Advanced Network, Inc. v. Peerless Insurance

This is a dispute over insurance coverage under a commercial general liability (CGL) policy Peerless Insurance Company (Peerless) issued to Advanced Network, Inc. (ANI). On appeal, Peerless contends the court erred by finding an underlying action for the replacement of cash stolen by an ANI employee from one of its clients, a credit union, was an action for damages for the “loss of use” of property within the meaning of the policy. We agree with Peerless. “ ‘Loss of use’ of property is different from ‘loss’ of property.” (Collin v. American Empire Ins. Co. (1994) 21 Cal.App.4th 787, 818 [ 26 Cal.Rptr.2d 391 ] (Collin).) As neither the allegations of the underlying complaint nor any extrinsic facts raised any coverage potential, Peerless had no duty of defense or indemnification. We reverse the judgment, which awarded ANI approximately $2 million in compensatory and punitive damages, and direct the court on remand to enter judgment for Peerless.

FACTUAL AND PROCEDURAL BACKGROUND

In May 1997 ANI contracted with Mission Federal Credit Union (Mission Federal) to service the cash distribution machines (CDM’s) in its branch stores. An armored carrier would deliver cash to a…