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Doyle v. Fireman's Fund Ins. Co. (4th Dist. Ct. App. 2018) ___ Cal. App. 5th ___, 2018 DJDAR 2173, Case No. G54197

Tuesday, March 20, 2018


Doyle was a collector of rare, vintage wine.  He insured his collection under a Valuable Possessions policy issued by Fireman's Fund with a $19 million coverage limit.  The policy provided that Fireman's Fund would insure for "direct and accidental loss or damage to covered property caused by 'an occurrence...'"  An occurrence was defined as "a loss to covered property which occurs during the policy period...and is caused by one or more perils we insure against."  The term "loss" was not defined.   With respect to wine, the policy had specific exclusions which did not apply to the loss.

During the years Doyle was insured, he purchased close to $18 million in what he thought was rare, vintage wine from Kurniawan.  However, Kurniawan had apparently been filling empty wine bottles with his own wine blend and attaching counterfeit labels.  Kurniawan was convicted of fraud and Doyle filed a claim with Fireman's Fund for the losses resulting from the fraud.  Fireman's Fund denied coverage on the ground there was no covered loss.  Doyle sued Fireman's Fund alleging breach of contract and other causes of action.  Fireman's Fund filed a demurrer which was sustained without leave to amend.  Doyle appealed.


The appellate court started by citing general California law regarding the applicability of property insurance. Citing Simon Marketing v. Gulf Ins. Co. (2007) 149 Cal. App. 4th 616, the court noted that recovery under property insurance requires a physical loss or damage and that alleged losses that are intangible or incorporeal are not covered. Thus, claims where the insured has suffered only economic loss unaccompanied by a physical alteration of the property is not covered. With specific reference to the Fireman's Fund policy, the court noted that the policy "was insuring against 'direct and accidental loss...'to covered property[.]' The word "loss" modifies the subject phrase "covered property" by way of the preposition "to." Fireman's Fund was insuring against any losses to the wine; Fireman's Fund was not insuring against any losses to Doyle's finances or to his unrealized expectations as to the value of the wine he had purchased. (Citation.)

The appellate court noted that the wine was counterfeit when Doyle purchased it and it remained so throughout the coverage period.  Since diminution in value was not a covered peril, but instead a measure of loss, coverage did not apply.  Furthermore, the lack of the use of the term "physical" in the Fireman's Fund policy did not change the result. Citing the "fundamental nature of property insurance," namely insuring against harm to the property itself as opposed to financial loss, the court stated that "Doyle did not buy a provenance insurance policy; Doyle bought a property policy. 

Finally, Doyle pointed to the fact that the policy did not include a fraud exclusion and argued that  the fraud was covered.  However, the court noted that it was Doyle's burden to first show the loss fell within the insuring language, which he failed to do.  The absence of a fraud exclusion was therefore irrelevant.  In affirming the trial court's judgment in favor of Fireman's Fund, the appellate court offered the following wisdom to Doyle from Shakespeare's Othello: "The robbed that smiles steals something from the thief."  This likely offered little comfort to Doyle.


This ruling is helpful to insurers by clearly stating that property insurance does not apply to mere economic losses suffered by an insured due to the loss of value of physically unaltered property.  When an insured suffers economic loss due to his or her property being worth less than the insured previously believed, coverage does not apply when the property itself has not been physically damaged.  This remains true even when the property policy does not use the word "physical" in describing what constitutes a covered loss.  Finally, interestingly, the court noted in a footnote that the parties settled a related claim regarding a mutual mistake of fact as to the value of what was being insured.  Presumably, the insurer returned some portion of the premium charged.


This opinion is not final. It may be withdrawn from publication, modified upon rehearing, or review may be granted by the California Supreme Court. These events would render the opinion unavailable for use as legal authority.

This publication is intended for informational purposes only and is not intended as legal advice or as a substitute for legal consultation in a particular case or circumstance. Transmission of this information is not intended to create, and receipt does not create, an attorney-client relationship.

Last Updated Sunday, October 21, 2018 - 01:49 AM.