BREACH OF INSURED WARRANTY TO FENCE IN PROPERTY PROTECTED BY THEFT POLICY DEEMED IMMATERIAL TO THE LOSS, INSURER LIABLE

A federal District Court Judge in the Houston Division of the Southern District of Texas recently concluded that a breach of a policy warranty by a trucking company that its terminals are “100% fenced” was found to be immaterial based on the facts of the loss, and coverage was afforded.  In W.W. Rowland Trucking Co., Inc.  v.  CRC  Services,  Inc.,  No.  4:12-cv-00091  (S.D.  Tex.  January  13,  2013),  Judge  Hughes  granted summary judgment in favor of the insured after finding that the thieves created their own opening in a fence through which a truckload of good was stolen.  And, despite a warranty that the terminal was 100% fenced, the alleged breach of warranty by the insured was immaterial to the loss. Accordingly, summary judgment was granted in favor of the insured.