Recently, the Nebraska Supreme Court was asked to decide whether theft coverage existed for a mover’s refusal to complete the delivery of an insured’s property unless the insured paid the movers additional money, in cash, or by wire transfer.
In Peterson v. Homesite Indem. Co., 287 Neb. 48, 840 N.W.2d 885 (2013), the insured, Dowayne Peterson was insured under a homeowner’s policy issued by Homesite Indemnity Company. Peterson owned a house in Florida. Peterson contacted United States Van Lines of Texas (USVLT) to move his personal property from his existing apartment to his house in Florida. He entered into a moving contract that provided for the disassembly, loading, transport, unloading and reassembly of up to 8,000 lbs. of household goods for an estimated cost of $3,845.37.
Under the contract, the final cost for the move would be determined based on the actual weight of the shipment. If the actual weight of the shipment exceeded the amount specified (8,000 lbs), Peterson would be charged additional monies. Under the moving contract, USVLT was only the “moving coordinator/shipping agent” and was not physically involved in the movement of Peterson’s property. Under the moving contract, there was a requirement stating that Peterson may not receive possession of his goods until all charges were paid in full.
Two men arrived at Peterson’s apartment in a U-haul truck. The men identified themselves as being with USVLT. Because they arrived in a U-haul truck, Peterson was concerned so he contacted USVLT to confirm that the men had been sent by the company to complete the move. Peterson was told that the men were in a U-haul truck because their normal moving truck had broken down. Because of Peterson’s concern, USVLT had Desmond Campbell, the supervisor to the moving men call Peterson to reassure him that the U-haul truck would hold all of Peterson’s property. If the property did not fit in the U-haul truck, Campbell advised that he had arranged for a second truck to load the remainder of Peterson’s property. The men loaded the U-haul truck and proceeded to Florida. They expected to deliver Peterson’s property to his Florida residence on a Sunday.On Saturday night a second truck arrived at Peterson’s apartment to load the remaining items that did not fit in the U‑Haul truck. Throughout the process, Peterson signed numerous documents given to him by the movers. The documents indicated that the movers and their superior, Campbell, were associated with two moving companies based in Georgia: Move Direct Relocation and Advanced Budget Moving & Storage. None of the paperwork signed by Peterson was from USVLT. However, USVLT did confirm that it had sent the movers.
After the personal property was taken by the movers, Campbell informed Peterson that the shipment weighed 4,000 lbs more than estimated and that Peterson owed an additional $5,100. Peterson asked for documentation of the alleged weight of the shipment. As documentation of the weight of the shipment, Campbell shipped four (4) weigh tickets to USVLT which were, in turn, faxed to Peterson. The weigh tickets related to at least three different trucks, but only two of the trucks had been used in the move. One weigh ticket described a semi-trailer, not the small rental trucks and had originated from a weigh station in Indiana. Three of the four weigh tickets had a date prior to Peterson’s move. Due to “these serious discrepancies” Peterson advised Campbell that he would pay an additional amount only after he was satisfied as to the actual weight of the shipment.
To resolve the dispute, Peterson proposed that Campbell meet Peterson’s wife at a weigh station in Florida to verify that Peterson’s shipment was in fact over the estimated weight. This proposal was rejected by Campbell who stated that he would not deliver Peterson’s property unless and until Peterson paid an additional amount in advance of delivery. Although USVLT requested Campbell to comply with Peterson’s request, Campbell refused and reiterated that he would not deliver anything until he got his money. Peterson was advised that the property was being stored in Georgia and would not be delivered until payment had been made. Peterson did not send additional money and never received any of his personal property.
Peterson made a claim with his homeowner’s insurer, Homesite. Although Homesite initially paid $2,000 they later denied the claim. Peterson then sued Homesite for breach of contract and bad faith. In the ensuing lawsuit, Homesite raised as an affirmative defenses that Peterson lost his property as the result of a contract dispute, not theft. The trial court agreed with Homesite.
On appeal, the Nebraska Supreme Court noted that the policy did not define the term “theft.” The policy issued by Homesite was a specific perils policy. Because Homesite failed to define “theft” the Court utilized a broad definition of the term. The Court interpreted the theft provision in the policy to cover any loss of the insured’s personal property caused by an unlawful or wrongful taking with criminal intent. Intent was to be determined from the particular circumstances of each case.
Homesite argued that Peterson had entrusted his property in a bailment. Homesite argued that because Peterson voluntarily gave his property to the movers as part of a bailment, there could be no theft under the policy. Homesite further argued that the existence of a bailment situation necessarily made the dispute between Peterson and the movers a “contract dispute” for which Peterson was not covered. The Nebraska Supreme Court disagreed.
Under a bailment, the person delivering the property for a specific person for a specific purpose (the bailer), had the right to have the bailed property returned to him strictly in accordance with the terms of the bailment contract. If the bailee failed or refused to return the property in the manner expressly required by the contract, the bailee could be liable for conversion or for breach of contract. Under Nebraska law, a bailee who handled bailed property in a manner that was in breach of the bailment agreement, committed conversion. Conversion was an unauthorized or wrongful act of dominion exerted over another’s property which deprived the owner of his property permanently or for an indefinite period of time.
Although the mere fact that Campbell and the movers initially obtained possession of Peterson’s property with his consent, did not preclude the possibility that they may have intended to convert the property for their own use. Peterson delivered possession of his property to Campbell and the movers for a specific purpose, and any action by the movers that was contrary to that purpose went beyond the scope of Peterson’s initial consent and therefore could be a theft.
The Court found that absent a provision specifically excluding conversion from theft coverage, the homeowner policy encompassed theft by conversion. The Court noted that Peterson’s evidence showed that the mover’s actions called into question the movers affiliation with USVLT or any legitimate mover. As an example, the movers presented Peterson with paperwork from two separate moving companies in Georgia, neither of which was registered to do business in Georgia. The telephone numbers provided on the paperwork were disconnected and the addresses on the paperwork corresponded to vacant lots that were for sale. The movers did not offer any paperwork indicating a connection to USVLT. When Peterson asked them for identification, they would not provide it. Within a day of starting the move, the movers called Peterson to delay delivery. A few days later, Campbell called Peterson and demanded additional money. Campbell was charging an exorbitant price for the additional weighted property. Campbell refused to provide Peterson with accurate documentation to support his demand for additional money. The weight tickets provided as evidence of the demand contained many discrepancies.
The Court found that Peterson’s evidence supported an inference that Campbell and the movers acted with criminal intent in obtaining possession of Peterson’s property under the auspices of the legitimate bailment to transfer property. The Court found that it could reasonably be inferred that acquiring possession of Peterson’s property under the auspices of a bailment was the means of gaining leverage that could later be used to make a demand for additional money. The facts supported the inference that Campbell and the movers obtained possession of the property under false pretenses. In that situation, a bailment may not have even been created in the first place. Additionally, the evidence supported inference that Campbell and the movers had no intention of completing the move as required by their bailment agreement.
The Nebraska Supreme Court reversed the grant of the summary judgment in favor of Homesite finding that there were reasonable inferences that Campbell and the movers wrongfully took Peterson’s property with criminal intent when they took the property under the auspices of a bailment and when they refused delivery in an attempt to illicit additional money from Peterson.
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