St. Francis de Sales Federal Credit Union v. Sun Insurance Co. of New York

St. Francis de Sales Federal Credit Union and other credit unions (the credit unions) (plaintiffs) received deposits of checks and contracted with Maine Armored Car (Maine) to transport the checks for processing. A lock box was installed on an exterior wall of the St. Francis de Sales Federal Credit Union building, and the credit unions deposited checks into the box each day for pickup by Maine. Maine purchased an armored-car transportation-insurance policy through Sun Insurance Company of New York (Sun) (defendant). The policy excluded losses arising from theft from the lock box unless a master key, dial rim-lock key, guard key, or combination was used. Annual certificates of insurance were issued to the credit unions through an insurance broker verifying that Sun had issued an insurance policy to Maine. The certificates stated that the policy covered liability for loss or damage from any cause whatsoever to property of customers and did not mention any exclusions relating to theft. A thief broke into the lock box and stole checks. Maine submitted a claim, but Sun denied coverage because access to the lock box was not gained through one of the designated keys. The credit unions were unable to collect judgments recovered against Maine and sued Sun, claiming that the representations in Sun’s certificates upon which the credit unions had relied were fraudulent. The jury found for the credit unions. Sun maintained that there was insufficient evidence of fraud and that Sun was entitled to judgments as a matter of law. The court denied Sun’s motions for judgments as a matter of law. Sun appealed.