Consignee Not A Carrier Under The Unattended Automobile Exclusion

Commercial Inland Marine	Theft
Jewelers Block	No Exception

An independent dealer took jewelry on consignment from a jewelry firm. A bag containing the property was stolen from his automobile while he was temporarily away from it. The claim was denied under his jewelers block policy under the unattended automobile exclusion.

The owner of the lost jewelry then made a claim under its jewelers block policy, which contained insuring provisions virtually identical to those in the dealer's policy. The underwriters (at Lloyds) sought a determination of their rights and obligations by filing a declaratory judgment action. They and the insured then filed motions for final summary judgment.

A federal district court, conducting a hearing on the motions, focused on the pertinent unattended automobile exclusion (quoted as follows): "....Loss or damage to property insured while in or upon any automobile, motorcycle or any other vehicle unless, at the time the loss or damage occurs, there is actually in or upon such vehicle, the Assured, or a permanent employee of the Assured, or a person whose sole duty is to attend the vehicle. This exclusion shall not apply to property in the custody of a carrier as mentioned in Section 2 hereof, or in the custody of the Post Office Department as first class registered mail."

The central issue was whether the dealer was a "carrier" within the meaning of the exception to the unattended automobile exclusion. The underwriters said that he was not because the term applied only to firms whose primary business is the transportation of property. The insured argued to the contrary, contending that the term reasonably was subject to several interpretations.

The court noted that "carrier" was defined in Black's Law Dictionary as "an individual or organization engaged in transporting passengers or goods for hire." It found that all of the organizations mentioned in Section 2 (pertinent to the exception to the exclusion) were "in the business of transporting goods for hire." It also determined that the dealer's job as a consignment salesman "is to sell jewelry, not to transport it."

The underwriters' motion for summary judgment was granted; that of the insured was denied.

Those Certain Underwriters At Lloyds, Plaintiffs-Counterdefendants v. Capri Of Palm Beach, Incorporated, Defendant-Counterclaimant. United States District Court for the Southern District of Florida. No. 95-8291-CIV-Moreno. April 24, 1996. CCH 1996 Fire and Casualty Cases, Paragraph 5798.