Opinion ID: 765488
Heading Depth: 3
Heading Rank: 1

Heading: The Aetna Policy

Text: 10 On or about February 19, 1976, Aetna issued to PEC-NJ a Comprehensive Dishonesty, Disappearance, and Destruction Policy (the Aetna Policy). The policy was amended to make it noncancellable unless PEC failed to pay the premiums. Aetna attempted to cancel the policy on May 2, 1980. PEC brought an action in federal district court for an injunction preventing Aetna from canceling the policy. The district court ordered the relief sought and this Court affirmed. See Payroll Express Corp. v. Aetna Cas. & Sur. Co., 659 F.2d 285 (2d Cir. 1981). PEC-NY was added to the policy effective June 22, 1988. 11 The Preamble and Insuring Agreement I of the Aetna Policy provide in pertinent part: The Company . . . agrees with the Insured . . . to pay the Insured for: . . . Loss of Money, Securities, and other property which the Insured shall sustain . . . through any fraudulent or dishonest act or acts committed by any of the Employees, acting alone or in collusion with others. Section 3 of the Conditions and Limitations portion of the Aetna Policy defines employee as: 12 any natural person (except a director or trustee of the Insured, if a corporation, who is not also an officer or employee thereof in some other capacity) while in the regular service of the Insured in the ordinary course of the Insured's business during the Policy Period and whom the Insured compensates by salary, wages or commissions and has the right to govern and direct in the performance of such service. 13 Endorsement 28 of the Aetna Policy excludes PEC's President Robert Felzenberg from this definition of employee. Section 2(a) of the Exclusions segment of the Aetna Policy states that the policy does not apply to loss due to any fraudulent, dishonest or criminal act by any Insured or a partner therein, whether acting alone or in collusion with others.