440 F. App'x 759
11th Cir.2011Background
- Mitchell Company appeals a grant of summary judgment for Hartford in the district court.
- Policy is a Crime SHIELD for Mercantile Entities insuring against losses from theft by an employee, including unidentifiable theft.
- Facts involve Joseph Campus, a long-time Mitchell employee who engaged in self-dealing by recommending purchases of properties he owned or with James Young and receiving proceeds.
- Mitchell Company sought coverage for money actually paid and lost due to Campus’s actions, arguing theft triggered coverage.
- Court held Campus’s conduct did not amount to theft because Mitchell did not lose money; it received a property purchased at the agreed price; policy terms interpreted under Alabama contract law; policy unambiguous and enforced as written.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the policy cover self-dealing as theft? | Mitchell argues theft occurred as funds were unlawfully taken. | Hartford contends no theft occurred since Mitchell received the property at the agreed price. | No, self-dealing does not equal theft under the policy. |
| Did Mitchell suffer a loss of money due to Campus’s actions? | Mitchell paid money that it would not have paid but for Campus’s fraud. | Mitchell did not lose money; it acquired property for a defined price. | Mitchell did not lose money; there was no theft triggering coverage. |
| How should the policy be interpreted under Alabama contract law? | Policy should be interpreted to cover losses caused by dishonest acts. | Policy terms are unambiguous and must be enforced as written. | Policy interpreted as written; no coverage for this conduct. |
Key Cases Cited
- Ellis v. England, 432 F.3d 1321 (11th Cir. 2005) (de novo review of summary judgment; contract interpretation is a question of law)
- Bragg v. Bill Heard Chevrolet, Inc., 374 F.3d 1060 (11th Cir. 2004) (contract interpretation; summary judgment standard)
- Herrera v. Safeway Ins. Co., 912 So.2d 1140 (Ala. 2005) (enforce policy terms as written if unambiguous)
- Dempsey v. Auto Owners Ins. Co., 717 F.2d 556 (11th Cir. 1983) (diversity insurance contract interpretation; state law governs)
- Colonial Life & Accident Ins. Co. v. Collins, 194 So.2d 532 (Ala. 1967) (burden on insured to show coverage)
- F.D.I.C. v. Nat’l Union Fire Ins. Co., 205 F.3d 66 (2d Cir. 2000) (relevant to policy interpretation and coverage)