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Universal Underwriters Insurance Co. v. Ford

March 11, 1999

UNIVERSAL UNDERWRITERS INSURANCE COMPANY, A MISSISSIPPI CORPORATION
v.
BUDDY JONES FORD, LINCOLN-MERCURY, INC., A MISSISSIPPI CORPORATION



Before Prather, C.j., Banks And McRAE, JJ.

The opinion of the court was delivered by: Banks, Justice

DATE OF JUDGMENT: 01/31/97

TRIAL JUDGE: HON. JON M. BARNWELL

COURT FROM WHICH APPEALED: LEFLORE COUNTY CHANCERY COURT

NATURE OF THE CASE: CIVIL - INSURANCE

DISPOSITION: AFFIRMED IN PART; REVERSED IN PART; REMANDED - 3/11/99

MOTION FOR REHEARING FILED:

MANDATE ISSUED:

¶1. Here we deal with a matter of insurance policy construction. We conclude that the successive policies provide coverage under our traditional doctrine of construing such policies in favor of the insured. We affirm the trial court in its judgment finding liability. We reverse the trial court in its decision limiting that liability to a single year.

I.

¶2. This matter arises out of certain alleged occasions of embezzlement committed by Patsy Ellis, a former bookkeeper and office manager of Buddy Jones Ford Lincoln-Mercury, Inc. (Jones Ford). Ellis misappropriated the monies from Jones Ford on 175 separate occasions from 1984 through 1988, resulting in a total loss to Jones Ford of $233,082.97. The embezzlement was discovered by Jones Ford on or about July 25, 1988, during an unannounced independent audit.

¶3. Jones Ford was insured by Universal Underwriters Insurance Company (Universal). Universal had issued a Unicover garage liability policy of insurance number 015527 for the policy period October 1, 1984, to October 1, 1985, with Jones Ford as the named insured. Four additional policies were issued by Universal to Jones Ford during the following periods: Unicover policy number 015527A for the policy period October 1, 1985, to October 1, 1986; Unicover policy number 015527B for the policy period October 1, 1986, to October 1, 1987; Unicover policy number 015527C for the policy period October 1, 1987, to October 1, 1988; and Unicover policy number 015527D for the policy period October 1, 1988, to October 1, 1989.

¶4. All of the Unicover policies issued to Jones Ford provided fidelity bond coverage for "Employee Dishonesty" under the section entitled "UNICOVER COVERAGE PART 380 - CRIME," and contained identical language relating to the conditions, provisions, deductibles, limits of liability, exclusions and amounts of coverage for employee dishonesty. The stated limit of liability for employee dishonesty is $10,000 with a $250 deductible, as set forth on page 1-F of the declaration pages contained in the policies.

¶5. The pertinent provisions relating to the type of loss covered and the maximum amount of liability or limits for loss were set forth in the policies as follows:

INSURING AGREEMENT - WE will pay for LOSS as defined as follows:

EMPLOYEE DISHONESTY - WE will pay for LOSS of MONEY, SECURITIES, and other property which YOU sustain resulting directly from any fraudulent or dishonest act committed by an EMPLOYEE with manifest intent to:

(a) cause YOU to sustain such a LOSS, and;

(b) obtain financial benefit for the EMPLOYEE, or any other person or organization intended by the EMPLOYEE to receive such benefit other than salaries, commissions, fees, bonuses, promotions, awards, profit sharing, pensions, and other ...


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