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Sunday, July 17, 2005

Cases: Policy language trumps employee representation

United_states_flag The provisions of the U.S. Postal Service's insurance contract trump the statements of one of its clerks to a customer, according to a federal district court in New York, and a customer who receives the policy acts unreasonably if he relies on the statements instead of the contract terms.

In the case, Arieh Gildor went to the post office in Cobleskill, New York to mail some gold rings to France.  At the recommendation of an employee, he paid $49 to insure the package for $5,000.  The package was not, in fact delivered, and was returned to Gildor -- but minus the gold rings.  Gildor filed a claim with the USPS, which was denied on the ground that gold jewelry was explicitly excluded from coverage under the policy.  Ultimately, he sued.

His first claim, negligence, was knocked out on sovereign immunity grounds, so he changed his claim to breach of contract.  Trouble was, said the court, the back of the mailing label that Gildor was given listed all the prohibited items, which included both gold and jewelry.  Since gold rings were clearly and unambiguously excluded from the policy, Gildor could not recover.  Gildor then claimed that the post office, through its clerk, misrepresented the insurability of the rings to him.  This, too, was a loser, because negligent misrepresentation is covered by the USPS's sovereign immunity.  Finally, Gildor claimed equitable estoppel, claiming he relied on the statements of the clerk.  But this reliance wasn't reasonable, said the court, since Gildor had been given the actual terms of the policy and should have seen that the goods were excluded.  The court granted the motion for summary judgment.

Gildor v. USPS, 2005 U.S. Dist. LEXIS 13792 (N.D.N.Y., July 12, 2005).

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