Louis Keppel hired Donna Thomas as a home health aide. Thomas was employed by Angela’s Angels Home Healthcare and Angela’s Angels, LLC.

Keppel died intestate. Dolores Guttmann and Thomas Loikith were appointed co-administrators of his estate. Guttmann and Loikith discovered that Thomas misappropriated 192 checks from Louis Keppel over a two-year period. In that regard, Guttmann and Loikith discovered that Thomas cashed checks drawn on Keppel’s account made payable to Thomas, her son, her son’s girlfriend, “cash,” and DET Medical PC, amounting to nearly $225,000. Thomas either forged Keppel’s name on the checks or influenced him to write checks payable to herself and others.

Angela’s Angels purchased comprehensive general liability insurance policies from Nautilus Insurance Company covering the time period when Keppel’s checks were cashed. Under the insurance policies, Nautilus was obligated to pay for “property damage,” provided the injury occurred during the coverage period. The policies defined “property damage” to mean either “[p]hysical injury to tangible property, including all resulting loss of use of that property[,]” or “loss of use of tangible property that is not physically injured.”

Angela’s Angels made a claim under the insurance policies related to the cashing of Keppel’s checks. Nautilus denied coverage, asserting that the claim was not the result of “property damage” because money is not “tangible property.”

Guttmann and Loikith filed a lawsuit against Angela’s Angels and Thomas. Angela’s Angels filed crossclaims against Nautilus for coverage and indemnification related to plaintiffs’ claims. Angela’s Angels settled with plaintiffs for a nominal sum and assigned their rights under the Nautilus policies to plaintiffs to pursue coverage. Thomas never filed an answer and default was entered against her.

After discovery, plaintiffs filed a motion for summary judgment, requesting Nautilus indemnify Keppel’s estate for the money taken by Thomas. Nautilus filed a cross-motion for summary judgment, seeking a declaration that there was no coverage for the loss.

After hearing the arguments of counsel, the judge denied plaintiffs’ motion and granted Nautilus’s cross-motion. The judge found Nautilus was not required to cover the loss from Thomas’s cashing of Keppel’s checks because the term “tangible property” did not apply to checks or money.

The Estate of Louis F. Keppel appealed,  asserting that money constitutes “tangible property” under the Nautilus policies.

The appeals court decided that, because the Nautilus policies do not define the term “tangible property,” the court must define the term to determine whether plaintiffs’ claim is covered by insurance.

The appeals court found, first, that New Jersey courts have held that money, as a medium of exchange, is not tangible property. Courts in other states similarly hold money is not tangible property.

The appeals court also referred to dictionaries to determine the definition of “tangible property:”

Black’s Law Dictionary defines “tangible property” as “[p]roperty that has physical form and characteristics.” Similarly, Black’s defines “tangible personal property” as “[c]orporeal personal property of any kind; personal property that can be seen, weighed, measured, felt, touched, or in any other way perceived by the senses . . . .” According to Merriam Webster, “tangible property” is defined as “property that has a tangible and corporeal existence and intrinsic economic value because of it.” In accordance with these definitions, “tangible property” is physical property that can be perceived by the senses and has genuine monetary value. Applying these definitions, [t]he loss of stolen money does not constitute “property damage” because money, or the checks representing money, is not “tangible property.” While checks can be touched, the checks themselves have no intrinsic monetary value . . .  The loss of use of a check does not equate with the loss of money. . . Therefore, there is no property damage claim under the Nautilus policies.

The appeals court affirmed the decision of the trial court, and dismissed plaintiffs’ claims against Nautilus.

The case is attached here – Estate of Keppel v. Nautilus Insurance Group

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