Cerplex, Inc. v. Chubb Group of Insurance Companies

MEMORANDUM **

Cerplex, Inc. appeals the district court’s summary judgment in favor of the Federal Insurance Companies and Vigilant Insurance Company (collectively “Insurers”) in this diversity action alleging that the defendants breached the all-risk insurance contracts they entered into with Cerplex when they denied its claim that Solution Technology Group, LLC (STG) had stolen its property. We affirm.

(1) It was not error for the district court to conclude that STG’s purloining of the phones after it was entrusted with them was an act of dishonesty which was excluded from coverage under the policy. There was no evidence tending to show that STG had a design to mislead Cerplex at the outset of the relationship. See Freedman v. Queen Ins. Co. of Am., 56 Cal.2d 454, 457 , 364 P.2d 245, 247 , 15 Cal.Rptr. 69, 71 (1961); People v. Petrin, 122 Cal.App.2d 578, 581 , 265 P.2d 149, 150 (1954); People v. Webb, 74 Cal.App.4th 688, 694 , 88 Cal.Rptr.2d 259, 263 (1999).

(2) Similarly, it is clear that a bailment relationship was created between the parties because Cerplex contracted with STG, handed the phones to STG to be repaired and stored, never gave up title to the phones, and…