Bjorklund v. Aetna Casualty & Surety Co.

OTIS, Justice. The issue raised by this appeal is whether or not an automobile dealer’s loss, occasioned by the felonious conversion and sale of appellant’s vehicles by an employee, is covered by a policy issued to appellant by respondent Aetna. The trial court found the loss was expressly excluded by the terms of the policy and we affirm. [839] The employee, Neil Benedict, prepared new and used automobiles for sale and in so doing he had appellant’s permission to take them from the dealership premises for cleaning. On twelve occasions, Benedict, without the plaintiff’s knowledge or permission, did not return the vehicles, but sold them complete with title documents, and pocketed the proceeds. The Aetna policy issued to appellant Olson contained the following exclusion: This insurance does not apply: ****** (f) Under comprehensive coverage and fire, theft, and supplemental coverage to loss resulting from: (i) Someone causing the named insured to voluntarily part with the covered automobile by trick, scheme, or false pretense * * *. Significantly, appellant was offered insurance which would have included coverage for the losses described but declined to obtain it and chose instead to assume that risk. Jacobson v. Aetna Casualty & Surety Co., 233 Minn. 383, 46 N.W.2d 868 (1951) is cited by appellant as dispositive. There the insured garage owner was approached by a prospective car purchaser who induced the owner to permit him to test drive a car over the weekend. The car was never paid for nor returned. In that case there was excluded from coverage “Under the theft, Larceny, Robbery or Pilferage coverage (if such policy covers these perils) — loss suffered by the Insured in case he voluntarily parts with title to or possession of any automobile at risk hereunder, whether or not induced so to do by any fraudulent scheme, trick, device, or false pretense, or otherwise.” Id. at 384, 46 N.W.2d at 870 (emphasis in original). The trial court in Jacobson held there was coverage and we reversed, holding that the exclusionary clause applied. Much of the discussion in that opinion dealt with the distinction between actual possession, constructive possession, and custody. Here on the other hand, perhaps in response to Jacobson, the policy makes no reference whatever to “possession” but simply excludes coverage whenever the insured is caused to voluntarily part with a vehicle by trick, scheme, or false pretense. We are of the opinion that there is no ambiguity in the language of this policy and that it was the clear intent of the parties that coverage be excluded if the employer was induced to voluntarily part with its vehicles on the false pretense of an employee that he intended to service them whereas his actual purpose was to convert them to his own use. Affirmed.