Opinion ID: 26691
Heading Depth: 4
Heading Rank: 1

Heading: Exclusion “e”

Text: Exclusion “e” states that the CrimeGuard policy does not cover “loss or damage resulting from dissolution arising out of the giving or surrendering of assets in any exchange or purchase.” None contest that 7-Eleven’s loss resulted from a dissolution —— a theft committed by a non-employee (Alfares). The parties disagree, however, about whether the dissolution can be said to have arisen out of the giving or surrendering of assets “in any exchange or purchase.” The policy itself does not define these terms. 7- 8 Eleven contends that we should construe the terms “exchange or purchase” as referring to a transaction in which title to an asset is transferred in exchange for (1) money (a purchase) or (2) other property (an exchange). In support of its position, 7-Eleven points to the common usage of these terms, particularly the definitions given in Black’s Law Dictionary. 7-Eleven argues further that, because both the Money Order Agreement between Amex and 7-Eleven and the Money Order Amendment between 7-Eleven and Alfares emphasize that neither 7- Eleven nor Alfares would acquire title to the money orders, 7- Eleven’s entrusting custody of the money orders to Alfares could not have been exchanges or purchases within the contemplation of Exclusion “e.” Thus, reasons 7-Eleven, the dissolution cannot be said to have arisen out of the giving or surrendering of assets “in any exchange or purchase.” National Union first counters by emphasizing that Exclusion “e” refers to any exchange or purchase, and that there was an exchange sufficient to bring the transaction within the exclusion by virtue of the exchange of the money orders for the sales services provided by Alfares and the fees he was obligated to pay after each sale. National Union urges further that because the agreement between Amex and 7-Eleven is entitled “Money Order Trust Agreement” and creates a “trust relationship” between the parties, 7-Eleven did in fact —— under basic principles of Texas trust law —— acquire legal title to the money orders, which it held for the 9 benefit of Amex. For Rule 12(b)(6) purposes, National Union’s construction of this exclusion is not reasonable; on the contrary, we agree with 7- Eleven that there was no “exchange or purchase” (as those terms are normally used conjointly) of the money orders. We must, therefore, reverse the district court’s dismissal of 7-Eleven’s claim insofar as that Rule 12(b)(6) ruling is premised on a holding that Exclusion “e” prevents 7-Eleven’s recovery under the CrimeGuard policy.