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

Heading: Indemnification Claim Against EU

Text: 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.