Summary
holding that an exclusion for "unexplained loss," "mysterious disappearance," and "loss or shortage discovered on taking inventory," was unambiguous and applied to exclude jewelry loss where insured's president could not say how or where loss occurred
Summary of this case from Gibbs Int'l, Inc. v. ACE Am. Ins. Co.Opinion
Argued October 20, 1992
Decided November 18, 1992
Appeal from the Appellate Division of the Supreme Court in the First Judicial Department, Carol E. Huff, J.
Tenzer, Greenblatt, Fallon Kaplan, New York City (Edward L. Sadowsky of counsel), for appellant.
Abrams Martin, P.C., New York City (Michael E. Gorelick and Martin I. Nagel of counsel), for respondents.
MEMORANDUM.
The order of the Appellate Division should be affirmed, with costs.
During a business trip, plaintiff's president noticed that a bag containing jewelry was missing from his personal effects. He was unable to say how or where the loss occurred. Plaintiff thereafter submitted a claim to defendants, the issuers of its primary and excess "jewelers block" insurance policies. Defendants, however, disclaimed liability for the loss, relying on the clauses in their policies that excluded from coverage "[u]nexplained loss, mysterious disappearance or loss or shortage disclosed on taking inventory."
Plaintiff commenced the present action, arguing that the exclusionary clause on which defendants relied is ambiguous because it could be construed to apply only to losses discovered "on taking inventory" rather than to all mysterious and unexplained losses regardless of how such losses are discovered. Both courts below rejected plaintiff's argument and granted defendants summary judgment dismissing the complaint. We now affirm.
Where the provisions of an insurance contract are clear and unambiguous, the courts should not strain to superimpose an unnatural or unreasonable construction (see, e.g., Government Empl. Ins. Co. v Kligler, 42 N.Y.2d 863; Ambassador Assocs. v Corcoran, 79 N.Y.2d 871, affg 168 A.D.2d 281). Contrary to plaintiff's argument, the clause in issue here is susceptible of only one interpretation. Each of the enumerated casualties, i.e., "[u]nexplained loss," "mysterious disappearance," and "loss or shortage discovered on taking inventory," in plainly an independent basis for exclusion. There is nothing in the grammar or syntax of the exclusionary clause to suggest that the phrase "discovered on taking inventory" was intended to modify each one. To the extent that the court reached a contrary conclusion in McCormick Co. v Empire Ins. Group Co. ( 878 F.2d 27), its holding is an inaccurate interpretation of New York State law.
Equally unpersuasive is plaintiff's argument that the ruling of the courts below improperly shifted the burden of proof from the insurer to the insured. While it is true that an insurer generally has the burden of proving that a loss is within the scope of a policy exclusion (Facet Indus. v Wright, 62 N.Y.2d 769, 771), defendants satisfied that burden here by simply showing that plaintiff's claim concededly involved an "unexplained loss" or "mysterious disappearance."
Acting Chief Judge SIMONS and Judges KAYE, TITONE, HANCOCK, JR., BELLACOSA and SMITH concur.
Order affirmed, with costs, in a memorandum.