Nissel v. Certain Underwriters at Lloyd's of London

• Decision Date: 02 April 1998
• Docket Number: No. B104618,B104618
• Court: California Court of Appeals Court of Appeals
• Parties: , 98 Cal. Daily Op. Serv. 2470, 98 Daily Journal D.A.R. 3365 Raphael NISSEL, Plaintiff and Appellant, v. CERTAIN UNDERWRITERS AT LLOYD'S OF LONDON, Defendant and Respondent.

Page 174

73 Cal.Rptr.2d 174

62 Cal.App.4th 1103, 98 Cal. Daily Op. Serv. 2470,

98 Daily Journal D.A.R. 3365

Raphael NISSEL, Plaintiff and Appellant, v. CERTAIN UNDERWRITERS AT LLOYD'S OF LONDON, Defendant and Respondent.

No. B104618.

Court of Appeal, Second District, Division 3, California.

April 2, 1998.

[62 Cal.App.4th 1105] Philip Kaufler, Beverly Hills, for Plaintiff and Appellant.

Soltman & O'Meara, Steven B. Soltman, Woodland Hills, and James S. Cooper, Los Angeles, for Defendant and Respondent.

CROSKEY, Associate Justice.

The plaintiff and appellant, Raphael Nissel, doing business as Raphy Diamonds (hereinafter, "Nissel"), appeals from a summary judgment entered in favor of the defendant and respondent, Certain Underwriters at Lloyd's of London (hereinafter, "Lloyd's"). ¹ Lloyd's had issued a Jeweler's Block Policy to Nissel which included coverage for losses suffered as a result of theft but expressly excluded losses from an "unattended" vehicle. As we conclude that the record demonstrates that (1) there is no dispute that the loss for which Nissel sought recovery under the policy was one falling within that exclusion and (2) the exception to the exclusion relied upon by Nissel does not apply, we affirm the judgment.

FACTUAL AND PROCEDURAL BACKGROUND ²

Prior to December 17, 1993, Nissel was engaged in the wholesale jewelry business in Los Angeles County and operated that business under the fictitious firm name and style of Raphy Diamonds. He sold loose and finished goods to retail jewelry stores. Nissel employed one Jeffrey Bolling as a traveling sales representative. Bolling would take jewelry merchandise on the road and visit various retailers in Southern California. He transported the jewelry in his own car and would show it to prospective retail customers.

On December 17, 1993, Bolling was in Hemet, California on a sales trip. He had with him over $300,000 in diamonds and other precious stones which either belonged to Nissel or other persons from whom Nissel had received the merchandise on consignment. ³ At about 8:45 a.m. on that date, all of this merchandise was stolen from Bolling's unattended vehicle. According to the declaration of an eyewitness, one Alvin Cooper, two men approached an empty dark four door car parked in front of the Denny's Restaurant located at 1770 W. Florida Avenue, Hemet, California. Cooper was having breakfast with his wife at the time and he watched the two men open one of the rear doors to the vehicle and struggle to remove something from the back seat. Within a few minutes, they emerged from the vehicle with a large bulky dark-colored bag. They then entered another vehicle and drove away. Cooper then concluded that the two men probably did not own the dark car from which they had removed the bag and that a crime had taken place. He reported the incident to the manager of Denny's. Apparently, the police were called. A Hemet Police Department report described the occurrence of a claimed vehicle theft, at about 0845 hours on December 17, 1993 in front of the Denny's Restaurant. A copy of that report was attached to Lloyd's papers in support of its motion. It reflects that witness statements were taken from both Bolling and Cooper. ⁴

At the time of this loss, Nissel was covered by a Jeweler's Block Policy issued by Lloyd's which insured "against all risks of loss or damage" to any precious stones, jewels or jewelry belonging to Nissel or others who may have, in the course of business, entrusted such merchandise to him. In short, there is no dispute that the jewelry merchandise which had been stolen was the type of property which the Lloyd's policy was intended to cover.

However, the policy also provided that it would cover damage or loss "arising from any cause EXCEPT:

"....

"....

"(i) Loss or damage to property while in or upon any automobile ... unless, at the time the loss or damage occurs, there is actually in or upon such vehicle, the Assured [i.e., Nissel], or a permanent employee of the Assured, or a person whose sole duty it is to attend the vehicle. This exclusion shall not apply to property in the custody of a carrier mentioned in Section 3 of the SCHEDULE or in the custody of the Post Office department as first class registered mail." ⁵

The relevant portion of the SCHEDULE (Section 3(c)) provides:

"3. Limitations of Liability in respect of Property insured under item 2(a). ⁶ The maximum liability of the underwriters resulting from any one loss, disaster or casualty is limited to the following amounts in respect of:

"....

"....

"(c) Shipments in transit by customer parcel delivery service and the parcel transportation service of railroads, waterborne or air carriers and passenger bus lines (subject to the stipulations of Exclusion (e) of Condition 4) .......... NO LIABILITY."

Exclusion (e) of Condition 4 provides, in relevant part:

"Loss or damage [will be excluded when] occurring in course of transit to shipments by:

"(1) Mail unless registered first class;

"(2) Railroad, waterborne or air carriers unless under receipt of their passenger parcel transportation or baggage services; ....

"(3) Motor carriers or truckmen other than under receipt of

"(a) those operating exclusively as a customer parcel delivery service (including air thereof in accordance with its tariff);

"(b) the parcel transportation of baggage services of passenger bus lines."

In January of 1994, Nissel made a claim under his policy with Lloyds. After an investigation of the facts and circumstances of the loss, which included the taking of a recorded statement from Bolling on February 1, 1994, a review of the Hemet Police Department Report of December 17, 1993 and an interview with Alvin Cooper, Lloyds denied the claim. It did so on the ground that the exclusion in Condition 4(i) of the policy applied since the theft occurred from an unattended vehicle and the "custody of a carrier " exception to the exclusion did not apply. ⁷

On January 30, 1995, Nissel filed this action against Lloyd's. After certain law and motion proceedings, Nissel filed a First Amended Complaint on May 5, 1995. In this pleading, he alleged four causes of action: (1) breach of the implied covenant of good faith, (2) common law fraud, (3) negligent misrepresentation and (4) breach of contract. Lloyd's filed an answer which, inter alia, alleged the affirmative defense that there was no coverage under the policy due to the application of the "unattended" vehicle exclusion.

On February 7, 1996, Lloyd's filed a motion for summary judgment. The motion was heard on March 11, 1996, at which time the trial court determined that there was no material dispute as to the facts recited above and that, as a matter of law and policy construction, the term "carrier" as used in the exception to the unattended vehicle exclusion did not apply. Based on those conclusions, the court granted Lloyd's motion and entered judgment in its favor. Nissel filed this timely appeal.

ISSUES PRESENTED

The sole issue presented on appeal is whether the unattended vehicle exclusion applied to preclude coverage for Nissel's theft loss claim. The correctness of the trial court's conclusion on this question depends on whether (1) there was any unresolved or disputed issue of fact as to the "unattended" condition of Bolling's vehicle at the time of the theft, (2) the "carrier" exception can be applied to Bolling and (3) the policy provides liability coverage which is not subject to the aforesaid exclusion. Nissel would have us conclude that each of these questions should be answered in the affirmative. However, we agree with Lloyd's that the proper answer to each is "no." ⁸

DISCUSSION

1. Standard of Review

Summary judgment is granted when no triable issue exists as to any material fact and the moving party is entitled to judgment as a matter of law. Code Civ. Proc., § 437c, subd. (c); Villa v. McFerren (1995) 35 Cal.App.4th 733, 741, 41 Cal.Rptr.2d 719.) After examining documents supporting a summary judgment motion in the trial court, this court independently determines their effect as a matter of law. (Union Bank v. Superior Court (1995) 31 Cal.App.4th 573, 579, 37 Cal.Rptr.2d 653.) The moving party bears the burden of establishing, by declarations and evidence, a complete defense to plaintiff's action or the absence of an essential element of plaintiff's case. (Bacon v. Southern Cal. Edison Co. (1997) 53 Cal.App.4th 854, 858, 62 Cal.Rptr.2d 16; Westlye v. Look Sports, Inc. (1993) 17 Cal.App.4th 1715, 1726-1727, 22 Cal.Rptr.2d 781; Code Civ. Proc., § 437c, subd. (o).) The moving party must demonstrate that under no hypothesis is there a material factual issue requiring a trial. (Flowmaster, Inc. v. Superior Court (1993) 16 Cal.App.4th 1019, 1026, 20 Cal.Rptr.2d 666, clarified in Romero v. American President Lines, Ltd. (1995) 38 Cal.App.4th 1199, 1202-1203, 45 Cal.Rptr.2d 421.)

When the moving party makes that showing, the burden of proof shifts to the opposing party to show, by responsive separate statement and admissible evidence, that triable issues of fact exist. (Lorenzen-Hughes v. MacElhenny, Levy & Co. (1994) 24 Cal.App.4th 1684, 1688, 30 Cal.Rptr.2d 210; Code Civ. Proc., § 437c, subd. (o).) " '[An] issue of fact becomes one of law and loses its triable character if the undisputed facts leave no room for a reasonable difference of opinion. [Citation.]' [Citation.]" (Preach v. Monter Rainbow (1993) 12 Cal.App.4th 1441, 1450, 16 Cal.Rptr.2d 320.) The interpretation of a policy of insurance, which is the principal task presented to us by this appeal, is a question of law which we resolve de novo. (Waller v. Truck Ins. Exchange (1995) 11 Cal.4th 1, 18, 44 Cal.Rptr.2d 370, 900 P.2d 619.)

2. Relevant Principles of Insurance Policy Construction

In AIU Ins. Co. v. Superior Court (1990) 51 Cal.3d 807, 274 Cal.Rptr. 820, 799 P.2d 1253, the Supreme Court set forth the basic rules which must guide our interpretation of any...