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WCM Wins Major Coverage Ruling for Specie Market: Classic “Unattended Vehicle” Exclusion Applies to Goods on Consignment
October 10, 2024
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On October 7, the New York State Supreme Court, New York County, confirmed what the jewelry industry has known for centuries: the longstanding “unattended vehicle” exclusion in every jewelers’ policy applies to goods on consignment. In a landmark decision, the Honorable Debra James granted summary judgment for defendants, endorsing their common sense and contract-based argument in Avi and Co. N.Y. Corp. and Time 2 Tick, Inc., v. Those Certain Underwriters At Lloyd’s London, Subscribing to Policy No. FINFR 1902879, 650374/2021 (N.Y. Oct. 8, 2024).
Plaintiffs-Insureds filed this breach of contract claim against Defendants-Insurers Those Certain Underwriters At Lloyd’s London, (“Underwriters”), after Underwriters disclaimed coverage on the basis of the Jewelers Block Policy’s “unattended vehicle” exclusion after an investigation into the loss of approximately $1.6 million worth of jewelry that Plaintiffs had entrusted to non-party consignee El Russo & Co. for potential sales.
After litigation commenced, and in response to Underwriters’ Notice to Admit, Plaintiffs confirmed that unknown thieves stole the consigned jewelry from the back seat of an unoccupied and unattended vehicle used by two El Russo employees. The El Russo employees were inside a jewelry store at the time, with their vehicle – and the consigned jewelry inside it – out of sight. They did not witness the burglary, only discovering the theft when they returned to their vehicle to find a police officer writing a report.
Underwriters moved for summary judgment, citing decisions from the First Department and other jurisdictions which have routinely upheld the “unattended vehicle” exclusion. That exclusion precludes coverage for:
“[l]oss of or damage to Stock Insured while in or upon any automobile . . . unless, at the time the loss or damage occurs, there is actually in or upon such vehicle, the Insured, employee or officer of the Insured, commission salesperson or selling agent, or a person whose sole duty it is to attend the vehicle . . .”
In its well-reasoned decision, the Court relied on the plain and ordinary meaning of the “unattended vehicle” exclusion and held that: “[t]he fact that the term ‘consignees’ was not expressly identified in the Unattended Vehicle Exclusion does not render the provision ambiguous.” Id.
