HomeMy WebLinkAbout00-06496
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IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY,
PENNSYL VANIA
HOFFMAN MATERIALS, INC.,
Plaintiff.
vs.
,;(()(x) -(it q (p
NO, CIVIL TERM
TRAVELERS CASUALTY AND
SURETY COMPANY,
Defendants,
ACTION FOR
DECLARATORY
JUDGEMENT
NOTICE
You have been sued in court. If you wish to defend against the claims set forth in
the following pages, you must take action within twenty (20) days after this complaint and
notice are served, by entering a written appearance personally or by attorney and filing in
writing with the court your defenses or objections to the claims set forth against you. You
are warned that if you fail to do so the case may proceed without you and a judgment may
be entered against you by the court without further notice for any money claimed in the
complaint or for any other claim or relief requested by the plaintiff. You may lose money
or property or other rights important to you.
You should take this paper to your lawyer at once. If you do not have a lawyer or
cannot afford one, go to or telephone the office set forth below to find out wh!:l'e you can get
legal help. .
CUMBERLAND COUNTY BAR ASSOCIATION
2 LIBERTY AVENUE
CARLISLE, PA 17013
(717) 249-3166
Steven 1. Fish , squire
Attorney 10# 16269
FISHMAN & MORGENTHAL
Attorney for Plaintiff
95 Alexander Spring Rd" Suite3
Carlisle, P A 17013
(717) 249-6333
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IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY,
PENNSYLVANIA
HOFFMAN MATERIALS, INC.,
Plaintiff,
vs,
()V- Go '/9t:.
NO. CIVIL TERM
TRAVELERS CASUALTY AND
SURETY COl\1P ANY,
Defendants,
ACTION FOR
DECLARATORY
ruDGEMENT
COMPLAINT
The Plaintiff, Hoffman Materials, Inc" hereby makes claim for declaratory and
monetary relief in connection with employee dishonesty and theft coverage provided by
the defendant, Travelers Casualty and Surety Company, and avers the following:
1. Plaintiff, Hoffman Materials, Inc., is a Pennsylvania Corporation
authorized to do business in the Commonwealth of Pennsylvania, with its
principal place of business located at 321 Cherry Street, Carlisle,
Cumberland County, Pennsylvania,
2. Defendant Travelers Casualty and Surety Company, is an insurance
company doing business under the laws of the Commonweyth of
Pennsylvania, with a place of business at 5001 Louise Drive,
Mechanicsburg, Cumb~rland County, Pennsylvania.
3. Plaintiff is a processing company that, in the course of its business,
imports quartz stones from Russia, The quartz stones are cut and polished
and used in cellular phones, pagers, satellite base stations and other
products.
4. In October of 1998, Plaintiff discovered that a number of quartz stones
were missing from a secure storage garage at Plaintiff's principal place of
business.
5. At the time of the discovery of the missing stones Plaintiff had in place
several insurance policies with Defendant, including the policy numbered
57 BY 10086541 BCA, which provided employee dishonesty coverage
and the policy numbered Y-630-370N8034-TIL-98, which provided theft
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coverage. A copy of the relevant portions of said contracts are attached
hereto and incorporated herein by reference thereto as exhibits I and 2.
,
6. After the discovery of the loss, Plaintiff conducted an investigation
including an inventory of quartz stones.
7. Plaintiff initially concluded that 700 quartz stones were missing valued at
$238,904.04.
8. Defendant subsequently determined through its agent RGL Gallagher,
P. C. that 281 quartz stones, valued at $118,773,07, were missing. Plaintiff
concurs with this determination.
9. Plaintiff filed employee dishonesty and theft claims with Defendant on
November 20, 1998, A copy of which is attached hereto and incorporated
herein by reference thereto as exhibit 3.
10. By letter dated June 7, 1999, attached hereto and incorporated herein by
reference thereto as exhibit 4, Defendant declined employee dishonesty
coverage and by letter dated June 28, 1999, attached hereto and
incorporated herein by reference thereto as exhibit 5, Defendant declined
theft coverage.
COUNT I
11. Paragraphs 1 through 10 above are incorporated herein by. r.eference,
12. The employee dishonesty coverage, as more fully described in the
"employee dishonesty coverage form" attached hereto as exhibit 1,
provides for losses to "property other than money and securities" caused
by employee dishonesty.
13. The Plaintiff may maintain a claim for recovery oflosses against Travelers
Casualty and Surety Company under the insurance policy in question as an
employee dishonesty loss,
WHEREFORE, Plaintiff, Hoffman Materials, lnc, respectfully requests
that the Court enter an order:
(a) declaring that Defendant, Travelers Casualty and Surety
Company, pay Plaintiff, Hoffman Materials, Inc., the sum of
$118,773.07.
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(b) awarding counsel fees, interest, delay damages and costs to the
Plaintiff; and
( c) directing such other and further relief as may be appropriate.
COUNT II
14. Paragraphs 1 through 10 above are incorporated herein by reference.
15. The theft coverage, as more fully described in the "Deluxe Property
Coverage Form" attached hereto as exhibit 2, provides coverage for theft
losses of "stock" and "all other personal property" owned by insured and
used in the insured's business.
16. The Plaintiff may maintain a claim for recovery oflosses against Travelers
Casualty and Surety Company under the insurance policy in question as a
theft loss,
WHEREFORE, Plaintiff, Hoffman Materials, Inc. respectfully requests
that the Court enter an order:
(a) declaring that Defendant, Travelers Casualty and Surety
Company, pay Plaintiff, Hoffman Materials, Inc., the sum of
$118,773.07.
(b) awarding counsel fees, interest, delay damages and costs to the
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Plaintiff; and
(c) directing such' other and further relief as may be appropriate.
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Steven 1. Fishman, Esquire
Attorney J.D. # 16269
FISHMAN & MORGENTHAL
95 Alexander Spring Road, Suite 3
Carlisle, PA 17013
(717) 249-6333
Attorney for Plaintiff, Hoffman
Materials, Inc.
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VERIFICA nON
!, Judy K. Brill, verify that the statements made in this Complaint are true and
correct. [understand that false statements herein are made subject to the penalties
of 18 Pa Cons. Stat. Ann. 94904, relating to unsworn falsification to authorities.
Date: September 18, 2000
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CROOOll090
EMPLOYEE DISHONESTY COVERAGE FORM
(Coverage Form A-Blanket)
A. COVERAGE
We will pay for loss of, and loss from damage la,
Covered Property resulting directly from the Covered
Cause of Loss.
1. Covered Property: 'Money", 'securities', and
'property other than money and securities'.
2. Covered Cause of Loss: 'Employee
dishonesty".
3. Coverage Extension
Employees Temporarily Outside Coverage
Territory: We wfll pay for loss caused by any
'employee' while temporarily outside the
territory specified in the Territory Genera!
Condition for a period not more than 90 days.
B. UMIT OF INSURANCE
The most we will pay for loss in anyone
'occurrence' is the applicable Umit of Insurance
shown in the DEClARATIONS.
C. DEOUCTlBLE
1. We will not pay for loss in anyone 'occurrence'
unless the amount of loss exceeds the
Deductible Amount shown in the
DECLARATIONS. We wiflthen pay the amount
of loss in excess of the Deductible Amount. up
to the Umit of Insurance.
2. You must:
a. Give us notice as soon as possible of any
loss of the type insured under this Coverage
Fonn even though it falls entirely within the
Deductible Amount.
b. Upon our request. give us a statement
describing the loss.
D. ADDITIONAL EXCLUSIONS, CONDITlON AND
DEANITlONS: tn addition to the provisions in the
Crime General Provisions, this Coverage FORn is
subject to the following:
1. Additional Exclusions: We will not pay for loss
as specified below:
a. Employee Cancelled Under Prior
Insurance: loss caused by any 'employee'
of yours, or predecessor In interest of yours,
for whom similar prior insurance has been
cancelled and no! reinstated since the last.
such cancellalion.
b. Inventory Shortages: Joss, or that part of
any loss, the proof of which as to its
existence or amount is dependent Upon:
(1) An inventory computation; or
(2) A profit and loss computation.
2. Additional Condition
Cancellation As To Any Employee: This
Insurance is canc:elled as to any 'employee':
a. Immediately upon discovely by:
(1) YoU; or
(2) Any of your partners, offICers or
directors not in collusion with the
'employee';
of any dishOnest act committed by that
"employee' whElther before or alter
becoming employed by you.
b. On the date specified In a notice mailed to
you. That dale wrn be least 30 days after lhl
dale of mailing.
The mailing of notice to you at the last
mailing addl'8$S known to us wl1l be
sufficient proof of notice. Delivery of notice i
the same as mamng.
3. Additional DefinItions
a. "Employee Dishoriesty" in paragraph A2,
means only di$honest acts committed by an
"employee', wb!!thElrlcfentilied or not, acting
alone or In coIIuSiOhwitlHilhilr perSons,
except you or a partner, W1lh the manifest
intent to: /
(1) Cause you to sustain loss; and also
(2) Obtain fll18llCial benefit (other than
emplo)'9 benefits earned In the .nonnal
course of employment, 1ncIucfmg: .
salaries, commissions, fees. bonuses,
promotions, awards, profit sharing or
pensions) lor:
(a) The 'employee'; or
(b) Any person or organization inlende<
by the 'employee" to receive that
benefit
b. 'Occurrence" means all loss caused by, or
involving, one or more 'employees', whethe
the result of a single act or series of acts.
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DELUXE PROPERTY COVERAGE FORM
Various provisions in this policy restrict coverage. Readthe entire policy carefully to determine rights, duties and
what is and is not covered.
Throughout this policy the words "you" and "your" refer to the Named Insured shown in the Declarations. The
words "we", "us" and "our" refer to the Company providing this insurance,
OIher words and phrases that appear in quotation marks have special meaning, REFER TO SECTION 1.- DEFINI.
TIONS. .
A. COVERAGE
We will pay for direct physical loss of or damage
to Covered Property caused by or resulting from a
Covered Cause of Loss.
1. Covered Causes of Loss
Covered Causes of Loss means RISKS OF
DIRECT PHYSICAL LOSS unless the loss is:
Excluded in Section B., Exclusions;
Limited in Section C., Limitations; or
Excluded or limited in the Declarations or by
endorsements:
2. Covered Property
Covered Property, as used in this Coverage
Part, means the following types of property
described in this section A.2,. and limited in
A.3" Property and Costs Not Covered, if a
Limit of Insurance is shown in the Declara-
tions for that type of property,
a. Building(s), means the designated build-
ings or structures at the premises de-
scribed in the Declarations, including:
(1) Completed additions;
(2) Fixtures, including outdoor fixtures;
(3) Machinery and equipment pllrma-
nently attached to the building;
(4) Personal property owned by you that
is used 10 maintain or service the
buildings or structurlls or its grounds,
including:
(a) Fire extinguishing equipment;
(b) Outdoor fumiture;
(c) Floor coverings;
(d) Lobby and hallway fumishings
owned by you;
(e) Appliances used for refrigerating,
ventilating, cooking, dishwashing
or laundering;
(f) Lawn maintenance and snow re-
moval equipment; and
(g) Alarm systems,
(5) If not covered by other insurance:
(a) Alterations and repairs to the
buildings or structures; and
(b) Materials, equipment, supplies
and temporary structures, on or
within 1,000 feet of the described
premises, used for making altera-
tions or repairs to the buildings or
structures,
b. Your Business Personal Property lo-
cated in or on the designated buildings at
the premises described in the Declara-
tions or in the open (or in a vehicle) within
1,000 feet of the described premises, con-
Sisting of the following unless otherwise
specified on the Declarations;
(1) Furniture and fixtures;
(2) Machinery and equipment;
(3) "Stock";
(4) All other.personal property owned by
you and used in your business;
(5) Labor, materials or services furnished
or arranged by you on personal prop-
erty of others;
(6) Your use interest as tenant in im-
provements and bettennents, Im-
provements and betterments are fix-
tures, allerations, installations or addi.
tions:
(a) Made a part of the buildings or
structures you occupy or lease
but do not own; and
(b) you acquired or made at your ex-
pense, but are not permitted 10
remove; and
Ox T1 00 03 98
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Page 1 of 20
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TravelersPropertyCasualty J
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PROOF OF LOSS
HOTE
Furnishing of Proof of Leu forms. kI wlthol
preJudice. All rlghm 2nd d"~Q .,. ""'.rv{
and the CIJltdltJons of the BONO or POUCY at
not wVvtld. Whe", nOfldod add/Uona' ~gf:
shollld be used to provide the ruqU8.stf:
Infonnatlon.
Any person who knowingly and with the intent to defraud any insurance company or other person files an application for
insurance or a statement of claim containing any materially false information, or conceals for the purpose of misleading,
information concerning any tact material thereto commits a fraudulent insurance act.. which is a crime and subjects such
person to criminal and civile penalties.
I
BLANKET CRIME, THREE D AND OTHER FIDEUTY BOND COVERAGE
BOND OR POUCY NO.
S1 i3Y /0 t',J(,;56 Lj; ,j C;-!
THIS AFFIDAVIT is EXECUTED SY
~uoJ K enl!
NAME OF iNSURED
;..k i::::F/vl ,1 it! IVl f! TE.i:- /A. L's,: / #' c
in the following capacity: (check one
p{ Officer of the insured corporation, whose title is
o Partner of the insured partnership
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1/,' p, \U'~ e>-
o The individual named as insured
WHO HEREBY ATTEST TO THE FOLLOWING:
. I
1, This loss is due to (check one) ~ Dishonesty of the insured's employee(s) whose name(s) and positions are:
!J"l_v:)L~,V c,+ ././"S nfh"'. II/dInPS Wt'r<:. f/ffl/id- <I io -r;:.r:;vele.r:
f'h t.j/9!Cfc: '.-LA,' fh';,,!-",] It/I- !-l/ou/d hve (.,Cc.JlS,:S
Sf[:.' 2"1 J)'-0p~,-N. -
o Burglary or other theft from insured's premises 0 DestructIon or disappearance at the insured's premises
o RobberY or other theft from
acting as messenger while away from the insured's premises.
(name of person)
o Other cause as follows:
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3. THE CIRCUMSTANCES UNOE~ WHICH THE LOSS TOOK PLACE, WITH RELEVANT DATES
Date Insured learned of Loss
;u bs ,I 9 S'
Date loss reported to Insurwlce C
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I BONe, OR POLICY NO. NAME OF INSURED
. /]6 V!u() J6:5' (/1 / DCA ,L); ( (' I~ L J rll1 r e~ 1/( L S, IN C
4. The loss in the amount of S / / tJ, (,I S- S.,. , and is set forth in the following itemized statement
(attached documentary evidence which supports and explains any ane or more of the items):
DATE
DESCRIPTION
5.0:.. ~i..J7c.. ch <'2. cf '
AMOUNT
TOTAL
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CchcLu c.-t Ih;,,~{) - f q r -Iy Ve /I fi
II.' 'is all .::P/'I /f 7". /J Coftj
re..pcr+ u.;tZ--.S f(-e.V'bkS/f:c:..t
but A/O T Ore U /d it) -w cl <z -f-
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to
IItfh C! P-
6+- ).h,S
es r( ",l
T otalloss >
CREDITS >
Salary' >
Commission >
Any other ,
>
Total Credrts >
Net Loss >
.,.
Less Oeductibles, if any >
Amount Claimed >
(Attlch ilddltJomli shfHICl If furthfJr spaco Is needed)
5. There IS no other suretyship or Insurance applicable except
(1) ;(-1 t/ - ':'" -.S j) e /I..( :<: " Ie.
! I r,
7"/);-11" Cr.:h?'v.."e
CL-J! 1/;5, ./=1=8 E Z- '-/ I
(2)
DATE
S/:?-/ /ft{
Notarial seal
Car1Jsle ?ora. Cumbe'rtand ountylC
My CommlssJon Expires June 3. 2000
DATE SUBSCRIBED NO SWORN
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Cath~ne Squillace, Esq.
Manager. Bond Claim
2SS0 Eisenhower Avenl/e
Trooper. PA 19403
Phone: (610) 650-6440
Fax: (610) 6S0.6446
June 7, 1999
Ms, Judy Brill
P,R. Hoffman Materials Processing Corp.
321 Cherry Street
Carlisle, PA 17013
Re: Employee Dishonesty Claim
Our Insured: P.R. Hoffman Materials Processing Corp.
Principal: Unidentified
Our Policy No.: 57 BY 100865641 DCA
Our Claim No.: 4 FC 678220 NR
Dear Ms. Brill:
We acknowledge receipt of your company's Proof of Loss, dated May 21, 1999. After review of the
Proof of Loss, as well as the report.ofRGL Gallagher, we regret to advise we must deny your
company's claim, The reasons for our position are set forth below;
The claim arises from the disappearance of approximately 281 crystal stones between June 1998 and
December of 1998, The discovery of the missing stones was the result of conducting 3 physical
inventories of the "perpetual inventories" maintained by your company at that time. In support of the
claim, we have been provided a swnmary of the missing stones. The Proof of Loss further indicates
reliance on the report of Travelers' accountants.
Travelers Casualty and Surety Company issued Crime Policy 57 BY 100865641 BCA to PR Hoffman
Materials Processing Corp" with effective dates of February 2, 1998 to February 2, 2000. The
Employee Dishonesty Coverage Fonn (Coverage Fonn A - Blanket), contaitlS'the follo\ving pertinent
provision:
D. ADDITIONAl EXCLUSIONS, CONDITION AND DEFINITIONS: In addition to the
provisions in the Clime General Provisions, this Coverage Fonn is subject to the
following:
1. Additional Exclusions: We will not pay for loss as specified below:
.
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b. Inventory Shortages: loss, or that part of any loss, the proof of which as
to its existence or amount is dependent upon:
(1) An inventory computation; or
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(2) A profit and loss computation,
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Based on the information you previously provided at our meeting on April 9, 1999, and the information
in the Proof of Loss, it appears that this loss has been solely calculated on an inventory shortage, We
previously advised that ifHoffinan established, wholly apart from such computations, that Hoffinan
has sustained a loss covered WIder this policy, then you may offer your inventory records and an actual
physical COWlt of inventory in support of other evidence as to the amoWlt ofloss claimed,
Unfortunately, no aaditional evidence has been submitted,
The Employee Dishonesty Coverage Form (Coverage Form A - Blanket), also contains the following
pertinent provisions:
A. COVERAGE
We will pay for loss of, and Joss from damage to, Covered Property resulting directly
from the Covered Cause of Loss.
1, Covered Property: "Money", "securities", and "property other than money and
securities",
2. Covered Cause of Loss: "Employee dishonesty",
3. Coverage Extension
Employees Temporarily Outside Coverage Territory: We will pay for loss
caused by any "employee" while temporarily outside the territory specified in the
Territory General Condition for a period not more than 90 days,
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3. Additional Definitions
<"
a, "Employee Dishonesty" in paragraph A,2 means only dishonest acts
committed by an "employee", whether identified or not, acting alone or in
collusion with other persons, except you or a partner, with the manifest
intent to:
(1) Cause you to sustain loss, and also
(2) Obtain financial benefit (other than employee benefits earned in the
normal course of employment, including salaries, commissions, fees,
bonuses, promotions,awards, profit sharing or pensions) for:
(a) The "employee"; or
(b) Any person or organization intended by the "employee" 10 receive
that benefit.
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In the General Conditions part of the policy, "Employee" is defined as follows: '-.
C, GENERAL DEFINITIONS
1, "Employee" means:
a, Any natural person:
(1) While in your service (and for 30 days after termination of service); and
(2) Whom you compensate directly by salary, wages or commissions; and
(3) Whom you have the right to direct and control while performing services
for you; or
b, Any natural person employed by an employment contractor while that
person is subject to your direction and control and performing services for
you excluding, however, any such person while having care and custody of
property outside the "premises".
But "employee" does not mean any:
(1) Agent, broker, factor, commission merchant, consignee, independent
contractor or representative of the same general character; or
(2) Director or trustee except while performing acts coming within the scope of
the usual duties of an employee."
The Proof of Loss, the report ofRGL Gallagher, and the interviews with the employees on April 9, 1999, do no
provide sufficient evidence to establish that the disappearance of the stones was caused through the dishonest ac
of an employee (or employees), In your prior correspondence on this claim, you have requested that we provide
you with a copy of the RGL Gallagher Report that was conunissioned by Travelers. Although we do not belie,,,
that we have a legal obligation to provide said report, we are attaching a copytlerewith in order that it may assi,
you in your inventory control procedures in the future,
We regret that we could not have reached a more favorable resolution to your claim, Please feel free to call me
with any questions that you may have,
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Travelers continues to fully reserve all rights, remedies, and defenses in this matter, including, but not'
limited to the right to raise any additional tenns, conditions and exclusions as defenses to coverage
should they later be determined to apply. Neither this letter, nor any actions by Travelers or any of its
agents, shall constitute, or be deemed a waiver, estoppel, admission ofliability or prejudice of any kind
to our rights and defenses under the Policy, by law, or otherwise,
Very truly yours,
TRAVELERS CASUALTY AND SURElY COMPANY of' AMERICA
cc: Mike Miller, Darr-Thuma Insurance (via fax)
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A member of CItIgroup
PO I30x :HZlI
8e11J/e/.em, PA 18017
(810) 691-8103
Ft1x: (610) 691-8110
,
POBox 3429
Bethlehem, PA 18017
June 28, 1999
Judy K. Brill, CPA
Controller
Hoffinan Materials Ine,
321 Cherry Street
Carlisle, PA 17013
INSURED:
DATE OF LOSS:
FILE NUMBER:
HOFFMAN MATERIALS
6/30/98
BEZ 4192
Dear Judy Brill:
We acknowledge receipt of the above captioned claim which was first reported to our company
on November 20, 1998.
Our investigation indicates that after conducting a physical inventory of raw materials in
October 1998, approximately 350 seeded quartz stones valued at approximately $118,773 were
found to be missing from a storage bay that is detached from the main facility. Our
investigation also indicates that the doors to the subject storage facility were locked and that
there is no physical evidence of burglary to the storage building.
We regret to inform you that your policy does not provide coverage for this loss. We direct
your attention to the policy of insurance you carry with our company 1JJ1d&o the Deluxe
Property Coverage Form DXT 100 (00/94) under letter C, Limitations, number I, letter c
which states: '
C. Limitations
The following limitations apply to all policy forms and endorsements unless
otherwise stated.
1. We will not pay for loss of or rlllmllge to property, as described and limited in
this section. In addition, we will not pay for any loss that is a consequence of
loss or damage as described or limited in this section.
c. Property that is nUssing, where the only evidence of the loss or damage
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is a shortage disclosed on taking inventory, or other instances where
there is no physical evidence to show what happened to the property .
This limitation does not apply to propetty in the custody of a carrier for
hire.
If you have any questions regarding our coverage position, please feel free to contact me at
(610) 691-8103,
Travelers Property Casualty continues to fully reserve all rights, remedies and defenses in this
matter, including but not limited to the right to raise any additional terms, conditions or
exclusions as defenses to coverage should they later be determined to apply. Neither this
letter, nor any actions by Travelers Property Casualty or any of its agents, shall constitute, or
be deemed a waiver, estoppel, admission of liability or prejudice of any kind to our rights and
defenses under policy number 630 370N0834, by law or otherwise.
Very truly yours,
?~Jh
Robert D. Hughes
General Adjuster
cc:
Mr. Michael Miller
Darr- Thuma
95 Alexander Spring Road
Carlisle, PA 17013
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SHERIFF'S RETURN - REGULAR
CASE NO: 2000-06496 P
COMMONWEALTH OF PENNSYLVANIA:
COUNTY OF CUMBERLAND
HOFFMAN MATERIALS INC
VS
TRAVELERS CASUALTY AND SURETY
DAVID MCKINNEY
, Sheriff or Deputy Sheriff of
Cumberland County, Pennsylvania, who being duly sworn according to law,
says, the within COMPLAINT & NOTICE
was served upon
TRAVELERS CASUALTY AND SURETY COMPANY
the
DEFENDANT
, at 0013:55 HOURS, on the 27th day of September, 2000
at 5001 LOUISE DRIVE
MECHANICSBURG, PA 17055
by handing to
RONALD KINSEY (BOND
MANAGER)
a true and attested copy of COMPLAINT & NOTICE
together with
and at the same time directing His attention to the contents thereof.
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Sheriff's Costs:
Docketing
Service
Affidavit
Surcharge
18.00
8.68
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R. Thomas Kline
09/28/2000
FISHMAN & MORGENTHAL
Sworn and Subscribed to before
By:
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DRINKER BIDDLE & REA TH LLP
By: John F, Schultz
Attorney LD, No, 67331
One Logan Square
18th & Cherry Streets
Philadelphia, PA 19103-6996
(215) 988-2700
HOFFMAN MATERIALS, INe.,
COURT OF COMMON PLEAS
CUMBERLAND COUNTY
PENNSYLVANIA
Plaintiff,
v,
No, 2000-6496
TRAVELERS CASUALTY AND
SURETY COMPANY,
Defendant.
TO THE PROTHONOTARY:
Pursuant to 28 U,S,C, S l446(d), Defendant Travelers Casualty and Surety Company, by
its attorneys, files herewith a certified copy of the Notice of Removal filed in the United States
District Court for the Middle District of Pennsylvania on Octob 16,2000,
Dated: October /S',2000
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NOTICE OF JUDICIAL ASSIGNMENT
This case has been assigned to the Judicial Officer indicated below, Counsel and all parties are
advised that there is an Office of the Clerk in the Federal Courthouses in Scranton, Harrisburg and
Williamsport, Pennsylvania, Please me all pleadings directly with the Clerk's Office in which the
Judicial Officer is stationed, Do not file any courtesy copies with the court.
In accordance with the local rules, counsel will file the original and two copies of aU pleadings,
motions, memoranda and other documents except discovery material, with the Clerk's Office.
Counsel should file any additional copies with the Clerk's Office as may be required by the Local
Rules, an Order of Court, or as required by the assigned Judicial Officer listed below.
JUDICIAL ASSIGNMENT
CLERK'S OmCE ADDRESS
_ Judge Thomas 1. Vanaskie
Judge James M. Munley
_ Judge William J. Nealon
William J. Nealon Federal Building &
V.S, District Courthouse
235 N. Washington Avenue
P.O. Box 1148
Scranton, Pennsylvania 18501
(570) 207-5600
_ Judge A. Richard Caputo
.. Judge Richard P. Conaboy
Judge Edwin M. Kosik
_ Judge Sylvia H. Rambo
-f- Judge Yvette Kane
. Judge William W. Caldwell
U.S. District Courthouse
228 Walnut Street
P.O. Box 983
Harrisburg, Pennsylvania 171 08
(717) 271-3920
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_ Judge Malcolm Muir
u.s. District Courthouse
240 W. Third Street
P.O. Box 608
Williamsport, Pennsylvania 17701
(570) 323-6380
_ Judge James F. McClure
NOTE: Tms case has been referred to the D.S, Magistrate Judge noted below, Please file all
documents at the location indicated.
_ Magistrate Judge J. Andrew Smyser
Harrisburg Address
_ Magistrate Judge Raymond J. Durkin
Scranton Address
Magistrate Judge Thomas M, Blewitt
Scranton Address
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IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
HOFFMAN MATERIALS, INC.,
Plaintiff,
: CIVIL ACTION
1,:;' c'v- 00-1856
v,
No,
NOTICE OF REMOVAL
FILED
HARRISBURG
OCT 1 B 2000
MARY i' . CI.ERK
,.."
TRAVELERS CASUALTY AND
SURETY COMPANY
Defendant.
Defendant Travelers Casualty and Surety Company ("Travelers"), by its attorneys, hereby
removes this action from the Court of Common Pleas, Cumberland County, Commonwealth of
Pennsylvania, to the United States District Court for the Middle District of Pennsylvania and sets
forth the following in support of its notice:
Jurisdiction
I, This is a civil action over which this Court has original jurisdiction under the
provisions of28 U.S.c. ~ 1332, and may be removed to this Court by defendant Travelers
....
pursuant to provisions of28 U,S,C, ~ 1441 because it is a civil action between citizens of
different states and the matter in controversy herein exceeds the sum of Seventy-Five Thousand
Dollars ($75,000,00), exclusive of interest and costs,
2, Defendant Travelers states upon information and belief that plaintiff Hoffman
Materials, Inc, ("Hoffman") was a Pennsylvania corporation at the time this action was filed in
state court, and still is, a citizen and resident of Pennsylvania, residing at 321 Cherry Street,
Carlisle, Cumberland County, Pennsylvania,
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3, Defendant Travelers was, at the time this action was filed in state court, and still
is, a corporation duly organized and existing under the laws of the State of Connecticut with its
principal place of business at One Tower Square, Hartford, Connecticut 06182
and was not and is not a citizen of the State of Pennsylvania,
4, The amount in controversy, based on the specific demand in the Complaint, is at
least $118,773,07, which exceeds the jurisdictional threshold of $75,000,00,
Grounds for Removal
5, This action was filed by plaintiff on or about September 25, 2000 in the Court of
Common Pleas, Cumberland County, Commonwealth of Pennsylvania, and was captioned
Hoffman Materials. Inc, v. Travelers Casualty and Surety Company. No. 2000-6496,
6, Complete diversity of citizenship exists between the parties as Plaintiff Hoffman
is a citizen of Pennsylvania and Defendant Travelers is a citizen of Connecticut.
7. This notice of removal is being filed within thirty (30) days of Defendant
Travelers first receiving plaintiff's Complaint in this action and, therefore, is timely filed under
28 U.S.C. 1446(b),
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8. The only process, pleading or order which Defendant Travelers has received in
this action is plaintiff's Complaint, a copy of which is attached hereto as Exhibit "A".
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9, Defendant Travelers is, concurrently with the filing of this Notice of Removal,
providing notice of removal to the Court of Common Pleas of Cumberland County,
Pennsylvania,
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Dated: October 16,2000
/
David Abernethy
Attorney LD, No, 36666
John F, Schultz
Attorney LD, No, 67331
(Seeking Admission Pro Hac Vice)
DRINKER BIDDLE & REATH LLP
One Logan Square
18th & Cherry Streets
Philadelphia, PA 19103-6996
(215) 988-2700
Attorneys for Defendant
Travelers Casualty and Surety Company
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CERTIFICATE OF SERVICE
I, John F, Schultz, Esquire, hereby certiJy that today 1 caused a true and correct copy of
the foregoing Notice of Removal to be served on the following by first class mail, postage
prepaid:
Steven J, Fishman, Esquire
FISHMAN & MORGENTHAL
95 Alexander Spring Road, Suite 3
Carlisle, PA 17013
Dated: October 16, 2000
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IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY,
PENNSYL VANIA
HOFFMAN MATERIAIS, INC.,
Plaintiff,
vs,
,,2CO:J- (,'lq~
NO, CIVIL TERM
TRAVELERS CASUALTY AND
SURETY COMPANY,
Defendants,
ACTION FOR
DECLARATORY
JUDGEMENT
NOTICE
You have been sued in court. If you wish to defeud against the claims set forth in
the following pages, you must take action within twenty (20) days after this complaint and
notice are served, by entering a written appearance personally or by attorney and filing in
writing with the court your defenses or objectious to the claims set forth against you. You
are warned that if you fail to do so the case may proceed without you and a judgment may
be entered against you by the court without further uotice for any money claimed in the
complaint or for any other claim or relief requested by the plaintiff. You may lose money
or property or other rights important to you.
You should take this paper to your lawyer at once. If you do not hav~ lawyer or
cannot afford one, go to'or telephone the office set forth below to find out where you can get
legal help.
CUMBERLAND COUNTY BAR ASSOCIATION
2 LIBERTY AVENUE
CARLISLE, PA 17013
(717) 249-3166
lRUE copy FROM ~~:~
In Testimony Wll8reot~. , ~ra u Carl\S\e. Pa.
and the ~ ol said ~ ~rlfrx)
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Steven J, Fislima , e
Attorney lD# 16269
FISHMAN & MORGENTHAL
Attorney for Plaintiff
95 Alexander Spring Rd., Suite3
Carlisle, P A 17013
(717) 249-6333
IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY,
PENNSYLVANIA
HOFFMAN MATERIALS, INe.,
Plaintiff,
vs,
NO.
CIVIL TERM
TRAVELERS CASUALTY AND
SURETY COMPANY,
Defendants,
ACTION FOR
DECLARATORY
JUDGEMENT
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COMPLAINT
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The Plaintiff, Hoffman Materials, Inc" hereby makes claim for declarat&y~~nd [:~,
monetary relief in connection with employee dishonesty and theft coverage provid~ b~~
the defendant, Travelers Casualty and Surety Company, and avers the following:
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1. Plaintiff, Hoffman Materials, Inc" is a Pennsylvania Corporation
authorized to do business in the Commonwealth of Pennsylvania, with its
principal place of business located at 321 Cherry Street, Carlisle,
Cumberland County, Pennsylvania,
2, Defendant Travelers Casualty and Surety Company, is an insurance
company doing business under the laws of the Commonwealth of
Pennsylvania, with a place of business at 5001 Louise Drive,
Mechanicsburg, Cumherland County, Pennsylvania,
3, Plaintiff is a processing company that, in the course of its business,
imports quartz stones from Russia. The quartz stones are cut and polished
and used in cellular phones, pagers, satellite base stations and other
products,
4. In October of 1998, Plaintiff discovered that a number of quartz stones
were missing from a secure storage garage at Plaintiff's principal place of
business.
5. At the time of the discovery of the missing stones Plaintiff had in place
several insurance policies with Defendant, including the policy numbered
57 BY 10086541 BCA, which provided employee dishonesty coverage
and the policy numbered Y-630-370N8034-TIL-98, which provided theft
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coverage, A copy of the relevant portions of said contracts are attached
hereto and incorporated herein by reference'thereto as exhibits 1 and 2,
6. After the discovery of the loss, Plaintiff conducted an investigation
including an inventory of quartz stones,
7. Plaintiff initially concluded that 700 quartz stones were missing valued at
$238,904,04,
8, Defendant subsequently determined through its agent RGL Gallagher,
P:C, that 281 quartz stones, valued at $118,773,07, were missing. Plaintiff
concurs with this determination,
9, Plaintiff filed employee dishonesty and theft claims with Defendant on
November 20, 1998, A copy of which is attached hereto and incorporated
herein by reference thereto as exhibit 3,
10. By letter dated June 7, 1999, attached hereto and incorporated herein by
reference thereto as exhibit 4, Defendant declined employee dishonesty
coverage and by letter dated June 28, 1999, attached hereto and
incorporated herein by reference thereto as exhibit 5, Defendant declined
theft coverage,
COUNT I
11. Paragraphs 1 through 10 above are incorporated herein by reference,
12. The employee dishonesty coverage, as more fully described in the
"employee dishonesty coverage form" attached hereto as exhibit 1,
provides for losses to "property other than money and securities" caused
by employee dishonesty.
13. The Plaintiff may maintain a claim for recovery oflosses against Travelers
Casualty and Surety Company under the insurance policy in question as an
employee dishonesty loss.
WHEREFORE, Plaintiff, Hoffman Materials, Inc. respectfully requests
that the Court enter an order:
(a) declaring that Defendant, Travelers Casualty and Surety
Company, pay Plaintiff, Hoffman Materials, Inc., the sum of
$118,773.07.
(b) awarding counsel fees, interest, delay damages and costs to the
Plaintiff; and
(c) directing such other and further relief as may be appropriate.
COUNT II
14. Paragraphs 1 through 10 above are incorporated herein by reference.
15. The theft coverage, as more fully described in the "Deluxe Property
Coverage Form" attached hereto as exhibit 2, provides coverage for theft
losses of "stock" and "all other personal property" owned by insured and
used in the insured's business.
16. The Plaintiff may maintain a claim for recovery of losses against Travelers
Casualty and Surety Company under the insurance policy in question as a
theft loss.
WHEREFORE, Plaintiff, Hoffman Materials, Inc, respectfully requests
that the Court enter an order:
(a) declaring that Defendant, Travelers Casualty and Surety
Company, pay Plaintiff, Hoffman Materials, Inc" the sum of
$118,773.07,
(b) awarding counsel fees, interest, delay damage.S<flnd costs to the
Plaintiff; and
(c) directing such other and further relief as may be appropriate.
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Steven 1. FisHman, Esquire
Attorney LD. # 16269
FISHMAN & MORGENTHAL
95 Alexander Spring Road, Suite 3
Carlisle, PA 17013
(717) 249-6333
Attorney for Plaintiff, Hoffman
Materials, Inc.
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VERIFICA nON
I, Judy K. Brill, verify that the statements made in this Complaint are true and
correct. I understand that false statements herein are made subject to the penalties
of 18 Pa. Cons. Stat. Ann. 94904, relating to unsworn falsification to authorities.
]A
JI'\ y K. Brill, Treasurer
ffman Materials, Inc.
Date: Sept:.errber 18, 2000
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CROO011090
EMPLOYEE DISHONESTY COVERAGE FORM
(Coverage Form A- Blanket)
A. COVERAGE
We will pay for loss 0(, and loss from damage la,
Covered Property resulting directly from the Covered
Cause o( loss.
1. Covered Property: 'Money". 'securities', and
'property other than money and securities'.
2. Covered Cause of Loss: 'Employee
dishonesty". .
3. Coverage Extension
Employees Temporarily Outside Coverage
Territory: We w~l pay for loss caused by any
'employee" while temporarily outside the
tenilory specified in the Territory General
Condition for a period nol more than 90 days.
B. UMIT OF INSURANCE
The most we will pay for Joss in anyone
'occurrence' Is the applicable Umit o( Insurance
shown in the DEClARATIONS.
C. DEDUCTIBLE.
1. We will not pay for loss in anyone 'occurrence'
unless the amount of loss exceeds the
Deductible Amount shown in the
DEClARATIONS. We will then pay the amounl
of loss in ('vcess of the Deducllble Amount, up
to the Umit of Insurance.
2. You must;
a. Give us notice as soon as possible of any
loss of the type insured under this Coverage
Fonn even though it falls entirely within the
Deductible Amount
b. Upon our request, give us a statement
describing the loss.
o. ADOmONAL EXCLUSIONS, CONOmON AND
OEFINmONS: In addilion to the provisions in the
Crime General Provisions, this Coverage Fonn is
subject to the following:
.
1. Additional Exclusions: We will not pay for loss
as specified below:
a. Employee Cancelled Undef Prior
Insurance: loss caused by any 'employee'
of yours, or predecessor In interest of yours,
for whom simllar prior insurance has been
cancelled and not reinstated since the last.
such cancellation.
b. Inventory :?hortages: loss, or that part of
any loss, the proof of which as to its
existence or amount is dependent upon:
(1) An Inventory computation; or
(2) A profit and loss COmputation.
2. Additional Condition
Cancellation As To Any Employee: This
Insurance Is cancetted as to any 'employee ':
L Imme<ftalely upon lflSCOVery by:
(1) YOU; or
(2) Any of your partners, offlC(!rs or
directors not in collusion with the
'employee';
at any lflShanest.act committed by that
'empIoyee' whether before or after
becoming employed by you.
b. On the dale specified In a notice malled te
you. That date will be least 30 days after t
date Of malling.
The mailing of notice to you at the last
mailing address known to us wJ1l be
sufficient proof of .notice. Delivery of noticE
the same as mailing.
3. Additional Definitions
a. -Employee Di$honesty" in paragraph A:.
means only dishonest aeI$ committed by ;
'employee', wh!ltherld~ec:for not. adi.
alone or In collUSiOn .WliIiother persons.
except you or a partner, with the manifest
Intent to: . .<"
(1) Cause you to sustain loss; and also
(2) Obtain fcnanciaJ benefit (ather than
emploflll!! benefits earned In the,norm
coUtSe of employment, 1ncIucflllg: .
salarieS, commissions, feeS. bonuses
promotioris, awards, profit sharing or
pensions) far:
(a) The 'employee'; or
(b) Any person or organization intend
by the 'employee" to receive that
benefit '
b. 'Occurrence' means all loss caused by,
involving, one or more 'employees", whet
the resun of a single act or series of acts.
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HOFFMAN MATERIALS, INC
Plaintiff,
Court of Common Pleas Cumberland
County Pennsylvania
Docket No. 2000-6496 Civil Term
VS
TRAVELS CASUALTY AND
SURETY COMPANY,
Defendant,
FilED
HARRISBURG, PA
OCT 2 5 2000
REA,CLERK
The United States District Court for the Middle District of pennsylvania.
PLEASE ACKNOWLEDGE RECEIPT OF THIS CASE BY SIGNING AND DATING THIS DOCUMENT.
RECORD RECEIVED: !()!:J5)06
DATE: /0 j;;r;)tlc
(~(7:~~
(signature & title)
Please Mail back
Attn: Becky - Prothonotary office
One Courthouse Square
Carlisle PA 17013
. ,
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HOFFMAN MATERIALS, INC
Plaintiff,
Court of Common Pleas Cumberland
County Pennsylvania
Docket No. 2000-6496 Civil Term
VS
TRAVELS CASUALTY AND
SURETY COMPANY,
Defendant,
The United States District Court for the Middle District of Pennsylvania.
PLEASE ACKNOWLEDGE RECEIPT OF THIS CASE BY SIGNING AND DATING THIS DOCUMENT.
RECORD RECEIVED:
DATE:
",7
(signature & title)
jY)alled
/Oe J'3--JO
Please Mail back Attn: Becky - prothonotary office
One Courthouse Square
Carlisle PA 17013