Ferguson v. Phoenix Assurance Company of New York

Ferguson (plaintiff) was insured against “safe burglary” under a “Storekeepers Burglary and Robbery Policy” issued by Phoenix Assurance Company of New York (Phoenix) (defendant). Ferguson operated a drug store. On the night of March 9, 1960, Ferguson’s store was burglarized by forcing the front door open, as evidenced by tool marks. Actual damage to the premises occurred in the amount of $70.00, and $32.59 in narcotics was taken from a storage drawer. Ferguson’s safe was also broken into and $433.76 was stolen from inside the safe. The safe had two doors. The outer door was locked with a combination lock, and the inner door was locked with a key. During the robbery, the outer door was opened by manipulating the combination lock, and the inner door was opened by punching out the lock. There were no visible marks on the outer door of the safe showing the use of force and violence in gaining access to the safe through this door, but there were visible marks of force and violence on the safe’s inner door. Ferguson’s insurance policy limited recovery for safe burglary to incidents where there is evidence of force and violence consisting of “visible marks made by tools, explosives, electricity or chemicals upon the exterior of (a) all of said doors of such vault or such safe and any vault containing the safe, if entry is made through such doors…” Based on this clause in Ferguson’s insurance policy, Phoenix denied coverage for the money stolen from Ferguson’s safe on the ground that the exterior door showed no visible signs of force and violence, but rather was opened by a manipulation of its combination lock. Ferguson brought suit against Phoenix in Kansas state court seeking recovery for the money taken from his safe. The trial court held that Ferguson was entitled to full recovery under his insurance policy in the amount of $536.35, plus $300.00 for attorney fees. Phoenix appealed.