Levi Strauss & Co. v. Aetna Casualty & Surety Co.

Levi Strauss & Co. (Levi) filed a complaint on a fidelity bond against Aetna Casualty and Surety Company (Aetna), seeking indemnification for losses resulting from the 1977 fraud of one of its employees in Buenos Aires, Argentina. Trial was by jury and Levi was awarded $527,270. Both Levi and Aetna have appealed. We affirm the judgment.

Between 1977 and the 1984 trial, the value of the Argentine peso against the dollar plunged precipitously, from approximately 350 pesos per dollar in April 1977 to 290,720 pesos per dollar in February 1984. As this case illustrates, when the determination of damages requires a court to consider currencies which fluctuate with respect to each other, the choice of date for conversion of the foreign currency can have a significant effect on the amount awarded. In selecting that date, courts generally look either to the rate prevailing on the date judgment was entered (i.e., the judgment-day rule) or to the rate in effect when the breach of contract or duty occurred (i.e., the breach-day rule). We have concluded that the trial court properly determined both that the breach-day rule governed in this case and that the date of breach for…