The plaintiff, a transportation broker, suffered a loss when a person claiming to be a truck driver for a legitimate trucking company absconded with a truckload of computer monitors. The plaintiff tendered the loss to its insurer, Travelers Property and Casualty Company. Plaintiff’s insurance policy provided coverage for a loss incurred by a “carrier,” but also contained a carrier dishonesty endorsement which limited coverage for any dishonest act by a “carrier” to $50,000. Travelers tendered $50,000 to the plaintiff, which rejected the offer and filed suit in Oregon state court. Travelers removed the action to federal district court in Oregon.
On cross-motions for summary judgment, the district court held that the word “carrier” in the policy was ambiguous, and that the thief should be treated as a “carrier” for purposes of providing coverage. However, the district court also held that the thief was not a “carrier” for purposes of application of the carrier dishonesty endorsement. Thus, the district court awarded the plaintiff the full $300,000 in policy limits, unrestricted by the $50,000 limit contained in the carrier dishonest endorsement. The district court also awarded the plaintiff attorney’s fees.
Travelers retained Horvitz & Levy to handle the appeal to the Ninth Circuit. The Ninth Circuit agreed with Travelers’ position on appeal and held that while the thief was a “carrier” for purposes of coverage, the thief was also a “carrier” for purposes of the carrier dishonesty endorsement. Thus, the court reversed the $300,000 judgment with directions to enter a new judgment in favor of the plaintiff for $50,000. The court also reversed the award of attorney’s fees.
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