Philadelphia
Indemnity Insurance Company (Philadelphia) provided four separate crime
policies from 1/01/2010 through 1/10/2014 to First United Methodist Church
(First). Initially, due to a financial audit, it was discovered that First’s
finance manager was embezzling church funds for a total amount of $200,000. The
embezzlements occurred beginning in 2008. First discovered the embezzling in
December, 2012 and reported the loss in January, 2013. Philadelphia paid its
policy limit of $50,000 for the policy period beginning in 2013. The parties
disagreed that the policy limits were also due for the policies beginning in
2011 and 2012. Both parties filed for summary judgment. When the lower court
found in favor of First, resulting in a $100,000 award plus pre-judgment
interest and court costs, Philadelphia appealed.
Philadelphia,
upon appeal, argued that their policy language with regard to the
non-cumulation of separate policy limits, their wording of “occurrence” with
regard to employee dishonesty,” the separate policy numbers provided for the
crime policies issued to First all justified their limiting their obligation to
paying the policy limit just for the last loss discovered. Philadelphia’s
position was that it was the only act of embezzlement that was eligible for
coverage under the series of crime policies.
First reasserted its argument that the policy wording permitted several
policies to respond to the ongoing acts of embezzlement and that the timing of
their discovery allowed reimbursement from two, earlier policies. It also
asserted that Philadelphia’s policy wording was subject to different
interpretation and the resulting ambiguity should favor coverage from several
policies.
The higher
court reviewed several cases that were presented by both parties as relevant to
the matter along with several portions of relevant policy language. After
examination of several cases the higher court decided that Philadelphia’s
policy language was subject to more than one meaning and that the insurer’s
argument that its policy language restricted recovery from previous policies
was not supported. Specifically, the court viewed the acts of embezzlement as
being separate occurrences covered by separate policies. The lower court
decision in favor of First was affirmed.
First United
Methodist Church of Stillwater, Inc. Plaintiff-Appellee, v. Philadelphia
Indemnity Insurance Company, a foreign corporation d/b/a Philadelphia Insurance
Companies, Defendant-Appellant. No. 114396. Court of Appeals of Oklahoma,
Division II. Filed August 26, 2016. Affirmed. VersusLaw
2016.OK.0000141<http://www[.]versuslaw[.]com>