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Several amounts of theft losses that are less than the requirement for deductible defeats



I Port Consolidated, Inc. v International Insurance Company Of Hannover, PLC, No. 19-13544, United States Court of Appeals For The Eleventh Circuit (September 8, 2020) Port Consolidated, Inc. ("Port"), a Florida company, appealed the district court's decision to grant a summary judgment in favor of the International Insurance Company in Hanover, PLC ("InterHannover"), a foreign company, on Port's breach of contract claims, as well as the district court's final decision dismissing the remaining counts of Port's complaint and the final judgment in favor of InterHannover.

FACTUAL HISTORY

Port is a fuel distribution company operating a card cap fuel plant in Riviera Beach, Florida ("Garden Road" Plant "). According to the parties, card lock systems are similar to traditional gas stations, but are unattended refueling plants where only customers are authorized contractual relationship can pump petrol and diesel.A customer with access to a card locking system that the customer must apply for and then sign an agreement with the facility owner.If approved, the customer receives a "CFN card", which can be used to pump fuel in a card locking system , for example, Port & # 39 ;s Garden Road Facility. Customers can request restrictions on their CFN cards, including limits on gallons of fuel to be pumped per transaction, the transaction frequency and the hours during which fuel can be pumped.

InterHannover issued an insurance policy for commercial property (“Policy”) to port, according to the policy provided by InterHan nover coverage for "direct physical loss to covered property in a" covered place "caused by a covered danger, subject to a deductible. In the case of deductibles, InterHannover only pays the portion of a loss over the deductible amount specified in the coverage plan in any event and the coverage form schedule provides that the deductible per event is $ 1

,000.

In February 2015, Port discovered that it had a shortage of fuel supplies. The Port's investigation concluded that an incorrectly programmed setting on its fuel pumps at the Garden Road Facility, resulting from an upgrade in 2013 to that facility, had not implemented the CFN card's fuel limit requested by Allied Trucking of Palm Beach ("Allied"), one of the port's customers. Allies had put a limit on fuel purchases of seventy-five liters of fuel per transaction on their CFN cards. However, the incorrect attitude made it possible for Allied's affiliated drivers, who work as independent contractors, to exceed the seventy-five gallon limit by up to a further hundred liters, even though the Allies were only billed for seventy-five liters per transaction.

Port informed InterHannover that it claimed a claim under the policy for the loss due to the alleged fuel. After InterHannover denied coverage, Port sued InterHannover.

Eventually, InterHannover moved to a summary judgment, arguing that Port was not entitled to coverage because the alleged thefts were expressly excluded under the policy and that each alleged theft was a separate event not exceeding the deductible $ 1000 in the policy. The district court granted InterHannover's request for a summary judgment. Apply Florida's Supreme Court decision in Koikos v. . Travelers Insurance Co ., 849 So. 2d 263 (Fla. 2003), the district court found that "in the absence of the opposite language in the policy, any act of fuel theft was a discreet event for insurance purposes."

ANALYSIS

Under Florida law, insurance contracts are interpreted according to their simple meaning. In order for an insurance policy to be ambiguous, the provision must actually be ambiguous. If the relevant language of insurance is susceptible to more than a reasonable interpretation, one providing coverage and the other limiting coverage, the insurance is considered ambiguous. However, courts may not rewrite contracts, add meaning that is not present or otherwise achieve results that are contrary to the intentions of the parties.

The term "event" is not defined in the section on general definitions in the policy. According to Florida law, when a term for insurance coverage is not defined, the term should be given its simple and common meaning.

According to Florida law, an agreement should not be read so that a section is redundant, and so all the different provisions of an agreement must be interpreted as having effect for each one. The policy only defines "event" to include multiple or a "series" of acts or unauthorized use within a part of the supplementary protection that has no connection with the allegation of theft. The Eleventh Circuit concluded that determining that specific definitions of "event" within certain supplementary coverage govern the entire policy would render the absence of "event" from the general definition section of the core policy meaningless.

The reasonable interpretation of the policy as a whole is that the parties specifically extended the scope of the "event" to include a series of actions if, and only if, a requirement was made under these specific supplementary coverage provisions. An ambiguity is not always present when a contract requires interpretation. coverage does not necessarily make the concept ambiguous. Since "event" is defined in the section on the supplementary cover letter, but not in the section on general definitions in the policy, according to the eleventh circle it does not make the term ambiguous and concluded that none of the port's losses exceeded the policy's deductible and InterHannover was not obliged to pay port according to the policy for the alleged fuel thefts. The summary judgment in favor of InterHannover on Port's breach of contract claims proved to be correct and the eleventh district upheld the trial court as each alleged fuel theft constituted a separate event under the policy and none of the alleged thefts exceeded the policy deductible. The district court properly issued a summary judgment in favor of InterHannover.

The port, the insured, tried to change his error in setting up his computer system to steal failed because the evidence showed that each "theft" was 100 gallons or less over the 75 gallon limit or $ 400. The deductible of $ 1,000 was applied to each "theft" when drivers pumped more gasoline than allowed under the contract, malicious software allowed them to pump more than the contract allowed. The eleventh district refused to rewrite the policy to assist Port and had no choice but to confirm the court's decision.


© 2020 – Barry Zalma. He also acts as an arbitrator or mediator for insurance-related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims lawyer and more than 52 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.

Mr. Zalma is the first recipient of the first annual Claims Magazine / ACE Legend Award.

For the past 52 years, Barry Zalma has devoted his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to enable insurers and their claims staff to become insured.

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