Summary
This Appellate Division, First Department decision affirms a lower court's grant of summary judgment in favor of StoneX Commodity Solutions, LLC, finding that it suffered a covered physical loss under an all-risk insurance policy after a warehouse operator filed for bankruptcy. The court held that warehouse reports demonstrating insufficient soybean inventory at the relevant facility constituted sufficient evidence of loss, resolving any policy ambiguities against the insurer. Additionally, the court determined the date of loss occurred upon the bankruptcy filing and rejected the insurer's arguments regarding title transfer and the misappropriation exclusion.
Topics
Practice areas
Questions Presented
- Whether the reports and holding certificate satisfy the policy’s requirement of sufficient evidence of the insured interest and title transfer.
- Whether the loss occurred when EGT declared bankruptcy, thereby constituting a physical loss under the all‑risks endorsement.
- Whether the misappropriation exclusion bars coverage under the policy.
Holdings
- The reports and the holding certificate constitute sufficient evidence of the existence of the insured interest and of title transfer for coverage purposes.
- The loss occurred on September 29, 2021, when EGT filed for bankruptcy, satisfying the physical‑loss requirement of the all‑risks policy.
- The misappropriation exclusion does not bar coverage because the dishonest act was not committed by the insured or a party of interest.
Key quotations
“Any ambiguities in an insurance policy must be resolved against the insurer.” (339)
“An all risks policy should be interpreted broadly in favor of the insured.” (354)
Factual background
StoneX held warehouse receipts for soybeans stored with Express Grain Terminals (EGT). EGT filed for bankruptcy in September 2021, causing StoneX to lose control of the soybeans. The insurers argued that the reports submitted by StoneX did not show sufficient quantity of soybeans at the specific Greenwood warehouse. The policy’s Endorsement 5 required a holding certificate from a storage holder as sufficient evidence of the insured interest and title transfer.
Procedural history
The Supreme Court, New York County entered an order on January 8, 2024 granting summary judgment to StoneX on liability for its counterclaims. Endurance American Insurance Company appealed that order. The Appellate Division, First Department reviewed the summary‑judgment order and unanimously affirmed the lower court’s decision.