Opinion ID: 2217846
Heading Depth: 1
Heading Rank: 1

Heading: Interpretation of Exclusion Clause of Policy.

Text: Sec. 2 (b) of the policy provides: This policy does not apply: (b) to loss, or to that part of any loss, as the case may be, the proof of which, either as to its factual existence or as to its amount, is dependent upon an inventory computation or a profit-and-loss computation; provided, however, that this paragraph shall not apply to loss of money, securities, or other property which the insured can prove, through evidence wholly apart from such computations, is sustained by the insured through any fraudulent or dishonest act or acts committed by any one or more of the employees; . . . In interpreting this clause we consider that sec. 6 of General Agreements of the policy is relevant. This section provides: The insured shall keep records of all the insured property in such manner that the [Travelers Indemnity] company can accurately determine therefrom the amount of loss. The portion of sec. 2 (b) which poses the problem of interpretation is the proviso which follows the semicolon and limits the operation of the absolute prohibition against use of inventory computations preceding the semicolon. This provisio may be interpreted two ways as applied to the facts of the instant case: (1) The words as to its amount appearing in the absolute prohibition preceding the semicolon carry over into the proviso and prohibit use of inventory computations to prove the amount of plaintiff's loss even though plaintiff has established by independent evidence that Woodward did steal plaintiff's parts and accessories during the period of his employment; or (2) once plaintiff has proved by independent evidence that Woodward did steal parts and accessories during the period of his employment, the prohibition against use of inventory computations in that portion of the paragraph preceding the semicolon is rendered inoperative. If the first interpretation were to be adopted, the proviso after the semicolon would serve no useful purpose because if the insured was able to prove its loss by evidence wholly apart from computations made from its inventory records, then such computations would be merely cumulative evidence of the loss. This would appear to be an absurd result especially in view of sec. 6 which requires insured to keep accurate records. We deem the wording of the proviso sufficiently ambiguous to render applicable the rule that in case of ambiguity or reasonable doubt as to the meaning of exclusion clauses in a policy, drafted by an insurance company, the ambiguity is to be resolved against the insurer. Meiser v. Aetna Casualty & Surety Co. (1959), 8 Wis. (2d) 233, 238, 98 N. W. (2d) 919, and Northland Bottling Co. v. Farmers Mut. Automobile Ins. Co. (1958), 3 Wis. (2d) 326, 329, 88 N. W. (2d) 363. Therefore, we adopt the second interpretation and hold that inventory computations, which would tend to prove the amount of plaintiff's loss, would not be excludable under the terms of the policy where independent evidence first showed that Woodward had stolen items of plaintiff's parts and accessories during the period of his employment.