Opinion ID: 28174
Heading Depth: 1
Heading Rank: 2

Heading: primary coverage and the parkans loss

Text: 6 The crime coverage at issue under the primary policy provides: 7 We will pay for loss involving Covered Instruments resulting directly from the Covered Causes of Loss. 8 1. Covered Instruments : Checks, drafts, promissory notes, or similar written promises, orders or directions to pay a sum certain in money that are: 9 a. Made or drawn by or drawn upon [the insured]; 10 b. Made or drawn by one acting as [the insured's] agent; 11 or that are purported to have been so made or drawn. 12 2. Covered Causes Of Loss : Forgery or alteration of, on or in a Covered Instrument. 13 Finding coverage under the foregoing provisions, the district court determined on summary judgment that Adusa obtained payment on the letter of credit by presenting forged documents to Wells Fargo, including forged certificates and a forged bill of lading. This court reviews de novo the trial court's decision on summary judgment. Mid-Continent Cas. Co. v. Chevron Pipe Line Co., 205 F.3d 222, 225 (5th Cir.2000). 1 14 The summary judgment evidence establishes that the irrevocable letter of credit was payable at sight upon the presentation of certain documents, namely, a commercial invoice, a packing list, a certificate of weight, a quality and weight certificate from a qualified surveying firm, on board bills of lading issued to the order of Marine Midland by the shipper, and Adusa's signed statement certifying that one set of non-negotiable documents was sent by courier to Parkans immediately after shipment. Adusa presented documents purporting to be those documents required by the letter of credit, most on its own letterhead, with an inspection quality and weight certificate ostensibly from Alfred H. Knight (a surveying firm) and bills of lading ostensibly from Crowley American Transport (a shipping company), although all the documents were fraudulent. 15 Zurich contends that even if forgeries occurred, they were not covered because they were not forgeries of covered instruments. To be a covered instrument, a document must be a check, draft, promissory note, or similar written promise, order or direction to pay Made or drawn by or drawn upon [Parkans]; Made or drawn by one acting as [Parkans'] agent; or [] purported to have been so made or drawn. Even if we view the letter of credit as a similar ... promise[] to pay, it cannot be a covered instrument because it was neither made by, drawn by, or drawn upon Parkans or its agent, nor purported to have been so made or drawn. 16 The district court recognized that Parkans may not have been the `technical' drawee in the transaction, but treated Parkans as such simply because it was the party who ultimately suffered the loss. The district court quoted from and embraced the reasoning of Omnisource v. CNA, 949 F.Supp. 681, 690 (N.D.Ind.1996), which held Omnisource to be the drawee [i]n the sense of `to draw' as to withdraw, to call on funds, or to get from a source. Omnisource quoted from Black's Law Dictionary, American Heritage Dictionary and Webster's New Universal Unabridged Dictionary, in order to define drawee. 17 A contextual analysis of the contract is the proper approach to determine the meaning of contractual terms. See Gulf Metals Indus., Inc. v. Chicago Ins. Co., 993 S.W.2d 800, 805-06 (Tex.App.-Austin 1999, pet. denied). The policy uses the term drawn in the context of the specific listed instruments and similar ... promises, orders, or directions to pay. In the commercial paper context the phrases drawn by and drawn upon are not ambiguous and have a definite legal meaning. A contract term that can be given a definite or certain legal meaning is not ambiguous. National Union Fire Ins. Co. v. CBI Indus., Inc., 907 S.W.2d 517, 520 (Tex.1995). We will not therefore interpose multiple dictionary usages. 18 The letter of credit itself identifies the drawee as the Advising Bank, i.e., Marine Midland and not Parkans. Neither the letter of credit nor any of the fraudulent documents presented by Adusa were made or drawn by or drawn upon Parkans. Nor were any of those documents made or drawn by or drawn upon one acting as Parkans' agent. In the letter of credit transaction, Marine Midland acted as principal for itself not as agent for Parkans. See Republic Nat'l Bank v. Northwest Nat'l Bank, 578 S.W.2d 109, 114 (Tex. 1978). Finally, none of the documents were purported to have been ... made or drawn by or drawn upon Parkans within the meaning of the policy. The remaining documents were all ostensibly made by Adusa or legitimate enterprises, not Parkans. Adusa's direction to Wells Fargo to pay via wire transfer, even if we consider it a forgery, was not drawn upon Parkans. Accordingly, none of the documents in this case are covered instruments. We therefore reverse the partial summary judgment in favor of Parkans and render judgment for Zurich, finding no coverage under the primary policy.