Opinion ID: 201603
Heading Depth: 2
Heading Rank: 3

Heading: Barquet's Third-Party Claims Against Its Insurers

Text: 50 Barquet contends that the district court erred in granting Integrand summary judgment on Barquet's claim that Integrand, Barquet's commercial liability insurer, had a duty to defend Barquet against the lawsuit brought by the co-plaintiff jewelers (Astoria, Shah, and Eclipse) and their insurers. Barquet has not appealed the district court's finding that Integrand need not pay to indemnify Barquet for its liability in this underlying action; Barquet commendably admits, in fact, that the depositum contract theory that the district court used to grant relief falls under a policy exemption because it presupposes that the lost jewelry was under Barquet's care, custody, or control when taken. 51 Under Puerto Rico law, the duty to defend is measured by the allegations in a plaintiff's complaint — if any of these allegations, read liberally, state facts that would be covered by a liability policy if proven true, then the insurer must provide a defense for the insured defendant. See, e.g., Martinez Perez v. Universidad Central de Bayamon, Inc., 143 P.R. Dec. 554, 562, 1997 WL 394355 (1997) (Official Translation); Pagán Caraballo v. Silva Delgado, 122 P.R. Offic. Trans. 98, 102-03, 1988 WL 580770 (1988). 52 Barquet argues that, aside from the depositum contract claim, the complaint of the co-plaintiff jewelers and their insurers also alleges a separate claim of tort-law negligence. The complaint cannot reasonably be read this way. The co-plaintiffs were only seeking relief on a depositum contract theory. The references to negligence are located within the complaint's discussion of this contract count, and are intended merely as references to the standard of care under a depositum contract. Barquet briefly argues that we can go beyond the allegations in the complaint to look at extrinsic evidence in determining whether Integrand had a duty to defend. Puerto Rico has never adopted such an approach. See, e.g., Martinez Perez, 143 P.R. Dec. at 562 ([I]f the allegations clearly exclude the damages claimed from the coverage of the policy, the duty to defend cannot be imposed upon the insurance company.) The district court's ruling that Integrand had no duty to defend was correct.
53 Barquet argues that, under the terms of its jeweler's block policy, EU must indemnify Barquet for its liability to the co-plaintiff jewelers and their insurers, and the district court erred in holding to the contrary. Barquet is incorrect. Puerto Rico law instructs us to read insurance contracts in accordance with their plain meaning, as a whole, and in harmony with the general purposes of the policy; moreover, we are instructed to read exclusionary clauses strictly and only enforce them where their applicability to the case at hand is clear. See, e.g., Quiñones López v. Manzano Pozas, 141 P.R. Dec. 139, 1996 WL 499244 (1996) (Official Translation); Pagán Caraballo, 122 P.R. Offic. Trans. at 101. 54 Coverage exists, according to the policy schedule, only for losses or damage to Barquet's Stock (including other people's goods). We need not determine whether the jewelry at issue here comes within the meaning of this clause. 55 Even assuming arguendo that it does, coverage is barred by the Locked Showcase Warranty. This provision makes it a condition precedent to liability, in respect to loss by Theft, that whilst the premises are open for business, all showcases, safes and cupboards containing Stock, and the rear of all display windows be locked and keys removed therefrom. It is undisputed that the vault where the lost jewelry bags were placed was always open and unlocked during business hours. Barquet argues that there is no evidence the jewelry was lost by theft, but under the circumstances no reasonable jury could come to any other conclusion. Moreover, Barquet contends that the jewelry lost is not covered by the Locked Showcase Warranty because it is not stock. This argument leads nowhere because, under the policy schedule, only goods considered stock are covered by this policy at all. The reference to other people's goods modifies stock and does not stand on its own: only other people's goods that constitute stock are covered. 56 We expressly decline, as unnecessary, to rely on the last ground stated by the district court, the EU policy exemption for stock taking losses, unexplained shortages and mysterious disappearances.