Certain Underwriters at Lloyds of London v. Engs Motor Truck Co.

Appellants, Certain Underwriters at Lloyds of London, England, by and through Lead Underwriter Stuart Edward James Fulton (hereafter Underwriters), appeal from summary judgment in favor of respondent Engs Motor Truck Company (hereafter Engs) awarding recovery in the sum of $24,919.37, plus interest ($1,405.05), plus costs of suit ($34.50). We reverse.

We briefly summarize the facts. David Clark bought a truck from Engs. Clark obtained a physical damage insurance policy from Underwriters. Among losses expressly excluded from coverage by the policy was loss resulting from a theft of the vehicle by an employee of the insured. Attached to the policy was a loss payable indorsement, which provided in part; “2. The insurance under this policy as to the interest only of the Lien-Holder shall not be impaired ... by any breach of warranty or condition of the policy, or by any omission or neglect, or by the performance of any act in violation of any terms or conditions of the policy or because of the failure to perform any act required by the terms or conditions of the policy or because of the subjection of the property to any conditions, use or operation not permitted by the…