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A trailer is not a warehouse, says court on Starr policy

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A trailer is not a warehouse covered by an insurance policy, says a federal appeals court in upholding a ruling in favor of Starr Indemnity & Liability Co. in a coverage dispute with a computer wholesaler over a theft.

On Dec. 15, 2013, two women approached a security guard at a warehouse property in Miami owned by Miami-based LaptopPlaza Inc. and asked for assistance with their car, according to court papers in LaptopPlaza Inc. v. Starr Indemnity & Liability Co.

The guard had been instructed to watch LaptopPlaza’s warehouse building and three storage trailers that it had leased for three or four days to hold inventory as it completed a project inside, according to the court papers.

When the guard left to help the women, a thief driving a tractor cab stolen from an adjacent business connected the cab to one of the trailer containing LaptopPlaza merchandise and drove away.

 While the Miami-Dade Police Department ultimately recovered the tractor cab, it has never found the trailer or the stolen goods, according to the court papers. LaptopPlaza calculated it lost $710,684 in the theft.

The firm’s predecessor had purchased a Marine Open Cargo policy from New York-based Starr in 2009, and in November 2013 an endorsement extended the coverage to “cover goods and merchandise which are owned by or held by Assured (LaptopPlaza) … while temporarily detained in warehouses,” according to court papers.

Starr denied LaptopPlaza’s claim in the theft, and the company filed suit against the insurer in U.S. District Court in New York, charging the insurer had breached its policy. The court ruled in Starr’s favor in August 2016.

A three-judge appeals court panel unanimously upheld the lower court’s decision in Friday’s ruling. LaptopPlaza argues the theft is covered by the policy endorsement, but “a trailer is designed for the transportation, and not the storage, of merchandise,” said the ruling.

“LaptopPlaza has offered no persuasive argument that the trailer in this case, which abutted a warehouse but was not permanently attached to it, should be considered a ‘warehouse,’” it said, in affirming the lower court’s ruling.