Court Opinion

ID: 9797632
Source: CourtListenerOpinion
Date Created: 2023-08-31 04:26:33.823055+00
Date Added: 2024-06-11T08:57:41.342118
License: Public Domain

*486CHIN, J.
I respectfully dissent, for I cannot agree with the majority’s insurance coverage interpretation. The insurance policy at issue excludes from coverage jewelry stolen from a vehicle unless the insured was “ ‘actually in or upon such vehicle at the time of the theft.’’ ” (Maj. opn., ante, at p. 468, italics added.) The italicized language is unambiguous. It does not, as the majority insists, contemplate coverage when the insured or its representative is “in close proximity” to the vehicle or somewhere nearby at the time of the theft. Rather, the insurer’s use of the phrase “actually in or upon such vehicle” was deliberate. Jewelry invites theft. Jewelry in unattended vehicles especially invites theft. The intent of the exclusion of theft when the insured is not actually, literally, in or upon the car, is to ensure the actual presence of someone in or upon the car in order to avoid a theft. (Ruvelson, Inc. v. St. Paul Fire and Marine Ins. Co. (1951) 235 Minn. 243 [50 N.W.2d 629, 635] (Ruvelson).) Conversely, the absence of an actual presence in or upon the unoccupied vehicle offers the criminal the opportunity to steal. (Ibid.) Zurich did not insure against theft when the insured’s representative was nearby or close to the car, but only when he was actually in or upon the vehicle. Therefore, when Brian Callahan, who was in charge of the car containing the jewelry, exited the vehicle and left the engine running, he increased the risk of theft of the car and anything in it, including the jewelry. Under the insurance policy’s plain language, and the many interpretative principles that guide us in reviewing insurance coverage issues, the theft is excluded from coverage.
Jeweler’s block insurance was conceived by Lloyds of London at the turn of the previous century. (JMP Associates, Inc. v. St. Paul Fire & Marine Ins. Co. (1997) 345 Md. 630 [693 A.2d 832, fn.l].) The “all risk” insurance is different from other property or “named peril” insurance because the policy insures all risks of loss or damage to the jewelry subject to certain exclusions. The policy contains an exclusion for all jewelry theft as follows: “We will not pay for ‘loss’ caused by or resulting from any of the following: [][]... Theft from any vehicle unless you, an employee, or other person whose sole duty is to attend the vehicle are actually in or upon such vehicle at the time of the theft.” The exclusion and exception for thefts that occur when the employee is “actually in or upon [the insured’s] vehicle” has long been included in the policy. Although exceptions to exclusions are construed broadly in the insured’s favor, courts will not strain to create an ambiguity where none exists and unambiguous policy language controls. (Waller v. Truck Ins. Exchange (1995) 11 Cal.4th 1, 18 [44 Cal.Rptr.2d 370, 900 P.2d 619].)
Two California cases have considered a similar issue under comparable jeweler’s block policies. In Revest v. Excess Ins. Co. (1973) 30 Cal.App.3d 125 [106 Cal.Rptr. 166] (Revest) and Nissel v. Certain Underwriters at Lloyd’s of London (1998) 62 Cal.App.4th 1103 [73 Cal.Rptr.2d 174] {Nissel), the Courts of Appeal denied coverage for the theft of jewelry from a car *487because the subject vehicles containing the jewelry were parked and left unattended. In both cases, the courts found the “actually in or upon the vehicle” requirement unambiguous and concluded the drivers intended to abandon their vehicles temporarily either to get directions or engage in other business. The majority attempts to distinguish these cases on the ground that Callahan did not intend to abandon the vehicle or turn his attention away from it. Instead, he wanted to inspect it in order to determine the origin of a rattling noise, and had to exit the vehicle in order to conduct his inspection.
The majority places much emphasis on the fact that the court in Revesz, supra, 30 Cal.App.3d at pages 128-129, looked to the insured’s intent and conduct in determining whether the theft that occurred was after the insured salesman stopped to ask for directions. Revesz found' that by parking his car at the curb, locking the ignition, removing the keys, and leaving the vehicle to seek information, he had temporarily abandoned it. (Ibid.) In direct contrast to the majority, however, Revesz concluded that the requirement that the insured or its representative remain “actually in or upon the vehicle” was not ambiguous, and placed great emphasis on the word “actually” to find no coverage. (Ibid.) Indeed, Revesz specifically observed that temporary abandonment of the insured jewelry can occur when the employee is “not actually in or upon his vehicle” and “the thief is able to take possession of the vehicle and its contents without interference from him.” (Ibid.) Thus, although Revesz stated that the insured’s intent was relevant, it relied solely on the clear and explicit words of the policy, and not the insured’s intent, in finding no coverage.
Nissel, supra, 62 Cal.App.4th at page 1103, is also instructive. There, two thieves stole a bag containing diamonds and other items from the salesman’s vehicle. (Id. at p. 1106.) Similar to the policy at issue here, the jeweler’s block policy in Nissel excluded thefts from an automobile unless the insured (or its permanent employee) at the time of the loss was “actually in or upon such vehicle.” (Id. at p. 1107.) Although the insured made no claim that the policy exclusion was unclear or ambiguous, the court held that because the employee was not actually in or upon the vehicle when the theft occurred, the exclusion barred coverage. (Id. at p. 1114; see also Taff v. Atlas Assur. Co. (1943) 58 Cal.App.2d 696, 701 [137 P.2d 483] [“If he should not leave his jewelry in his unguarded car exposed to the hazards of theft, ... his coverage was complete; but he did choose so to leave it, he had got what he bought”].)
The majority of other state courts agree that the insured or its employee must actually, literally, be in or on the vehicle in order for the exception to apply. (See, e.g., American Stone Diamond, Inc. v. Lloyds of London (S.D.Tex. 1996) 934 F.Supp. 839, 843-844; see also Sphere Drake Ins. PLC v. Trisko (D.Minn. 1998) 24 F.Supp.2d 985, 992-996; Wideband Jewelry *488Corp. v. Sun Ins. Co. of New York, Inc. (1994) 210 A.D.2d 220 [619 N.Y.S.2d 339] [no coverage when employee six feet away from vehicle when theft occurred]; Greenberg v. Rhode Island Ins. Co. (1946) 188 Misc. 23 [66 N.Y.S.2d 457, 459] (Greenberg) [car parked on street while representative ate in restaurant].) As American Stone Diamond observed, “[c]ourts have consistently held nearly identical policy language to be unambiguous and, based upon such exclusions, have denied coverage to insureds who were not literally in or upon their vehicles at the time of the losses, even though the insureds may have been only a short distance away from the vehicle, watching the vehicle, or absent from the vehicle for only a short period of time.” (American Stone Diamond, supra, 934 F.Supp. at p. 843.) Even Revesz relied on the majority of state cases that place “great emphasis on the word ‘actually,’ indicating that it clearly negates constructive presence and possession.” (Revesz, supra, 30 Cal.App.3d at p. 129.)
The cases the majority relies on for support generally stand alone in their conclusion that the requirement that the insured or its representative be “actually in or upon such vehicle at the time of the theft” includes close proximity to the vehicle. (Lackow v. Insurance Co. of North America (1976) 52 A.D.2d 579 [382 N.Y.S.2d 529]; Star Diamond v. Underwriters at Lloyd’s, London (E.D.Va. 1997) 965 F.Supp. 763, 765.) Indeed as the Court of Appeal noted, neither of these cases has been followed in any other jurisdiction. In Lackow, the court found coverage under a similar policy when the insured’s employee was at the rear of the vehicle opening its trunk at the time of the theft. The court interpreted the “actually in or upon such vehicle” at the time of the loss to include coverage when the insured was close enough to the vehicle “to be able to observe a theft of the contents.” (Lackow, supra, 52 A.D. at p. 579.) In Star Diamond, the company president placed his knapsack full of diamonds on the floor behind the front seat of his car. After he stopped at a gas station, and when he was not more than nine inches from his car, the knapsack was stolen. (Star Diamond, supra, 965 F.Supp. at p. 764.) The policy excluded theft of the jewelry unless the insured was “in or upon the vehicle at the time of the loss.” (Id. at p. 765.) The court disregarded the policy’s clear meaning and broadened coverage beyond the policy’s scope to hold that the use of the disjunctive “or” between the words “in” or “upon” meant coverage was not conditioned solely on the insured being “actually in” the vehicle. In addition, the court concluded that the term “upon” should allow coverage when the insured exits the car to attend to the vehicle. (Id. at p. 767.) Under the clear and explicit policy language, this conclusion is questionable. As noted, no other jurisdiction has followed the case, even though our majority plans to do so.
Standard dictionary definitions also undermine the majority’s strained approach to insurance policy interpretation. As the Court of Appeal observed, *489“upon” is interchangeable with the word “on.” (See, e.g., Webster’s Collegiate Diet. (10th ed. 1995) p. 1298.) Whereas “on” can mean “in close proximity with,” as in “a village on the sea” or as a function word to mean “presence within,” as in “rode on a train” there is no definition of “on” or “upon” that includes in close proximity to a car. The majority’s hypothetical, in response to a comment made during oral argument involving an insured who carelessly leaves jewelry in one train compartment while walking to a different compartment, strains the policy’s application and ignores the standard rules of word usage and function.
In addition, as the Court of Appeal also noted, if we view the terms “on” or “upon” from a historical perspective, those words “logically and unambiguously apply to a horse or a horse-drawn carriage. One would be upon rather than in a horse or carriage. In modem times, the words ‘on’ or ‘upon’ would apply to a motorcycle. In the ordinary sense of the words,.whether one is ‘on’ or ‘upon’ a vehicle means the same thing; the usage varies with the object.”
The majority of courts agree that the insurer’s use of the word “actually” is also quite significant. Indeed, the courts adopting the majority view would agree that placing the word “actually” in the beginning of the policy’s exception to the exclusion to theft “belies any argument that the exclusion can be avoided when the insured is in close proximity to the car or is watching it.” In Greenberg, supra, 66 N.Y.S.2d at page 459, the court pointed out that, “Actual means that which exists in fact or reality, in contrast to that which is constructive, theoretical or speculative. [Citation.] [][] We must give due recognition to the use of the word ‘actually’ and must conclude it was inserted and intended for a definite purpose—to indicate the intention that presence in reality presence in fact was required and not a constructive or theoretical one.”
The majority also cites many rules of insurance policy interpretation to support its holding. They all favor the view that there is no coverage here. For example, the majority relies on the mle that an insurance policy is considered ambiguous only when it is susceptible to two or more constructions. (Waller v. Truck Ins. Exchange, supra, 11 Cal.4th at p. 18.) The phrase interpreted here, “actually in or upon such vehicle at the time of the theft,” is capable of one meaning only: The insured must be in or upon the vehicle when the theft occurs in order for coverage to apply. The rale is clearly stated by several courts that “[t]he [exclusion] was obviously intended to cover any situation where a loss occurred when the property was not protected by the presence of someone in or upon the car.” (Ruvelson, supra, 50 N.W.2d at p. 634; maj. opn., ante, at p. 470.)
The majority also acknowledges, but refuses to follow, the statutory mandate to interpret written contract terms under their “clear and explicit” *490meaning, and in their “ordinary and popular sense.” (Civ. Code, §§ 1644, 1638.) Under these rules, we must find that the jeweler’s block theft policy requirement that the insured party remain “actually in or upon the vehicle at the time of such theft” to mean what it says. There is no ambiguity here. To hold otherwise ignores the obvious intent of the specific and limited exception to the exclusion for theft, and potentially risks increased premiums for jewelry theft protection, a risk I cannot concede.
According to the clear and explicit words used in the jeweler’s block policy before us, the insurer reasonably decided that actual presence of the insured or its representative in the car would likely deter a thief, while the absence of an actual presence offers the thief an opportunity to steal. As one court noted, “opportunity makes the thief. If [the insured] had been in the automobile, probably the thief would not have entered.” (Princess Ring Co. v. Home Ins. Co. (1932) 52 R.I. 481 [161 A. 292, 293].) Long ago, insurance companies decided to insure against the theft of jewelry in vehicles only if the insured or its representative took basic precautions to guard against the theft. When the insured or its representative leaves the car for any reason, the risk of theft increases. That is what happened here. When Callahan left the car, with its engine running, to inspect a potential problem, he was not “actually in or upon such vehicle at the time of the theft” as the exception to the theft exclusion requires. He left the vehicle and its contents exposed to theft. The policy’s clear language excludes this theft from its coverage.
Brown, J., concurred.
Respondent’s petition for a rehearing was denied April 28, 2004. Kennard, J., Chin, J., and Brown, J., were of the opinion that the petition should be granted.