DTI Logistics, Inc. (DTI) was a small trucking company that leased many of its trailers from Ryder Trucks. Because of this relationship, Ryder gave DTI permission to park trailers at a Ryder facility in Atlanta. Colgate-Palmolive hired DTI to transport cargo valued at $100,000, which required three trailers. DTI parked the three loaded trailers at Ryder's Atlanta facility between May 9 and May 11, 2003. Each trailer was detached from its tractor, closed and securely locked, with the keys removed. Despite these measures, at some point the trailers were removed from the facility by unknown persons and later returned empty.

DTI had cargo insurance provided by Those Certain Underwriters At Lloyds, London (Underwriters) that covered loss of cargo owned by third parties. DTI requested reimbursement for the loss but Underwriters denied coverage. DTI sued for breach of contract and the trial court found in its favor. Underwriters appealed, contending that its motion for a directed verdict was erroneously denied and that the jury was improperly instructed concerning a term in the policy. (A directed verdict is authorized only when there is no conflict in the evidence on any material issue and the evidence introduced, with all reasonable deductions, demands a particular verdict.)

The coverage provided was all risks of physical loss or damage from an external cause to lawful cargo in or on a truck while in the insured's care, custody or control in the ordinary course of transit, including loading or unloading. Cargo was defined as only property owned by third parties. Exclusion K. excluded losses from unattended vehicles (defined as a trailer without a responsible person within ten yards of it) unless it was garaged in a building or parked in a fully enclosed yard securely closed and locked, or the trailer was under constant surveillance, or on a guarded lot AND the trailer had all openings closed and securely locked and keys removed, to the extent that local regulations permitted.

Before the trial, the court granted partial summary judgment in favor of Underwriters, finding undisputed that the trailers were not in a building, parked in a fully enclosed yard, or under constant surveillance. The court submitted the question to the jury of whether the trailers were on a guarded lot as well as the question of the amount of damages DTI was entitled to recover. After all evidence was presented, the court determined liquidated damages of $101,718.07 after the deductible was applied. The jury determined that the trailers were on a guarded lot.

The Court of Appeals determined that the fact that DTI had not paid its customer or intended purchasers for the loss of cargo from its trailers as a result of theft by third parties did not preclude it from sustaining damages, as an element of its breach of contract claim against Underwriters. DTI had an insurable interest in the cargo, the policy's use of the term "indemnify" was broad enough to include any loss (not just liability to third parties) and damage to or loss of cargo immediately gave rise to a claim under the policy.

The court also determined that the policy's guarded-lot condition would be satisfied if the lot the trailers were stolen from and later returned to after the cargo was removed was watched over or if the entrance and exit was supervised. It determined that the term "guarded" was not specifically defined. As a result, it was ambiguous and definitions from several dictionaries each contained the concept of supervising entrances and exits. The Court of Appeals affirmed the findings of the trial court in all respects.

Court of Appeals of Georgia. Those Certain Underwriters At Lloyds, London v. DTI Logistics, Inc. No. A09A1432. Nov. 2, 2009. 300 Ga.App. 715, 686 S.E.2d 333, 09 FCDR 3587