[REVIEW GRANTED] E.M.M.I. Inc. v. Zurich American Ins. Co. (2002)

E.M.M.I. INC., Plaintiff and Appellant, v. ZURICH AMERICAN INSURANCE COMPANY, Defendant and Respondent.

(Superior Court of Los Angeles County, No. BC233731, David A. Workman, Judge.)

(Opinion by Turner, P. J., with Grignon and Mosk, JJ., concurring.)

COUNSEL

Quisenberry & Kabateck, John N. Quisenberry, Brian S. Kabateck, Heather M. Mason, Suzanne L. Havens Beckman and Jerilyn Jacobs for Plaintiff and Appellant.

Bishop, Barry, Howe, Haney & Ryder, Mark Koop, and Jaye E. Framson for Defendant and Respondent. [100 Cal. App. 4th 463]

OPINION

TURNER, P. J.-

I. INTRODUCTION

This appeal involves the question of whether a jeweler's block insurance policy provides coverage when an insured's employee is standing behind his car when the automobile, which contains jewelry, is driven away by a thief. E.M.M.I. Inc., doing business as Universal Fine Jewelry (plaintiff), appeals [100 Cal. App. 4th 464] from a summary judgment in favor of Zurich American Insurance Company (defendant). Plaintiff's salesperson, Brian Callahan, was outside his car inspecting a possible mechanical malfunction. The car, containing jewelry display cases, was stolen. The trial court concluded Mr. Callahan was not "actually in or upon" the car at the time of the theft, therefore, the jeweler's block insurance policy issued by defendant did not cover the loss. We agree. Accordingly, we affirm the judgment.

II. BACKGROUND

[1] Jeweler's block insurance was conceived by Lloyds of London at the turn of the century. (JMP Associates, Inc. v. St. Paul Fire & Marine Ins. Co. (Md. 1997) 693 A.2d 832, fn. 1; 70 N.Y.Jur.2d (1998) Insurance, § 1530; Annot., Construction and Effect of "Jeweler's Block" Policies or Provisions Contained Therein (1994) 22 A.L.R.5th 579, Summary.) Jeweler's block insurance differs from other property insurance. As the United States District Court explained in Star Diamond, Inc. v. Underwriters at Lloyd's, London (E.D.Va. 1997) 965 F. Supp. 763, 765: "Jewelers' block insurance is different from most other traditional forms of property insurance which are considered 'named-peril' insurance policies. Under named-peril policies, an insurer agrees to indemnify its insured for losses resulting from certain risks of loss or damage which are specifically enumerated within the provisions of the policy. In contrast, under a jewelers' block policy all risks of loss or damage to jewelry may be insured, subject to certain exceptions." (See 70 N.Y.Jur.2d, supra, Insurance, § 1530.)

The policy contained an exclusion and an exception to the exclusion as follows: "We will not pay for 'loss' caused by or resulting from any of the following: [¶] . . . Theft from any vehicle unless you, an employee, or other person whose sole duty is to attend the vehicle are actually in or upon such vehicle at the time of the theft." (Italics added.) This exclusion has long been included in jeweler's block insurance policies as evidenced by repeated discussions of it in the decisional authority cited below. Insurance coverage is claimed in this case under the exception to the exclusion.

Plaintiff's salesperson, Mr. Callahan, was traveling from his home to an appointment. He had two jewelry display cases locked in the trunk of his car. He heard a rattling noise coming from the rear of his automobile. He pulled to the side of the road and got out to inspect the source of the noise. He left the car running with the keys in the ignition. Mr. Callahan bent down to look at the tail-pipe area of his car. A man then brushed by Mr. Callahan. The unidentified man got into Mr. Callahan's car and drove away. The car was recovered, but the jewelry display cases were missing. [100 Cal. App. 4th 465]

Defendant denied plaintiff's insurance claim on the ground Mr. Callahan was not "actually in or upon" his car at the time of the loss. Plaintiff filed this action against defendant for: contract breach; tortious breach of the implied covenant of good faith and fair dealing; and unfair business practices. The trial court granted defendant's summary judgment motion. Judgment was entered in favor of defendant. Plaintiff filed a timely notice of appeal.

III. DISCUSSION

A. Evidentiary Ruling

[2] Plaintiff contends the trial court erred in sustaining defendant's objections to evidence presented in the summary judgment motion opposition. Plaintiff sought to introduce an "expert's" opinion, based on industry custom and practice, that coverage existed on two independent grounds. The first aspect of the proffered opinion was that: Mr. Callahan was the victim of a Colombian jewelry theft ring; the commission of the theft began when the robbers tampered with Mr. Callahan's car; and therefore the unattended vehicle exclusion was not triggered. The second aspect of the opinion was that: Mr. Callahan was attending to the car at the time of the theft; hence, Mr. Callahan was "upon" the vehicle within the meaning of the policy. Plaintiff also sought to introduce deposition testimony of Mr. Callahan. Mr. Callahan had spoken to an unidentified Chicago police lieutenant and a "lead FBI agent." The unidentified lieutenant and the FBI agent expressed opinions concerning the robbery in their conversations with Mr. Callahan. The trial court disallowed the proffered evidence as "impermissibly speculative and nonspecific to the alleged incident."

We find no error. Opinion testimony of the type here regarding the scope, meaning, or interpretation of policy language is inappropriate. (Pieper v. Commercial Underwriters Ins. Co. (1997) 59 Cal. App. 4th 1008, 1017; Cooper Companies v. Transcontinental Ins. Co. (1995) 31 Cal. App. 4th 1094, 1100; Devin v. United Services Auto. Assn. (1992) 6 Cal. App. 4th 1149, 1157-1158, fn. 5; National Auto. & Casualty Ins. Co. v. Stewart (1990) 223 Cal. App. 3d 452, 458-459; Hartford Accident & Indemnity Co. v. Sequoia Ins. Co. (1989) 211 Cal. App. 3d 1285, 1304-1305; Suarez v. Life Ins. Co. of North America (1988) 206 Cal. App. 3d 1396, 1406-1407; Croskey et al., Cal. Practice Guide: Insurance Litigation (The Rutter Group 2001) ¶¶ 4:13-4:15, 4:17-4:17.5.) In Pieper v. Commercial Underwriters Ins. Co., supra, 59 Cal.App.4th at page 1017, for example, our colleagues in Division Three of this appellate district [100 Cal. App. 4th 466] explained that opinion evidence as to the meaning of an insurance policy term was irrelevant. "[T]he objective reasonable interpretation of the insured would not depend on the views of so-called experts except to the extent these views represent the popular or common understanding of the term." (Ibid.) In National Auto. & Casualty Ins. Co. v. Stewart, supra, 223 Cal.App.3d at pages 458-459, retired Presiding Justice John T. Racanelli noted, "The opinion of a linguist or other expert as to the meaning of the policy is irrelevant to the court's task of interpreting the policy as read and understood by a reasonable lay person [citations]." In the present case, opinion as to the meaning of the term "upon" based on industry custom and practice was irrelevant to the court's interpretation of the policy language.

B. Summary Judgment

1. Standard of Review

[3] We apply the parties' summary judgment burdens of production described by the Supreme Court in Aguilar v. Atlantic Richfield Co. (2001) 25 Cal. 4th 826, 850-851: "From commencement to conclusion, the party moving for summary judgment bears the burden of persuasion that there is no triable issue of material fact and that he is entitled to judgment as a matter of law. That is because of the general principle that a party who seeks a court's action in his favor bears the burden of persuasion thereon. [Citation.] There is a triable issue of material fact if, and only if, the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof . . . . [¶] [T]he party moving for summary judgment bears an initial burden of production to make a prima facie showing of the nonexistence of any triable issue of material fact; if he carries his burden of production, he causes a shift, and the opposing party is then subjected to a burden of production of his own to make a prima facie showing of the existence of a triable issue of material fact. . . . A prima facie showing is one that is sufficient to support the position of the party in question. [Citation.]" (Fns. omitted; accord, Kids' Universe v. In2Labs (2002) 95 Cal. App. 4th 870, 878.)

[4] We review the trial court's decision to grant the summary judgment de novo. (Johnson v. City of Loma Linda (2000) 24 Cal. 4th 61, 65, 67-68; Sharon P. v. Arman, Ltd. (1999) 21 Cal. 4th 1181, 1188, disapproved on another point in Aguilar v. Atlantic Richfield Co., supra, 25 Cal.4th at p. 853, fn. 19.) [5] Because there is no dispute as to any material fact, we construe the insurance policy and independently determine whether defendant is entitled [100 Cal. App. 4th 467] to judgment as a matter of law. (Waller v. Truck Ins. Exchange (1995) 11 Cal. 4th 1, 18; State Farm Mut. Auto. Ins. Co. v. Partridge (1973) 10 Cal. 3d 94, 100; Nissel v. Certain Underwriters at Lloyd's of London (1998) 62 Cal. App. 4th 1103, 1110; Revesz v. Excess Ins. Co. (1973) 30 Cal. App. 3d 125, 127.)

2. Plaintiff's Arguments on Appeal

Plaintiff's contentions on appeal center on the construction of the term "upon" in the insurance policy. Plaintiff does not specifically assert that language is ambiguous. Moreover, plaintiff makes no claim as to the reasonable expectations of the insured.

3. Principles of Insurance Policy Interpretation

[6] The interpretation of an insurance policy is a question of law. (Waller v. Truck Ins. Exchange, Inc., supra, 11 Cal.4th at p. 18; AIU Ins. Co. v. Superior Court (1990) 51 Cal. 3d 807, 818.) The ordinary rules of contract interpretation apply. (Bank of the West v. Superior Court (1992) 2 Cal. 4th 1254, 1264; see AIU Ins. Co. v. Superior Court, supra, 51 Cal.3d at pp. 821-822.) As the Supreme Court explained in Bank of the West v. Superior Court, supra, 2 Cal.4th at pages 1264-1265: "The fundamental goal of contractual interpretation is to give effect to the mutual intention of the parties. (Civ. Code, § 1636.) If contractual language is clear and explicit, it governs. (Civ. Code, § 1638.) On the other hand, '[i]f the terms of a promise are in any respect ambiguous or uncertain, it must be interpreted in the sense in which the promisor believed, at the time of making it, that the promisee understood it.' (Id., § 1649; see AIU, supra, 51 Cal.3d at p. 822.) This rule, as applied to a promise of coverage in an insurance policy, protects not the subjective beliefs of the insurer but, rather, 'the objectively reasonable expectations of the insured.' (AIU, supra, at p. 822.) Only if this rule does not resolve the ambiguity do we then resolve it against the insurer. (See AIU, supra, at p. 822.) [¶] . . . [A] court that is faced with an argument for coverage based on assertedly ambiguous policy language must first attempt to determine whether coverage is consistent with the insured's objectively reasonable expectations. In so doing, the court must interpret the language in context, with regard to its intended function in the policy. (Producers Dairy Delivery Co. v. Sentry Ins. Co. (1986) 41 Cal. 3d 903, 916-917 & fn. 7 [].) This is because 'language in a contract must be construed in the context of that instrument as a whole, and in the circumstances of that case, and cannot be found to be ambiguous in the abstract.' [100 Cal. App. 4th 468] (Id. at p. 916, fn. 7, italics added; cf. Civ. Code, § 1641.) [¶] . . . [P]olicy terms must be read in their 'ordinary and popular sense' (Civ. Code § 1644; see also AIU, supra, 51 Cal.3d at p. 822; cf. Reserve Ins. Co. v. Pisciotta (1982) 30 Cal. 3d 800, 807 []) . . . ."

Similarly, in AIU Ins. Co. v. Superior Court, supra, 51 Cal.3d at pages 821-822, the Supreme Court set forth the principles of insurance policy interpretation as follows: "Under statutory rules of contract interpretation, the mutual intention of the parties at the time the contract is formed governs interpretation. (Civ. Code, § 1636.) Such intent is to be inferred, if possible, solely from the written provisions of the contract. (Id., § 1639.) The 'clear and explicit' meaning of these provisions, interpreted in their 'ordinary and popular sense,' unless 'used by the parties in a technical sense or a special meaning is given to them by usage' (id., § 1644), controls judicial interpretation. (Id., § 1638.) Thus, if the meaning a lay person would ascribe to contract language is not ambiguous, we apply that meaning. (See, e.g., Reserve Insurance Co. v. Pisciotta[, supra,] 30 Cal.3d [at p.] 807 []; Crane v. State Farm Fire & Cas. Co. (1971) 5 Cal. 3d 112, 115 [].) [¶] If there is ambiguity, however, it is resolved by interpreting the ambiguous provisions in the sense the promisor (i.e., the insurer) believed the promisee understood them at the time of formation. (Civ. Code, § 1649.) If application of this rule does not eliminate the ambiguity, ambiguous language is construed against the party who caused the uncertainty to exist. (Id., § 1654.) In the insurance context, we generally resolve ambiguities in favor of coverage. (See, e.g., State Farm Mut. Auto. Ins. Co. v. Jacober (1973) 10 Cal. 3d 193, 197 []; Bareno v. Employers Life Ins. Co. (1972) 7 Cal. 3d 875, 878 []; Continental Casualty Co. v. Phoenix Constr. Co. (1956) 46 Cal. 2d 423, 437 [].) Similarly, we generally interpret the coverage clauses of insurance policies broadly, protecting the objectively reasonable expectations of the insured. (See, e.g., Garvey v. State Farm Fire & Casualty Co. (1989) 48 Cal. 3d 395, 406 []; Reserve Insurance Co. v. Pisciotta, supra, 30 Cal.3d at p. 808.) These rules stem from the fact that the insurer typically drafts policy language, leaving the insured little or no meaningful opportunity or ability to bargain for modifications. (See, e.g., Garcia v. Truck Ins. Exchange (1984) 36 Cal. 3d 426, 438 []; Bareno, supra, 7 Cal.3d at p. 878.) Because the insurer writes the policy, it is held 'responsible' for ambiguous policy language, which is therefore construed in favor of coverage." (Fn. omitted.)

Ambiguity in the context of insurance policies was discussed in Waller v. Truck Ins. Exchange, supra, 11 Cal.4th at pages 18-19 as follows: "A [100 Cal. App. 4th 469] policy provision will be considered ambiguous when it is capable of two or more constructions, both of which are reasonable. (Bay Cities Paving Grading, Inc. v. Lawyers' Mutual Insurance Co. (1993) 5 Cal. 4th 854, 867 [].) But language in a contract must be interpreted as a whole, and in the circumstances of the case, and cannot be found to be ambiguous in the abstract. (Bank of the West, supra, 2 Cal.4th at p. 1265.) Courts will not strain to create an ambiguity where none exists. (Reserve Insurance, supra, 30 Cal.3d at p. 807.)"

[7] As noted above, this case requires us to construe an exception to an exclusionary clause. Exceptions to exclusions are broadly construed in favor of the insured. (Rosen v. State Farm General Ins. Co. (2002) 98 Cal. App. 4th 1322, 1326; Meraz v. Farmers Ins. Exchange (2001) 92 Cal. App. 4th 321, 324; National Union Fire Ins. Co. v. Lynette C. (1991) 228 Cal. App. 3d 1073, 1079.) Nevertheless, unambiguous policy language controls. (Waller v. Truck Ins. Exchange, Inc., supra, 11 Cal.4th at p. 18; Rosen v. State Farm General Ins. Co., supra, 98 Cal.App.4th at p. 1327.)

4. Decisional Authority

[8] Two California cases have considered the "actually in or upon" insurance policy language at issue here. Both are decisions of Division Three of the Court of Appeal for this appellate district. Both cases involved parked, unattended cars.

In Revesz v. Excess Ins. Co., supra, 30 Cal.App.3d at pages 126-129, the Court of Appeal considered language in two "'salesman's floater'" insurance policies procured by the plaintiff, a jewelry salesperson. The facts were undisputed. In order to get directions, the plaintiff stopped and parked his car in front of a service station. Sample cases of jewelry were locked in the truck. The plaintiff had walked two or three feet away in search of directions when the car was stolen. One insurance policy contained a "'holdup and robbery endorsement'" which provided: "'In consideration of the premium for which this policy is written, . . . coverage as granted by the policy shall not apply to any loss of or damage to merchandise: . . . [¶] 3. whilst in or upon any automobile . . . unless, at the time the loss or damage occurs, the assured is actually in or upon such vehicle and the merchandise is in his possession.' (Italics added.)" (Id. at p. 127.) The second policy similarly excluded theft from an unoccupied vehicle: "'This policy does not insure loss of or damage to property. . . . [¶] 3) in or upon any automobile . . . unless at the time the loss or damage occurs there is actually in or upon the vehicle, the Assured, or a permanent employee of the Assured, or a person [100 Cal. App. 4th 470] whose sole duty it is to attend the vehicle. . . .' (Italics added.)" (Ibid.) The Court of Appeal concluded that under the facts before it, the word "upon" did not require interpretation. (Id. at pp. 128-129.) The court held: "The controlling factors are not the time interval and the distance traveled but plaintiff's intent and conduct. Having parked his vehicle at the curb, locked the ignition, removed his keys, and left his vehicle for the purpose of seeking information, he had temporarily abandoned the vehicle. At the time of the loss the jewelry was not in his 'personal custody' and he was not 'actually in or upon' his vehicle, as required by the policies, in any sense of these words. The temporary abandonment is clearly evidenced by the fact that the thief was able to take possession of the vehicle and its contents without interference from him. [¶] Our reasoning and conclusion are consistent with reported decisions construing these key words in policies insuring against loss of property from a vehicle; in each the insured was clearly absent from his vehicle at the time of loss; in each the court found that under the facts presented the words 'actually in or upon' were not ambiguous; and in each the court placed great emphasis on the word 'actually,' indicating that it clearly negates constructive presence and possession. (See Royce Furs, Inc. v. Home Insurance Company ([N.Y.App.Div.] 1968) 30 App.Div.2d 238 []; Phil G. Ruvelson, Inc. v. St. Paul Fire & Marine Ins. Co. (1951) 235 Minn. 243 []; Greenberg v. Rhode Island Ins. Co. ([N.Y.App.Term.] 1946) 188 Misc. 23 [].)" (Revesz v. Excess Ins. Co., supra, 30 Cal.App.3d at pp. 128-129.)

Plaintiff relies on Revesz's conclusion that, "The controlling factors are . . . plaintiff's intent and conduct." (Revesz v. Excess Ins. Co., supra, 30 Cal.App.3d at pp. 128-129.) We disagree with Revesz to the extent it so holds. The insurance policy says nothing about the insured's intent. That Mr. Callahan did not intent to abandon his vehicle is not relevant. We agree with Revesz's ultimate no coverage finding because the insured was clearly not actually in or upon the vehicle at the time of the theft.

In Nissel v. Certain Underwriters at Lloyd's of London, supra, 62 Cal.App.4th at page 1106, a traveling sales representative parked his car in front of a restaurant. Two men stole a bag containing diamonds and other precious stones from the parked car. (Ibid.) The jeweler's block policy excluded thefts from an automobile unless, at the time of the loss, "'there is actually in or upon such vehicle, the Assured . . . , or a permanent employee of the Assured, or a person whose sole duty it is to attend the vehicle.'" (Id. at p. 1107, italics added.) The insured made no claim that the provision was in any way unclear or ambiguous. (Id. at p. 1112.) Our Division Three colleagues in an opinion authored by Associate Justice H. Walter Croskey, held that a theft "from an empty or unoccupied vehicle" fell [100 Cal. App. 4th 471] within the policy exclusion; the employee was not actually in or upon the car when the loss occurred. (Id. at p. 1114; see also Taff v. Atlas Assur. Co. (1943) 58 Cal. App. 2d 696, 701 ["If he should not leave his jewelry in his unguarded car exposed to the hazards of theft, . . . his coverage was complete; but if he did choose so to leave it, he had got what he bought"].)

Consistent with Revesz and Nissel, courts in other jurisdictions have regularly held that the "actually in or upon" language in a jeweler's block insurance policy excludes coverage for a theft from an automobile with no person in it. (Sphere Drake Ins. PLC v. Trisko (D.Minn. 1998) 24 F. Supp. 2d 985, 988, 991-996, affd. on other grds. (8th Cir. 2000) 226 F.3d 951, 955-956 [outside the rental car but watching it]; Williams v. Fallaize Ins. Agency, Inc. (Ga.App. 1996) 469 S.E.2d 752, 755 [insured was 25 feet from car and inside store]; American Stone Diamond, Inc. v. Lloyds of London (S.D.Tex. 1996) 934 F. Supp. 839, 843-844 [inside service station paying for gas]; Tivoli Corp. v. Jewelers Mutual Ins. Co. (Tex.Ct.App. 1996) 932 S.W.2d 704, 710-711 [salesman was inside check cashing business]; Wideband Jewelry Corp. v. Sun Ins. Co. of New York, Inc. (N.Y.App.Div. 1994) 210 A.D.2d 220 [employee was six feet away from vehicle]; Jerome I. Silverman, Inc. v. Lloyd's Underwriters (S.D.N.Y. 1976) 422 F. Supp. 89, 90 ["no loss occurred while [manufacturer's representative] was in or around the automobile" and "immaterial whether [insured's representative] may have kept the car in sight"]; Steinzeig v. Mechanics & Traders Ins. Co. (Mo.Ct.App. 1957) 297 S.W.2d 778, 782-783 [parked on street near salesperson's home]; Bliss Ring Co. v. Globe & Rutgers Fire Ins. Co. (Ill.App.Ct. 1955) 129 N.E.2d 784, 788-789 [parked and went to coffee shop]; Seelig v. St. Paul Fire & Marine Ins. Co. (E.D.N.Y. 1953) 109 F. Supp. 277, 279 [parked in a hotel garage]; Phil G. Ruvelson, Inc. v. St. Paul Fire & Marine Ins. Co. (Minn. 1951) 50 N.W.2d 629, 636 [parked for two to four minutes while sales representative was inside hotel]; Greenberg v. Rhode Island Ins. Co., supra, 66 N.Y.S.2d at pp. 458-459 [car parked on street while representative was in restaurant]; cf. Royce Furs, Inc. v. Home Ins. Co., supra, 30 A.D.2d at pp. 239-241 [furrier's block insurance policy; car parked outside hotel]; see Annot., Construction and Effect of "Jeweler's Block" Policies or Provisions Contained Therein, supra, 22 A.L.R.5th 579, § 23.)

We do note though that in JMP Associates, Inc. v. St. Paul Fire & Marine Ins. Co., supra, 693 A.2d at pages 839-840, the Court of Appeals of Maryland held the word "on" in "in or on the vehicle" was ambiguous. The court remanded the matter for a trial to consider extrinsic evidence of the parties' intentions. (Id. at p. 840.) It is noteworthy, however, that the [100 Cal. App. 4th 472] jeweler's block policy at issue in JMP Associates, Inc. did not include the word actually, but only "in or on." (Id. at p. 832.) Furthermore, in that case, the insurer conceded that for coverage to apply a person did not have to be actually physically situated on the car and could even walk four feet away to pay for gasoline at an outside booth; it was only when the employee went inside to pay for gasoline that he was no longer "on" the vehicle. (Id. at p. 840.) No such concession is present in this case.

Moreover, numerous courts have consistently opined that the exclusion is unambiguous--the insured or its employee must actually, in reality, literally, be in or on the automobile. (Sphere Drake Ins. PLC v. Trisko, supra, 24 F.Supp.2d at pp. 992-994; Williams v. Fallaize Ins. Agency, Inc., supra, 469 S.E.2d at p. 755; American Stone Diamond, Inc. v. Lloyds of London, supra, 934 F.Supp. at pp. 842-844; Greenberg v. Rhode Island Ins. Co., supra, 66 N.Y.S.2d at p. 459; Phil G. Ruvelson, Inc. v. St. Paul Fire & Marine Ins. Co., supra, 50 N.W.2d at pp. 633, 636; cf. Royce Furs, Inc. v. Home Ins. Co., supra, 30 A.D.2d at pp. 240-241; see Nissel v. Certain Underwriters at Lloyd's of London, supra, 62 Cal.App.4th at p. 1112.) In American Stone Diamond, Inc. v. Lloyds of London, supra, 943 F.Supp. at page 843, for example, the federal district court noted: "Courts have consistently held nearly identical policy language to be unambiguous and, based upon such exclusions, have denied coverage to insureds who were not literally in or upon their vehicles at the time of the losses, even though the insureds may have been only a short distance away from the vehicle, watching the vehicle, or absent from the vehicle for only a short period of time. [Citations.]"

Sphere Drake Ins. PLC v. Trisko, supra, 24 F. Supp. 2d 985, is similar to the present case. In Trisko, a jeweler's block policy was issued to the defendant. The defendant's employees placed suitcases containing insured property in the trunk of a rental car. They waited outside the car for 30 minutes. During that time they remained at or within 8 to 16 feet of the car. In addition, the employees, in the words of the court, "were vigilant in their surveillance of the car, and the area immediately around it." (Id. at p. 988.) The federal district court held, applying Minnesota law, that the "actually in or upon" exception to coverage for theft from an automobile was clear and unambiguous. (Id. at pp. 992-994.) The court concluded, moreover, that coverage did not extend to a theft occurring while the employees were not physically in or upon the rental car, even if they were close to the automobile at the time. (Ibid.)

However, two courts in other jurisdictions have held that salespersons who were adjacent to automobiles and attending them when the losses [100 Cal. App. 4th 473] occurred were actually in or upon the car within the meaning of a jeweler's block policy. (Star Diamond, Inc. v. Underwriters at Lloyd's, London, supra, 965 F.Supp. at pp. 767-768; Lackow v. Insurance Co. of North America (N.Y.App.Div. 1976) 52 A.D.2d 579; see 11 Couch on Insurance (3d ed. 1998) § 154:74; 70 N.Y.Jur.2d, supra, Insurance, § 1530.) Neither Lackow nor Star Diamond, Inc. has been followed in any reported decision. These opinions appear to stand alone insofar as they construe the "actually in or upon" requirement as including close proximity to or attendance upon the vehicle.

In Lackow v. Insurance Co. of North America, supra, 52 A.D. at page 579, the New York court held without analysis, "The assured's employee's position at the time of the robbery, at the rear of the vehicle opening its trunk, was in compliance with the 'Jeweler's Block Policy' provision that he be 'actually in or upon such vehicle' at the time of the loss (cf. Kinscherf Co., Inc. v. St. Paul Fire & Marine Ins. Co. [(N.Y.App.Div. 1931)] 234 App.Div. 385, 254 N.Y.S. 382; Royce Furs v. Home Ins. Co., 30 A.D.2d 238, 291 N.Y.S.2d 529.)" William Kinscherf Co., cited in Lackow, concerned a policy excepting, "'Loss or damage to property insured hereunder whilst in or upon any automobile, motorcycle or horse drawn vehicle unless such conveyance is attended at the time the loss occurs by a permanent employee of the assured.'" (William Kinscherf Co. v. St. Paul Fire & Marine Ins. Co., supra, 234 A.D. at p. 386, italics added.) The New York court held, without citation to authority, "[The policy] language can only be interpreted to mean that if the permanent employee of the plaintiff is not actually within or on the automobile, or so near thereto as to be able to observe a theft of the contents, he shall not be deemed to be in attendance at the time the loss occurs." (Ibid.) William Kinscherf Co. is distinguishable from Lackow as well as the present case insofar as the insurance policy covered attended vehicles. Royce Furs, Inc., also cited in Lackow, held the "actually in or upon" exclusion in a Furrier's Block insurance policy was applicable where "[t]he plaintiff's representative was not in the automobile, but was far enough from it to have given the thief the opportunity to enter the car." (Royce Furs, Inc. v. Home Ins. Co., supra, 30 A.D.2d at p. 241.) Royce Furs, Inc. did not hold a person was upon a vehicle within the meaning of the insurance policy so long as he or she was close to it. In short, neither William Kinscherf Co. nor Royce Furs, Inc., is persuasive authority for the proposition announced in Lackow.

In Star Diamond, Inc., supra, a company president placed his stock of diamonds in a knapsack and put the knapsack on the floor behind the front seat of his car. (Star Diamond, Inc. v. Underwriters at Lloyd's, London, supra, 965 F.Supp. at [100 Cal. App. 4th 474] p. 764.) He was at a gas station, attempting to refuel the vehicle, and not more than nine inches from his car when the knapsack was stolen. (Ibid.) The United States District Court held: the use of the disjunctive "or" between the terms "in" and "upon" means coverage is not conditioned solely on the insured being "'actually in'" the vehicle at the time of the loss; the ordinary meaning of "'upon'" included "'in or into close proximity or contact with'"; therefore, "'upon'" encompassed "situations where the insured is actually attending to his vehicle to facilitate the transport of insured property." (Id. at p. 767.) The federal court further concluded: "'Upon' should thus include instances where the insured exits his vehicle to tend to the insured property in the back seat or trunk, change a tire or refuel his vehicle, and is physically adjacent to and attending to the vehicle." (Ibid.) As noted above, Star Diamond, Inc. has not been followed in any reported decision.

5. Application to the Present Case

We find the provision in question is unambiguous. In its ordinary and popular usage (Civ. Code, § 1644; Bank of the West v. Superior Court, supra, 2 Cal.4th at p. 1265), "upon" is interchangeable with "on." (E.g., Newbury House Online Dict. (1999)