RENDERED: MAY 5, 2023; 10:00 A.M.
NOT TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
NO. 2022-CA-0021-MR
MICHAEL A. VENEMAN, CPA PSC
AND E-PAY, INC. APPELLANTS
APPEAL FROM CAMPBELL CIRCUIT COURT
v. HONORABLE JULIE REINHARDT WARD, JUDGE
ACTION NO. 20-CI-00274
TRAVELERS CASUALTY
INSURANCE COMPANY OF
AMERICA APPELLEE
OPINION
AFFIRMING
** ** ** ** **
BEFORE: COMBS, LAMBERT, AND TAYLOR, JUDGES.
LAMBERT, JUDGE: This appeal arises from a summary judgment in favor of
Travelers Casualty Insurance Company of America (Travelers) regarding the
interpretation of a contract of insurance and endorsements for forgery and
alteration and for computer fraud. We affirm.
Michael A. Veneman, CPA PSC, is a professional service corporation
that was organized under Kentucky law and licensed to provide accounting and
payroll services, tax preparation, and advice to clients in Kentucky. E-Pay, Inc.,
was a Kentucky for-profit corporation that was in the business of making
electronic payroll deposits and disbursements. (Collectively, the plaintiffs or the
appellants.) Travelers is an insurance company organized in Connecticut. The
plaintiffs purchased a contract of insurance from Travelers on August 6, 2015
(policy no. 680-2G554600), and this policy has been periodically renewed. The
policy included extensions that included protections against forgery or alteration
and computer fraud.
The events giving rise to the underlying lawsuit occurred on March
27, 2018, when the plaintiffs entered into a contract with a person they believed to
be Tim Spencer to process payroll deposits for TK Management, Inc. On March
30, 2018, a person claiming to be Tim Spencer (or his agent) withdrew a large
deposit from the payroll account and sent the funds out of the country via Western
Union. In a motion filed in the underlying lawsuit, Travelers described the chain
of events as follows:
The Plaintiffs are related entities that process
payroll for small businesses. Unfortunately, one
purported client they had signed up turned out to be an
imposter posing as a legitimate business owner. Using a
sophisticated scheme, the imposter furnished personal
bank account information and directed the Plaintiffs to
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transfer money from it to other bank accounts
purportedly belonging to the imposter’s employees.
However, as it was later discovered, the other accounts
actually belonged to the imposter or persons working
with him.
Plaintiffs hired Cachet Financial Services (a
clearinghouse bank) to make the transfers. Once the
transfers had taken place, the imposter withdrew large
sums of money. In an ironic twist, the imposter also
contacted Bank of America to report the out-going
transfers as fraudulent. Under complicated clearinghouse
rules for banks, this report of fraud triggered a “claw
back” of various transactions such that Cachet bore the
risk of loss, which it then shifted back to the Plaintiffs by
contract. The end result was a high-tech theft that
allowed the imposter to escape detection and wire funds
out of the country.
In a footnote, Travelers stated:
After the fraud had come to light, Cachet demanded
reimbursement from Plaintiff E-Pay, Inc. which then
signed a promissory note in favor of Cachet to cover the
loss. However, in February 2019, E-Pay filed for
bankruptcy and the obligation to repay Cachet was
discharged as part of that proceeding. In re E-Pay Inc.,
Case No. 19-20143-tnw, E.D. Ky. 2019. Both Cachet
and [E-Pay] are now defunct.
More specifically, Travelers stated the material, undisputed facts as follows (with
references removed):
In March 2018, an unknown individual posing as
“Timothy Spencer” contacted Plaintiffs and claimed to
own a company named TK Management Incorporated
(hereinafter “TK”) located in Jackson, Kentucky. After
exchanging phone calls and emails with the imposter, the
Plaintiffs decided to provide payroll services for TK.
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During this process, the imposter signed a payroll service
agreement, a bank account authorization agreement and
other documents. The imposter also gave Plaintiffs a
blank check for TK’s checking account with Bank of
America.
Consistent with the written agreements, Plaintiffs
began processing payroll for the imposter. Plaintiff E-
Pay Inc. received instructions and information via email
from the imposter necessary to make the transfers (i.e.,
the names of the employees, the amounts each employee
should receive, the names of the receiving banks, the
employees’ checking account numbers, and so forth).
Plaintiff Michael Veneman CPA PSC took the
information received by E-Pay Inc., put it into a formal
report for tax withholding purposes and the report would
then be sent to Cachet to effectuate the transfers. In other
words, Plaintiffs provided payroll instructions to Cachet,
which then withdrew funds from the imposter’s checking
account and routed those funds to the imposter’s
“fictitious” employee accounts.[1]
After Cachet had transferred a series of funds, the
imposter contacted Bank of America to report fraud.
During this process, the imposter withdrew funds from
the fictitious employee accounts and wired them out of
the country. [Footnote omitted.] Once the fraud came to
light, Plaintiffs were able to recoup some of the funds
and give them to Cachet and the IRS.
The plaintiffs made a claim with Travelers (claim no. DHR4194) on
their policy, and the claim was denied on January 16, 2020. As a result of the
1
When Cachet initiated the first few transfers from the imposter’s account, the transactions
failed. The imposter then provided Plaintiffs with alternate routing numbers for his Bank of
America account, and the transactions were then successful. Despite the fact that the first few
transfers “bounced,” the Plaintiffs chose to continue processing payroll for the purported client.
This turned out to be a poor business decision. (Footnote 2 in original.)
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denial, the plaintiffs filed a complaint against Travelers on March 18, 2020, with
the Campbell Circuit Court. They alleged that coverage existed under both the
forgery or alteration and computer fraud provisions of the policy endorsements
(Counts 1 and 2) and that Travelers had breached its contract with them by failing
to cover their loss (Count 3), which entitled them to $35,000.00. They also alleged
claims for breach of an implied contract (Count 4), detrimental reliance (Count 5),
fraud and/or misrepresentation (asserting that a reasonable person would believe
that the policy covered forgery or alteration and computer fraud) (Count 6), and
bad faith (Count 7). The plaintiffs sought both compensatory and punitive
damages.
Travelers filed a notice of removal to the United States District Court
for the Eastern District of Kentucky at Covington on April 14, 2020, based on
diversity jurisdiction, and filed an answer in that court. By stipulation and agreed
order, the case was remanded to the Campbell Circuit Court on June 2, 2020. The
stipulation provided that the combined total damages the plaintiffs sought from
Travelers would be capped at $74,999.99, meaning that the federal district court
lacked diversity jurisdiction.
Upon remand, Travelers moved the circuit court, pursuant to
Kentucky Rules of Civil Procedure (CR) 26.03 and 42.02, to stay discovery on and
bifurcate the plaintiffs’ non-contractual claims until the contractual claims were
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resolved, either by judgment or settlement. The court granted this motion by order
entered March 8, 2021, and bifurcated all bad faith claims. Michael Veneman was
deposed, and through his testimony and discovery responses, supporting
documents were introduced.
On September 6, 2021, Travelers filed a motion for summary
judgment, arguing four grounds to support the motion. First, it argued that there
were not any direct physical losses to any covered property as defined by the
policy based upon the transfer of funds. Second, there were no forgeries or
alterations of any checks, drafts, promissory notes, or other similar written
promises, orders, or directions that were made. Third, there was no computer fraud
as the loss did not arise from a hacking event or other direct use of a computer.
And fourth, even if the terms of the policy could be met, the voluntary parting
exclusion precluded coverage. Because it had not breached the terms of the
insurance policy, Travelers asserted that the plaintiffs’ remaining claims should be
dismissed as a matter of law. In response, the plaintiffs argued that the undisputed
facts supported that both endorsements applied in this case.
On September 17, 2021, the plaintiffs filed their own motion for
summary judgment, arguing that coverage applied. They stated that they had been
scammed by an imposter who had emailed them “fraudulent documents, emailed
an altered personal check made to look like a business check, emailed directions
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(orders to pay), and included electronic transfers from a clearinghouse bank
(Cachet Banq) to the accounts of fictitious employees which were controlled by the
imposter,” which then led to the transfer of funds out of the country by Western
Union. The amount of the lost funds totaled $229,657.59, which Cachet attempted
to recover from E-Pay, Inc., and in doing so illegally seized funds from another of
the Plaintiffs’ clients, Art’s Rent-a-Tool. Although the seized funds were returned,
Michael Veneman CPA PSC had lost that company as a client, held since 2018.
The plaintiffs were able to recoup a small amount, but they lost a deposit for taxes
to the IRS. As their argument, the plaintiffs contended that both endorsements
applied to provide coverage in this case. In its response, Travelers argued that the
information about Art’s Rent-a-Tool was not pertinent to the coverage analysis as
the complaint only referenced the fraudulent activity of the imposter.
The court heard oral arguments from the parties on November 22,
2021. The court asked plaintiffs’ counsel about the voluntary parting exclusion,
which had not been addressed in their brief. He argued that the two endorsements
should be read separately from the policy, which would remove the voluntary
parting exclusion, but he did not cite any caselaw to support this position or
respond to the caselaw cited by Travelers. As far as damages, the plaintiffs were
claiming $45,000.00 due to the loss of a client. The other companies (Cachet and
E-Pay) were defunct and would therefore not be making any claims for payment
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for the funds that were lost to the imposter. Travelers argued that the policy
declarations and endorsements were to be construed as a whole and that the
endorsements were not stand-alone policies.
On December 2, 2021, the circuit court entered an order ruling on the
cross-motions for summary judgment. The Court found no merit in any of the
plaintiffs’ claims and denied their motion, and it granted Travelers’ motion, finding
that it was entitled to a judgment as a matter of law on all of the plaintiffs’ claims.
This appeal now follows.
On appeal, the plaintiffs (now appellants) argue that the circuit court
improperly granted summary judgment to Travelers on their claims related to the
application of the forgery or alteration and computer fraud endorsements and for
breach of contract. They have not raised any issues as to the remaining claims of
breach of implied contract, detrimental reliance, fraud and/or misrepresentation,
and bad faith. Therefore, we shall not address the circuit court’s ruling as to those
claims.
An appellate court’s standard of review of a summary judgment is set
forth in Patton v. Bickford, 529 S.W.3d 717, 723 (Ky. 2016):
Summary judgment is a remedy to be used
sparingly, i.e. “when, as a matter of law, it appears that it
would be impossible for the respondent to produce
evidence at the trial warranting a judgment in his favor
and against the movant.” Shelton v. Kentucky Easter
Seals Society, Inc., 413 S.W.3d 901, 905 (Ky. 2013)
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(citations omitted). We frequently caution, however, the
term “impossible” is to be used in a practical sense, not
in an absolute sense. See id. (citing Perkins v.
Hausladen, 828 S.W.2d 652, 654 (Ky. 1992)). The trial
court’s primary directive in this context is to determine
whether a genuine issue of material fact exists; if so,
summary judgment is improper, Steelvest, Inc. v.
Scansteel Service Center, Inc., 807 S.W.2d 476, 480 (Ky.
1991). This requires that the facts be viewed through a
lens most favorable to the party opposing summary
judgment, here the Estate. Id. It is important to point out
that “a party opposing a properly supported summary
judgment motion cannot defeat it without presenting at
least some affirmative evidence showing that there is a
genuine issue of material fact for trial.” Id. at 482.
A motion for summary judgment presents only
questions of law and “a determination of whether a
disputed material issue of fact exists.” Shelton, 413
S.W.3d at 905. Our review is de novo, and we afford no
deference to the trial court’s decision.
As there are no disputed material facts, our review is whether the circuit court, as a
matter of law, properly interpreted the policy of insurance and granted summary
judgment to Travelers.
In James Graham Brown Foundation, Inc. v. St. Paul Fire & Marine
Insurance Company, 814 S.W.2d 273, 279 (Ky. 1991), the Supreme Court of
Kentucky addressed the interpretation of insurance contracts and recognized:
The proper standard for the analysis of insurance
contracts in Kentucky is a subjective one. Fryman v.
Pilot Life Insurance Company, Ky., 704 S.W.2d 205
(1986) holds that terms of insurance contracts have no
technical meaning in law and are to be interpreted
according to the usage of the average man and as they
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would be read and understood by him in the light of the
prevailing rule that uncertainties and ambiguities must be
resolved in favor of the insured.
And in Motorists Mutual Insurance Company v. RSJ, Inc., 926 S.W.2d 679, 681
(Ky. App. 1996), this Court recognized that “terms used in insurance contracts
‘should be given their ordinary meaning as persons with the ordinary and usual
understanding would construe them.’ City of Louisville v. McDonald, Ky. App.,
819 S.W.2d 319, 320 (1991).” With these statements of the law in mind, we shall
consider the appellants’ arguments.
Our review of the circuit court’s order confirms that its legal analysis
was correct, and we shall adopt the following reasoning as our holding in this case:
First, Plaintiffs argue that they are covered by the policy
extensions for “Forgery or Alteration” and Computer
Fraud.” [Plaintiffs maintain] that these policy extensions
stand or fall on their own and must be construed
separately from the remainder of the Policy. This
position is not supported by Kentucky case law or the
language of the Policy itself.
....
The Kentucky Supreme Court has determined that
“[t]he policy and its endorsement validly made a part
thereof together form the contract of insurance, and are to
be read together to determine the contract actually
intended by the parties.” Kemper Nat. Ins. Companies v.
Heaven Hill Distilleries, Inc., 82 S.W.3d 869, 875 (Ky.
2002) (citing 1 Couch on Insurance 2d § 4:36 (1983)).
The plain language of the Policy states: “This policy
consists of the Common Policy Declarations and the
Coverage Parts and endorsements listed in that
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declarations form.” The Court believes that the Policy
must be construed as a whole, and that the “computer
fraud” and “forgery or alteration” coverage extensions
are not standalone provisions.
Next the Plaintiffs contend that the electronic
funds transferred by Cachet to the imposter’s fictitious
employees were “covered property” under the Policy.
Under the Businessowners Property Coverage Special
Form MP T1 02 02 05, the policy provides, in relevant
part:
A. COVERAGE
We will pay for direct physical loss of or
damage to Covered Property at the premises
described in the Declarations caused by or
resulting from a Covered Cause of Loss.
1. Covered Property
Covered Property, as used in this Coverage Form,
means the type of property described in this
Paragraph A.1., and limited in Paragraph A.2.,
Property Not Covered, if a Limit of Insurance is
shown in the Declarations for that type of property.
....
b. Business Personal Property
located in or on the buildings
described in the Declarations or in the
open (or in a vehicle) within 1,000
feet of the described premises,
including:
(1) Property owned by
you and used in your
business;
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(2) Property of others
that is in your care,
custody or control;
(3) Your use interest as a
tenant in improvements
and betterments . . . and
(4) “Money” and
“Securities.”
2. Property Not Covered
Unless the following is added by
endorsement to this Coverage Form,
Covered Property does not include:
...
(k) Accounts and bills, except
as provided in the Accounts
Receivable Coverage
Extension[.]
...
4. Covered Causes of Loss
RISKS OF DIRECT PHYSICAL LOSS
unless the loss is:
(a) Limited in Paragraph A.5.,
Limitations; or
(b) Excluded in Paragraph B.,
Exclusions.
...
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G. PROPERTY DEFINITIONS
...
17. “Money” means currency and coins in
current use, bank notes, travelers checks,
registered checks and money orders held for
sale to the public.
...
25. “Securities” means all negotiable and
non-negotiable instruments or contracts
representing either “money” or other
property and includes revenue or other
stamps in current use, tokens, tickets and
credit card slips for sales made by you and
held by you for reimbursement from
companies issuing credit cards, bud does not
include “money”. Lottery tickets held for
sale are not securities.
In the present case, “business personal property” is
defined as property located in or on the premises
described in the Declarations or located in the open or
within 1,000 feet of the described premises. “Business
personal property” also includes property owned by the
insured and used in its business; “money” and
“securities”; and property of others in the insured’s care,
custody, and control. The electronic funds at issue were
not located on the Plaintiffs’ building premises, nor were
they located in the open or within 1,000 feet of the
premises. Moreover, the funds were not “money” or
“securities” under the Policy.
In Harvard Street Neighborhood Health Center,
Inc. v. Hartford Fire Ins. Co., CV 14-13649-JCB, 2015
WL 13234578, at *8 (D. Mass. Sept. 22, 2015), the court
held that funds deposited into a bank account do not have
a physical material existence and are not susceptible to
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physical loss or damage. Similarly, in Florists’ Mutual
Insurance Co. v. Ludy Greenhouse Mfg. Corp., 521 F.
Supp. 2d 661, 680-81 (S.D. Ohio 2007), the court
determined that funds deposited into a bank account were
intangible property and intangible personal property is
not capable of being physically possessed. Thus, to
qualify as “money” or “securities,” the property must
involve physical funds or tangible negotiable
instruments. Since the electronic funds at issue did not
have a physical existence, they do not meet the definition
of “money” or “securities” under the Policy.
Thus, the only way the electronic funds could
qualify as “business personal property” is if the funds
were in the Plaintiffs’ “care, custody, or control.” In
Loeb Properties, Inc. v. Federal Ins. Co., 663 F. Supp. 2d
640, 647 (W.D. Tenn. 2009), the Court determined that
care, custody, and control in the insurance context
denotes exclusive dominion over property (citing 9
Couch on Ins. § 126:22 (3d ed. 1997)). Specifically, the
Court found that the plaintiff did not have exclusive
dominion over the Loebs’ personal bank account when
the money in the Loebs’ account was in the bank and the
funds were never stored at Plaintiff’s premises. Plaintiff
did not own the funds and lacked authority to direct how
the Loebs spent those funds. Id. at 647-48.
Even if the electronic funds could be considered
“personal property,” there was no “direct physical loss”
to “covered property.” “Direct physical loss” is not
defined in the Policy. However, courts have interpreted
“direct physical loss” to require tangible property and
have determined that electronic funds do not have a
physical existence and thus, are not susceptible to
physical loss or damage. See Florists’ Mut. Ins. Co. v.
Ludy Greenhouse Mfg. Corp., supra; Sentience Studio,
LLC v. Travelers Ins. Co., 102 F. App’x 77, 81 (9th Cir.
2004).
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In the present case, the funds in the imposter’s
bank account were not susceptible to physical loss
because the funds were intangible and incapable of being
physically possessed. Since the loss did not involve
damage to physical coins or currency, the Plaintiffs
cannot show that there was a “direct physical loss” to
“covered property.”
The Court also believes that the facts fail to trigger
coverage under the terms of the Policy’s “Forgery or
Alteration” extension. The policy extension states:
i. Forgery or Alteration
(1) We will pay for loss
resulting directly from
“forgery” or alteration of
checks, drafts, promissory
notes, or similar written
promises, orders or directions
to pay a sum certain in money
that are made or drawn by or
drawn upon you, or made or
drawn by one acting as an agent
or purported to have been so
made or drawn.
We will consider signatures
that are produced or reproduced
electronically, mechanically or
by facsimile the same as
handwritten signatures.
...
G. PROPERTY DEFINITIONS
...
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12. “Forgery” means the signing of
the name of another person or
organization with the intent to
deceive. “Forgery” does not mean a
signature which consists in whole or
in part of one’s own name signed with
or without authority, in any capacity
for any purpose.”
Plaintiffs contend that the emails sent by the
imposter directing Plaintiffs to initiate the transfers of
electronic funds constituted “checks, drafts, promissory
notes, or similar written promises, orders, or directions to
pay.” However, courts have held that emails do not have
the same legal effect as checks, drafts, or promissory
notes, and that the promises, orders or directions to pay
must resemble a check, draft, or promissory note.
Midlothian Enterprises, Inc. v. Owners Insurance
Company, 439 F. Supp. 3d 737, 743 (E.D. Va. 2020);
Sanderina, LLC v. Great American Insurance Company,
218CV00772JADDJA, 2019 WL 4307854, at *3 (D.
Nev. Sept. 11, 2019). Thus, the Court does not believe
that the emails constituted “checks, drafts, promissory
notes, or similar written promises, orders, or directions to
pay.”
Plaintiffs further maintain that the “Forgery or
Alteration” extension was triggered because the imposter
presented a blank check for an account belonging to TK
Management Inc. However, the Policy requires the
forgery or alteration of a check that was “drawn by or
drawn upon” the insured. Since the check was not drawn
on an account belonging to Michael A. Veneman CPA
PSC or E-Pay Inc., the loss does not involve the forgery
of a check, draft or other negotiable instrument drawn by
or drawn upon the Plaintiffs. Accordingly, the “Forgery
or Alteration” extension does not apply.
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Plaintiffs also argue that the emails sent by the
imposter trigger the Policy’s “Computer Fraud”
coverage. The coverage provides:
b. Computer Fraud
(1) When a Limit of Insurance is shown in the
Declarations for Business Personal Property at the
described premises, you may extend that insurance
to apply to loss of or damage to Business Personal
Property resulting directly from the use of any
computer to fraudulently cause a transfer of that
property from inside the building at the described
premises or “banking premises”:
(a) To a person outside those premises; or
(b) To a place outside those premises.
The Defendant contends that although the imposter used
a computer to send emails to Plaintiffs directing the
transfers, the “Computer Fraud” coverage does not apply
because the transfers did not result directly from the use
of a computer. When considering this issue, courts have
examined the connection between the imposter’s use of a
computer and the transfer of the funds. In Pestmaster
Servs., Inc. v. Travelers Cas. & Sur. Co. of Am., 656 F.
App’x 332, 333 (9th Cir. 2016), the Court noted that the
mere fact that a transfer involves a computer and fraud at
some point in the transaction is not enough to trigger
coverage under a computer fraud policy. Specifically,
the Court observed that “[b]ecause computers are used in
almost every business transaction, reading this provision
to cover all transfers that involve both a computer and
fraud at some point in the transaction would convert this
Crime Policy into a ‘General Fraud’ Policy.” Similarly,
in Apache Corp. v. Great Am. Ins. Co., 662 F. App’x
252, 258 (5th Cir. 2016), the Court determined that
coverage under a computer fraud policy did not apply
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merely because the imposter’s email was part of the
scheme. Rather, the email was merely incidental to the
transfer of funds.
The present case does not involve a hacker gaining
access to the Plaintiffs’ computer system to fraudulently
cause a transfer of funds. Rather, the imposter used a
computer to send emails to Plaintiffs directing them to
process payroll, and then Plaintiffs sent the information
to third party clearinghouse, Cachet, who actually
transferred the funds from the imposter’s bank account
with Bank of America to the imposter’s fictitious
employees. Although the emails that Plaintiffs relied on
were fraudulent because they were from an imposter
posing as Timothy Spencer, the loss itself did not directly
result from the use of a computer. There was no direct
connection between the imposter’s use of a computer to
send emails to Plaintiffs and Cachet’s actual transfer of
the funds. Therefore, the “Computer Fraud” coverage
does not apply.
Finally, even if the terms of the Policy were
otherwise met, the “Voluntary Parting” exclusion
precludes coverage. The Policy states: “we will not pay
for loss or damage caused by or resulting from . . .
voluntary parting with any property by you or anyone
else to whom you have entrusted the property.”
Voluntary parting exclusions have been upheld in the
former Kentucky Court of Appeals. In Ins. Co. of N. Am.
v. Lile, 321 S.W.2d 50, 51 (Ky. 1959), when an auto
dealer delivered temporary custody and possession of a
car to a man based on his false representation that he was
employed by another individual known to the auto dealer
and then took the car without paying and did not return,
the Court held that the loss was excluded from coverage
because the dealer voluntarily parted with the vehicle. In
explaining its decision, the Court stated:
[T]he insurer plainly manifests therein an
intention not to enter into a contract equal to
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a ‘blanket bond guaranteeing the integrity of
all persons’ to whom the insured might
voluntarily entrust the possession of the
insured property, and that the loss incurred
by such delivery should be borne by the
insured who possesses superior
opportunities for ascertaining the moral
character and reputation of the one to whom
possession is so given than does the insurer
and that the consequences should fall’ on
him.
Id. (citing Aetna Casualty & Surety Co. v. Salyers, 172
S.W.2d 635 (Ky. 1943), and Kidwell v. Paul Revere Fire
Ins. Co., 172 S.W.2d 639 (Ky. 1943)).
Here, after receiving email instructions from the
imposter, the Plaintiffs directed Cachet to transfer funds
from the imposter’s bank account to the accounts of the
imposter’s fictitious employees. After the first few
transfers did not go through successfully, the Plaintiffs
continued to work with the imposter, prompting the
imposter to provide new banking numbers. Although the
Plaintiffs later learned that the emails came from an
imposter in an effort to initiate fraudulent transfers, this
does not change the voluntariness of the parting.
Moreover, because the funds were not owned by
Plaintiffs and the actual transfer of funds was done by
Cachet and not Plaintiffs, the Court does not believe that
the Plaintiffs actually possessed covered property under
the Policy to part with. However, even if the Court
determined that the Plaintiffs possessed covered property,
the parting was done voluntarily. Thus, the “Voluntary
Parting” exclusion precludes coverage.
Accordingly, because there was no coverage under the policy, there
could be no breach of contract, and the appellants’ claims must fail as a matter of
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law. The circuit court did not commit any error in granting summary judgment in
favor of Travelers and denying the appellants’ cross-motion.
For the foregoing reasons, the summary judgment in favor of
Travelers is affirmed.
ALL CONCUR.
BRIEF FOR APPELLANTS: BRIEF FOR APPELLEE:
Richard A. Jarvis Stephen C. Keller
John C. Hayden Adrianna M. Long
Newport, Kentucky Louisville, Kentucky
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