In a recent unpublished Appellate Division case in New Jersey,1 AIG was held not responsible for a wig and beauty distributor’s business loss claim. Beauty Plus, a wholesale distributor of human hair wigs and other beauty products had a shipment of 487 cartons of human hair wigs stolen from their Moonachie, New Jersey, warehouse back in December of 2014.

The shipment, which arrived late on a Friday night, was backed up into the loading dock, unhitched from the tractor trailer and unlocked, however, a decision was made to wait until Monday to unload the truck due to the late hour of arrival. Sometime the following night, an unknown individual drove a tractor trailer to the warehouse, hooked it up to the freight container and drove off, wigs in tow. Police later recovered the trailer but missing were 387 cartons of wigs valued at $283,000.

Beauty Plus submitted a claim under its marine cargo policy with AIG unit National Union Fire Insurance Company of Pittsburgh. The policy provided coverage for the “loading and unloading” of goods but only for 24 hours after the shipment is received. Here, Beauty Plus received the shipment at 5 p.m. Friday, while the theft took place Saturday at 9 p.m. Therefore, AIG denied their claim, citing to their 24-hour policy exclusion.

Beauty Plus filed suit in New Jersey Superior Court following the denial seeking coverage of their lost wigs. In March 2017, the trial court granted summary judgment to National Union, concluding that coverage was unavailable under any of three policy provisions, including the loading and unloading section. Beauty Plus had argued that coverage should be extended from Friday at 5 p.m. through Monday at 5 p.m. citing the business day rule. That rule states that, where a party’s time to perform its obligations under a contract or insurance policy expires on a weekend or holiday, it is entitled to push the deadline to fulfill those obligations to the next business day. Beauty Plus argued that the rule applied since they did not receive the shipment till Friday evening.

However, the trial court found that the rule was not applicable since the loading and unloading provision didn’t require Beauty Plus to unload the goods — or perform any other act — during the 24 hours of extended coverage. Therefore, the Superior Court held that Beauty Plus losses were barred under the clear terms of the policy provision.

Beauty Plus filed an appeal heard and decided before the New Jersey Appellate Division. In an unpublished decision, the Appellate Division upheld the lower court’s ruling stating:

Here, the policy did not require plaintiff to perform an act, such as unloading the goods, within the 24 hours of extended coverage. Nor did the contract require any other event to occur within the designated period. Plaintiff was free to leave the goods in the container as it chose to do. Plaintiff’s decision did not, however, prevent the policy from lapsing and transferring the risk of loss back to plaintiff at 5 p.m. on Saturday, December 13, 2014.

Here, the Appellate Division found that the plain terms of the of the AIG policy precluded coverage. As with many property cases, it comes down to definition and interpretation of policy terms. In a case of the bigwig insurance company versus the actual wig company, the bigwig won.
1 Beauty Plus v. National Union Fire Ins. Co. of Pittsburgh, No. A-3380-16T3 (N.J. App. Aug. 14, 2018).