# FILED

November 8, 1995 Cecil Crowson, Jr. App ellate C ou rt Clerk IN THE COURT OF APPEALS OF TENNESSEE WESTERN SECTION AT JACKSON

_______________________________________________ THE WRIGHT JEWELERS, INC., Plaintiff, Vs. No. 02A01-940 9-CV-00202 Shelby Circuit No. 44751 FIREMAN'S FUND INSURANCE COMPANY d/b/a THE AMERICAN INSURANCE COMPANY, Defe nda nt.

_________________________________________________________________________

FROM THE CIRCUIT COURT OF TENNESSEE FOR THE THIRTI ETH

JU DIC IAL

DIS TR ICT AT MEM PH IS THE HONORABLE JANICE M. HOLDER, JUDGE

Sam L. Crain, Jr

. BURCH, PORTER & J OHNSON, Memphis,

For Plaintiff-Appellant Robert D. Flynn SPICER, NORCROS

S, FLYN N & RUDST

ROM, Memphis, For Defendant-Ap pellee

AFFIRMED Opinion filed:

W. FRANK CRAWFORD, PRESIDING JUDGE, W.S. CONCUR: ALAN E. HIGHERS, JUDGE2

PAUL G. SUMMERS, JUDGE This is a declarat

ory judg ment act

ion t o de termine coverage under an insurance po licy . Plai nt if f, W rig ht Je wele rs, Inc. , a pp ea ls from the order

of the trialcourt

denying its mot

ion for sum mary jud gment and granting summary judgment

to de fendant

, Firemen 's Fun d I nsurance Company, d/b/a The Americ an Insurance Com pany. By writ ten st ipulatio n of t

he part ies, t he undisput

ed fact s are as f

ollows: 1. Fireman's Fund Insurance Company, d/b/a The Amer i can Insu rance Comp any ("Fireman's Fund"), issued a "Jewelers

Block Policy" bearing No. 2-59-MJB 616 00 13 to Wright Jewelers w ith coverage dates of 11-1-90 t o 11-1-91. 2. In addition to t

he aforementioned policy issued by Fireman's

Fund, Wr

ight also had a separate poli cy of insurance captioned "SafeCo Prot ectio n Plan Busine ss Policy"bearing No. CP9021198A with coverage dat es of 11-1-90 to 11-1 -91 with SafeCo Insurance Company of Americ a ("SafeCo"). 3. The parties stipul ate to the authenticity a n d adm issibi li tyof the aforementioned p ol icie s of insurance. 4. At a ll relevant t

imes Bruc e Ha rrington was t he President

and a shareholder

of The Wright

Jewelers, Inc . ("Wright"). 5. At allrelevant

times Li bby Wright

("Ms. Wright

") was the Ge ner

al Man ager

of Wrig ht. 6. At all relevant times Holly Heine ("Ms. Heine") was the As sis tant M anag er of

Wrigh t. 7. At all relevant times Dorot hy Poole was employed by Wright

as an Appraiser. 8. At all re leva nt

ti me s Wri ght was engaged in t he business of selling jewelry, includi ng cons ignment sales of jewelry e ntrust

ed to it by

othe rs. 9. On July 17, 1991, Olivia Dowel l ("Mrs. Dowell ") took her eme ral d-c ut di amo nd ring to Wrigh t. 10. Mrs. Dowell told M s. Wright that she was interested3 in sell ing the ring and sh e wanted to have it valu ed for that purpose. 11. Mrs. Dowel l l eft th e rin g with Wright , and she authorized Ms. Wright to t ake the ri ng to N ew Y ork C ity so she could show it to dealers there. 12. The ring was taken t o Wright byMrs. Dowel l for

the express p urpose o f being sold. 13

. Ms. Wright

took t he ring to New York, where she showed it

to Greg Herdemian ("Mr. Herdemian"), who was th e Ma nger of Emp ire Diamon d Corporation ("Empire"). 14. Empire is a jewelry me rchan t wh ich deal s in jewelryof the kind shown t o Mr. Herdemian b yMs. Wrigh t, and Empire is in the b usiness of sell ing jewel ry, including jewelrydeli vered to it for consignment sale. 15. Mr. He rde mia n t

old Ms. W rig ht

th at Emp ire wou ld purchase the ring out right for a c ash pr ice of $50,000.0

0 or take t

he ring on a consignment basis and try t o sell it for $60,000.0

0. 16. Mr. Herdemian gave Ms. Wright his business card on the back of which he wrot e the price for

which he wou ld try to sell the ring i f Empire took it on consignment

($6 0,000 .00)and th e ca sh price for wh ich Empire would purchase the ring outright ($50,000.00). 17. A true, accurat e and authentic co py of Mr

. Herdemian's busi ness card is att ached t

o the se stipulations

and is adm itted into evidence in pl ace of the original without further proof. 18. After showing t he ring to Mr. Herdemian, Ms. Wright returned to Memphis with the ring. 19. After

obt aining Mrs. Dowel's permission to attempt to sell the ring, Ms. Wright sen t the rin g to Mr. Herdemian at Empire via Loomis with a packing sl ip to which Ms. Wright

affixed the business card containing the price range Mr. Herdemian had given Ms. Wrig h t on the ring. 20. Mr. Herdemian received the ring and the business card, and he con side red Empire's receipt of the ring to be Empire's permission to sell the ring within the price ran ge cont

ained on his busine ss card. 21. Both Wright and Emp ire imp lici tly understood tha t4 Empire had authori tyto sell the ring on behalf of t he Do wells within the price rang e e arl ier quoted by Empire. 22. Ms. Hein e, an emp lo yee a nd a gen t of Wrig ht, called Empire t

o confi rm the p roposed sales price for the ring. 23. Following del ivery of t he ring to Empir

e for purposes

of sale, Ms. He ine , a ct ing fo r a nd o n b eha lf of Wrig ht, confirmed wit h Jack D owell ("Mr. Do well") that Wright and Empire had permission to sell the ring. 24. Mr. Dowel l, by t

elephone con versat

ion wit h Ms. Heine in approxim ately A u gus t, 19 91 , e xp res

sly con fir me d on ce again that Wright and Empire had Mrs. Dowell 's permission to sell the ring. 25. Ms. Heine, acting upon the verbal permission and authorization of Mr. Dowell, told Empire that Wrig ht's clients had given Wright permission to sell the ring. 26. At all relevant times Mr. Dowell w as acting as the authorized agent

of his wife, Mrs. Dowell, and he had the au thorit

y to communicat

e with Wright

on Mrs. Dowell' s behalf. 27. Empire w as expressly authorized by Mrs. Dowell , through Wright, t

o sell the ring. 28. Mr. Herdemian, acting in his capacit y as Empire's Manager, the re after sold the ring at retail to an ind iv idu al. 29. The rin g was sold byEmpire for its actua l fair market value. 30. The actual faire market value o f the r ing of [sic] the time and place of sale was be tween $ 45,000.00 and $52,000.0

0. 31. Empire sold the ring with the exp ress consent and permission of Ms. Dowel l and w ith the knowled ge of Wrigh t. 32. Both prior a nd s

ubs equ ent to the sal e of th e rin g Wr ight t old the Dowells that it would reduce the commission that

it would earn on Empire's sal e of the ring b e cause the Dowells were apparently unhappy with the prog ress or result of the t ransaction. 33. Ms. Heine, on behalf of Wr ight, in formed M r.5 Dowell of Wrights' reduction in it s sales commis

sion. 34. Sh or tly after Empire sold the ri ng to th e i ndivi dua l, Ms. Heine telephone Mr. Herdemian and told him that Wrig ht's clien t had changed her mind and did not want to sell the ring; Ms. Heine asked Mr. H erdemia n to t ry to get the ring back. 35. Mr. Herdemian contacted t he individual to see if he would ret

urn th e ring, but t

he individu al refused. 36. When Ms. Wright sent the ring t

o Empire, and whi le Empire had the ring on consignmen t, Mrs. Dowell w as the owner of t

he ring. 37. At all rel evant t

imes Empire had possession of the ring on a consig nment ba sis. 38. N eithe r Empire no r Mr. Herde mian received a n y compensation, in the for m of a commi ssion or other wis e, fr om Wrigh t. 39. Subsequent to the sale of the r in g by Empire, Wrig ht inv oiced Empire for the port ion of the sales price to be remi tted to Wright ($50,000.00). 40. A true, accurat e and authentic co py of t h e invoice dated 10/1/91 from Wright to Mr. Irving Brod of Emp ire is att

ached to t

hese Stipulations an d i s admitted into evidence in place of t he origin alwitho ut further proof

. 41. On or about October 1, 1991, Empire r em itted to Wright the sum of $50,0

00.00. 42. The ring was

not da mag ed b y eith er Wri ght o r Empire. 43. The ring was not misplaced or mis laid by either Wright or Empire. 44. At all relevant

times Em pire was not a com mission salesman or sell ing agent on th e p ay ro ll or in t he direct or in dir ect e mpl oy of Wrigh t. 45. Wright

's policy of i nsura nce with Fireman's Fund provides for a deductible of $1,0 00.00. 46. After Mr. and Mrs. Dowell filed suit agai nst Wri ght, Wright sent written demand to Fi rem an's Fund and SafeCo request

ing t hat e ach p rovide Wright with a def ens e to, an d co vera ge fo r, the la wsu it.6 47. Both Firem an 's Fund and SafeCo denied coverage and refused to provide Wright with a defense. 48. Wrig ht fi led thi s decl aratory judgmen t action against Fireman's Fund and SafeCo seekin g a ruling from the court

that either or bo th insurance c ompanies

were obligated to prov ide Wright with a defense and with coverage for any judgment ent ered agai nst Wri ght in the un derly ing la wsu it. 49. Both companies filed ans wer s de nyin g the d utyto defend Wright

or provide it

with coverage under t heir respect ive policies

. 50. W rig ht

ultimat ely s et tle d wit h Sa feC o fo r a lu mp sum payment from SafeCo of $5, 000.00. 51. SafeCo prep ared, and Wright executed, a document

entitled "Full Rel ease and Settlement of All Claim s" ("Rele ase"). 52. A true, acc ura te and authe ntic copy of th e Re lease is atta ched to these st ipulations and is admitted into evidence without furt her proof. Wrig ht's complaint seeks a declaratory judgment t hat Firem en's Fund is lia ble for

the am oun t of any jud gme nt obtai ned by the Dowel ls agai nst Wri ght. Wright also all eges that

the policy required Firemen's Fund to provide Wrig ht a defen se to t

he Dowell suit and that since Fireman's refused to p rovi de a def ens e, Fireman's is required to reimburse Wright to t he costs incurred in defending the su it. Wrig ht re lies upon t he following po licy provisions: JEWELERS' BLOCK POLICY FORM - CM 00 59 08 83 Commercial I nland Marine Coverage Form Part C - Property Insured The Pro pert

y Insured Is As Follows: 1. Pearls, precious and semi-pr e cious st

ones, jewels, jewel ry, watche s and wat ch movement

s, gold, silver, plat inu m, othe r precio us

metals, and alloys and other stock usual to the co nduct of t he Insured's busin ess, owned by t

he Insured; 2. Property a s described above delivered or entrusted7 to the Insur

ed by ot

hers who a re not

dealers in such property o r otherwise engaged in t he jewelry trade;

* * * Part E - Insuring Conditions 1. This policy insures against all risks of loss of or damage to the above described property arising from any cause wh a tsoever except: [No exceptions are applic able.]

* * * 6. In the event of loss of or damage to property of others held by t

he Insured for

which claim is made upon the Co mpa ny, the righ t to adj ust s uch l oss or damage with the o wner or owners of the proper ty is reserved to t

he Compan y and t

he receipt

of such owner or owners in satisfact ion thereof shal l be in fu ll satisfaction of any claim of the Insured for which such payment

has bee n ma de. I f legal proceedings be taken t o enforce a claim against the Insured as re spec ts any such loss for damage, the Company reserves the right

at it s option wit

hout expense t

o the Insured, to co nduct a nd co nt ro l th e de fe nse on be ha lf of and in t

he name of

the Insured. No act ion o f th e Companyin suc h r

eg ar d sh allincrease the l iabili ty of the Company under

this p olicy; no r increas e the l im its of liabil ity specified in the policy. Wright Jewel ers, rel ying upon the definitio n of loss approved in R.T.E. Corp.

v. Maryland Cas. Co. , 247 N.W.2d 171 (Wisc. 1976), assert s that the ring was "placed beyond recover y,"and, therefore, is lost. Wright argues that

"[t]he ring

was entr usted t o plaint iff by the D owells, and plaintiff, in t urn, entrust

ed the ring to Empire on their behalf . The ring cannot be rec ov ered byplaintif f, and, there fore, it is lost." We do no t disagree t hat t he ring was placed beyond Wright's recovery wh en Empire sold the ring to a buyer in t he ordinary course of busine ss. Se e T.C.A. § 47-2-403(2) (19 92)("Any entru stin g of p oss

ession o f good s to a merchant who deals in goods of that kind gives him power to t ransfer all rights of the entru ste r

to a bu yer in the ordinary course of business"). However, Wright is8

overlooking the uncont roverted proof

by stipulation t

hat "Empire sold the ring with the express consent and permission of Ms. Dowel l a nd w ith the knowledge of Wright." (Emphasis add ed.). The policy provision insures "against all risks of loss of . . . t he above described proper

ty .

. . . " T

hus, giving the language it s usual and ordinary meaning, the policy provides coverage for l ost property. Black's Law Dictionary (6th ed. 1979) defines "l ost" as:

An article is

"los t" wh en the owner has lost t he possession or custody of it involuntarily and by any means, but more p a rticularly b y acc ident or his own n egligence or forget

fulness, and when he is ignorant of its w her eabo uts or cannot recover it by an o rdinary diligent search. The same dict

ionary also defines

"lost pr opert y" as: Prope rty which the owner has involuntarily part ed with and does not knowwhere to find or re cover it, not including propert

ywhich h e h as int ent io na lly concealed or depo sited i n a secret place for safekeeping. Dist

ing uis ha ble from mislaid pro pert y which has been deliberately placed somew here and forgott en. The p olicy in this case provid es the insured payment for los t property, which is generally understood to be propert y wh ich has

been parte d w ith involuntar

il y. Therefore, in our opi nion, the volun tary conveyance and sale of the ring do not const itute a "loss" under the polic y in que stion . I t is d iffi cul t to conceive of an i nsurance p olicywhich would include wit hin th e definit

ion of lost property, property that is voluntaril y conveyed by the ow ner, thereby p lacing the property beyond the owner' s recovery. To allow an insured t o claim a loss whenever

insured pr

opert y is "placed b eyond re co very, " w ithou t rega rd to whether the insured acted vo luntarily, could al low an insured a recovery in a number of fr

audul ent or potentially fra udul ent situations. In the absence of fra ud or mistake, a cont ract must be int

erpreted and9

enforced as written, and in con struing the contract, th e words expressing the part ies'intentio n should be given their usual, natural and ordinar y meani ng. Ballard v. North American Life & Cas. , 667S.W.2d 79 (Tenn. App. 1983). Giving the words used in the contract before us their or

dinary and usual meaning, we find that it was the intention of t he part ies th at t he insura nce policy

would cover lost prop erty. The p rope rty in this c ase was not l os

t, bu t w

as vo lunt

ar ily conveyed. Wright also argues

that Fireman's Fund is o bligated by the po licy provisions to defend the action fil ed by the Dowel ls. We must respect fully disagree. There is no contract provision requ iring Firem an's Fund to defe nd. The po licy clea rly and un ambiguo usly stat es tha t Fir

eman's Fund h as th e opt ion t o defend; therefore, this argum ent is without merit. The ord er of

the tri al cou rt gra nting sum mar y jud gme nt is a ffirme d. Co sts of the appe al are a sse sse d ag ain st the a ppel la nt.

____________________________________ W. FRANK CRAWFORD, PRESIDING JUDGE, W.S. CONCUR:

_________________________________ ALAN E. HIGHERS, JUDGE

_________________________________ PAUL G. SUMMERS, JUDGE