimony of the type here regarding the scope, meaning, or interpretation of policy language is inappropriate. (Pieper v. Commercial Underwriters his. Co. (1997) 59 Cal.App.4th 1008, 1017, 69 Cal.Rptr.2d 551; Cooper Companies v. Transcontinental Ins. Co. (1995) 31 Cal.App.4th 1094, 1100, 37 Cal.Rptr.2d 508; Devin v. United Services Auto. Assn. (1992) 6 Cal.App.4th 1149, 1157-1158, fn. 5, 8 Cal.Rptr.2d 263; National Auto. & Casualty Ins. Co. v. Stewart (1990) 223 Cal.App.3d 452, 458-459, 272 Cal.Rptr. 625; Hartford Accident & Indemnity Co. v. Sequoia Ins. Co. (1989) 211 Cal.App.3d 1285, 1304-1305, 260 Cal.Rptr. 190; Suarez v. Life Ins. Co. of North America (1988) 206 Cal.App.3d 1396, 1406-1407, 254 Cal.Rptr. 377; Croskey et al., Cal. Practice Guide: Insurance Litigation (The Rutter Group 2001) ¶¶ 4:13:15, 4:17-4:17.5.) In Pieper v. Commercial Underwriters his. Co., supra, 59 Cal.App.4th at page 1017, 69 Cal. Rptr.2d 551, for example, our colleagues in Division Three of this appellate district explained that opinion evidence as to the meaning of an insurance policy term was irrelevant. "[T]he objective reasonable interpretation of the insured would not depend on the views of so-called experts except to the extent these views represent the popular or common understanding of the term." (Ibid.) In National Auto. & Casualty Ins. Co. v. Stewart, supra, 223 Cal.App.3d at pages 458-459, 272 Cal.Rptr. 625, retired Presiding Justice John T. Racanelli noted, "The opinion of a linguist or other expert as to the meaning of the policy is irrelevant to the court's task of interpreting the policy as read and understood by a reasonable lay person [citations]." In the present case, opinion as to the meaning of the term "upon" based on industry custom and practice was irrelevant to the court's interpretation of the policy language.

B. Summary Judgment

1. Standard of Review

We apply the parties' summary judgment burdens of production described by the Supreme Court in Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850-851, 107 Cal.Rptr.2d 841, 24 P.3d 493: "From commencement to conclusion, the party moving for summary judgment bears the burden of persuasion that there is no triable issue of material fact and that he is entitled to judgment as a matter of law. That is because of the general principle that a party who seeks a court's action in his favor bears the burden of persuasion thereon. [Citation.] There is a triable issue of material fact if, and only if, the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof.... [¶][T]he party moving for summary judgment bears an initial burden of production to make a prima facie showing of the nonexistence of any triable issue of material fact; if he carries his burden of production, he causes a shift, and the opposing party is then subjected to a burden of production of his own to make a prima facie showing of the existence of a triable issue of material fact.... A prima facie showing is one that is sufficient to support the position of the party in question. [Citation.]" (Fns. omitted; accord, Kids' Universe v. In2Labs (2002) 95 Cal.App.4th 870, 878,116 Cal.Rptr.2d 158.)

We review the trial court's decision to grant the summary judgment de novo. (Johnson v. City of Loma Linda (2000) 24 Cal.4th 61, 65, 67-68, 99 Cal.Rptr.2d 316, 5 P.3d 874; Sharon P. v. Arman, Ltd. (1999) 21 Cal.4th 1181, 1188, 91 Cal.Rptr.2d 35, 989 P.2d 121, disapproved on another point in Aguilar v. Atlantic Richfield Co., supra, 25 Cal.4th at p. 853, fn. 19, 107 Cal.Rptr.2d 841, 24 P.3d 493.) Because there is no dispute as to any material fact, we construe the insurance policy and independently determine whether defendant is entitled to judgment as a matter of law. (Waller v. Truck Ins. Exchange (1995) 11 Cal.4th 1, 18, 44 Cal.Rptr.2d 370, 900 P.2d 619; State Farm Mut. Auto. Ins. Co. v. Partridge (1973) 10 Cal.3d 94, 100, 109 Cal.Rptr. 811, 514 P.2d 123; Nissel v. Certain Underwriters at Lloyd's of London (1998) 62 Cal.App.4th 1103, 1110, 73 Cal. Rptr.2d 174; Revesz v. Excess Ins. Co. (1973) 30 Cal.App.3d 125, 127, 106 Cal. Rptr. 166.)

2. Plaintiffs Arguments on Appeal

Plaintiffs contentions on appeal center on the construction of the term "upon" in the insurance policy. Plaintiff does not specifically assert that language is ambiguous. Moreover, plaintiff makes no claim as to the reasonable expectations of the insured.

3. Principles of Insurance Policy Interpretation

The interpretation of an insurance policy is a question of law. (Waller v. Truck Ins. Exchange, Inc., supra, 11 Cal.4th at...