Court Opinion

ID: 9001974
Source: CourtListenerOpinion
Date Created: 2022-11-27 13:14:38.140296+00
Date Added: 2024-06-11T17:11:13.046740
License: Public Domain

MCLAUGHLIN, Circuit Judge, .
dissenting:
We are unanimous that the central question in this case is whether the diamonds were lost while in the “close personal custody and control” of Danilin. The majority concludes that the loss occurred “when the salesman walked out of the diner door;” and because he was obviously no longer in close personal custody and control of the diamonds at that point, there is no insurance coverage. In my view the loss occurred when Danilin left his table at the diner, a point when he was still in close personal custody and control of the diamonds, and thus there is coverage.
As the majority concedes, the phrase “close personal custody and control” is capable of more than one interpretation, and thus must be construed against the Underwriters, who drafted the policy. See, e.g., United States Fidelity & Guarantee Trust Co. v. Annunziata, 67 N.Y.2d 229, 232, 501 N.Y.S.2d 790, 791, 492 N.E.2d 1206, 1207 (1986). Applying this rule of contract interpretation, the majority reasons that Danilin relinquished “close personal custody and control” of the diamonds when he walked out of the diner, and concludes that the diamonds were lost at this time. I do not question the majority’s reading of the phrase “close personal custody and control.” I do, however, believe that it is just as reasonable to conclude that Danilin “lost” the diamonds the moment he left his table at the diner. Thus, because he was in close personal custody and control of the diamonds at that time, there is coverage. To hold that there was no loss until Danilin actually left the diner is to interpret the policy in a light most favorable to the Underwriters, and to ignore an equally reasonable interpretation that favors the plaintiff. Therefore, I respectfully dissent.
The common law distinguished between “lost” property and “mislaid” property. A chattel was “lost” when the owner involuntarily parted with possession of it. Foulke v. New York Consolidated R.R. Co., 228 N.Y. 269, 274, 127 N.E. 237, 238-39 (1920). Property was “mislaid” when the owner purposely parted with possession of an object, but then forgot to take the object with him. See Cohen v. Manufacturers Safe Deposit Co., 297 N.Y. 266, 269, 78 N.E.2d 604, 606 (1948). The majority correctly points out that common law would regard the diamonds as mislaid, because Danilin intentionally left them on a chair adjacent to his table, and then forgot to take them when he finished his dinner.
I am baffled, however, as to why the majority painstakingly analyzes whether the diamonds were “lost” or “mislaid.” *916Quite apart from the fact that the distinction has been statutorily abolished in New York, see N.Y.Pers.Prop.L. § 251, a close examination of the majority opinion reveals that the lost-mislaid distinction has little bearing upon the majority’s interpretation of the policy.
The majority states that the diamonds were mislaid, and that under New York law an owner parts with “custody” when property is mislaid. According to the majority, then, the moment Danilin mislaid the diamonds in the diner, they were no longer in his “close personal custody and control,” and thus there is no coverage under the policy. However, the majority does not take its argument to its logical conclusion. The majority notes that the custody of property also shifts when a chattel is “lost.” Therefore, under the majority’s interpretation, even if the diamonds were “lost” in the diner (e.g., if they fell through a hole in Danilin’s pocket while he sat at the table), Danilin would no longer have custody of the diamonds at the time of the loss (i.e. when he exited the diner), and the diamonds would be uninsured. Thus, the majority’s interpretation precludes coverage regardless of whether the diamonds are “lost” or “mislaid.” This is an overly restrictive reading of an admittedly ambiguous policy, and, I believe, contravenes the principle that ambiguities must be resolved against the Underwriters, who drafted the policy.
According to the Oxford English Dictionary, a “loss” is “the being deprived of, or the failure to keep [ ] a possession, appurtenance, right, quality, faculty, or the like [].” 9 The Oxford English Dictionary 37 (2d ed. 1989). Similarly, Black’s Law Dictionary defines a “loss” as “the act of losing,” and defines “lose” as “... to part with, especially in an accidental or unforeseen manner.” Black’s Law Dictionary 851 (5th ed. 1979). Thus, a “loss” occurred when Danilin inadvertently left the table without the diamonds, and at that point he was still in “close personal custody and control” of the diamonds. Accordingly, the diamonds should be covered under the policy.
In the final analysis, the gulf that divides us is, not the lost-mislaid distinction, nor even the close personal custody and control concept, but the question: when did the loss (for insurance purposes) occur? The majority appears to settle upon the moment Danilin left the diner. I believe there was a loss when Danilin left the diner table, regardless of when the subsequent theft occurred or, indeed, even if there was no theft. At the very least, the question is arguable and thus should be resolved in favor of the insured who had no hand in the drafting of the insurance policy.1
Lurking in the majority’s opinion seems to be the implication that the loss is not covered because Danilin casually left the diamonds on an adjoining chair while the family had dinner. The Underwriters may, indeed, have intended to deny coverage unless Danilin kept the diamonds on his person at all times'. Certainly, such an intention would not be unreasonable given the great value of the diamonds. However, the policy does not state this intention. Moreover, as the district court noted, other parts of the policy do list specific requirements for coverage. See Saritejdiam, Inc. v. Excess Insurance, 778 F.Supp. 148, 152 (S.D.N.Y.1991).
Because the policy must be construed against the Underwriters, and because I believe that a “loss” occurred when Danilin surrendered “close personal custody and control,” I would affirm the judgment of the district court, and hold the Underwriters liable on the policy.
I respectfully dissent.

, Curiously, the majority acknowledges that the closest New York case on point is contrary to the majority result. See Viviano v. Jewelers Mut. Ins. Co., 115 Misc.2d 518, 454 N.Y.S.2d 404 (Dist.Ct.Nassau County 1982). While citing the case, the majority makes no attempt to distinguish it.