Edwin Cordeiro and Edmund Lewis (Individually and Doing Business as Cordeiro and Lewis Appliances) v. American Home Assurance Company (A Corporation)

Appellants seek to reform an insurance policy to increase the liability limit. In the alternative they seek to estop the issuing company from denying the greater coverage.

The District Court rendered judgment for the company essentially upon issues of fact relating to the needs of the insureds, the company’s knowledge of those needs and the expectations of the insureds in light of their needs and the company’s representations. Upon these issues the court found for the company, concluding that any mistake as to coverage was neither mutual nor known to the company and that estoppel was not available. The court’s findings were not clearly erroneous and its conclusions were without error.

Appellants attack the form of policy, contending that they were, by its terms, paying premiums for a greater coverage than its limits provided and that the limitation was contrary to public policy.

The insurance policy was of a type known as “Reporting Form Block Coverage” and the insurance provided was against loss of store inventory. An absolute liability limit of $25,000 was provided. The amount of premium paid depended on the amount of inventory reported each month and the company’s liability…