T.G.S. Transportation, Inc. v. Canal Insurance

MEMORANDUM **

This case arises out of the theft of cargo from appellant T.G.S. Transportation, Inc. (“TGS”). TGS claims that its Motor Truck Cargo Policy (the “policy”), issued by defendant Canal Insurance Company (“Canal”), covers the stolen cargo. The district eourt granted Canal’s summary judgment motion and denied TGS’s. The district court found that the policy did not cover the cargo and that, therefore, TGS’s related claims for bad faith and punitive damages must also be rejected. We reverse and remand.

The plain language of the policy states only that the tráiler must be physically attached to a scheduled tractor for the cargo to be covered. The “loss” of the cargo, for purposes of the policy, occurred at the time the thief attached the scheduled tractor to the trailer and removed the cargo from the lot. Therefore, we conclude that the tráiler was physically attached to a scheduled tractor at the time of the loss. The policy does not limit coverage to circumstances in which a particular person attaches the trailer to the tractor. At best this creates an ambiguity as to how the trailer must be attached. Under California law, this ambiguity must be construed against Canal…