(CN) — Quoting from “Othello,” then rather painfully imitating it, a California appeals court affirmed judgment Wednesday for an insurer that refused to cover a wine collector’s purchase of millions of dollars of counterfeit wine from a “villainous wine collector.”
“O thou invisible spirit of wine, if thou hast no name to be known by, let us call thee devil!” Justice Eileen Moore began her opinion for the unanimous three-judge panel in Division Three of the Fourth Appellate District, based in Santa Ana.
After properly attributing the citation to Act II, scene iii of “Othello,” Moore continued: “Yea verily, we are presented with a most unfortunate tale of a villainous wine dealer who sold millions of dollars’ worth of counterfeit wine to an unsuspecting wine collector. When the wine collector discovered the fraud, he filed an insurance claim based on his ‘Valuable Possessions’ property insurance policy. The insurance company denied the claim. The wine collector sued for breach of contract. The trial court ruled in favor of the insurance company, sustaining its demurrer.
“We agreeth with the trial court; the wine collector suffered a financial loss, but there was no loss to property that was covered by the property insurance policy. In other words, the wine collector is stuck with the devil wine without recompense. A Shakespearean tragedy, to be sure.”
Wine collector David Doyle stored his collection in a Laguna Beach wine storage facility and beginning in 2007 insured it with Fireman’s Fund Insurance Co., with a blanket limit of $19 million. He renewed the policy annually for eight years.
During those years, he paid wine dealer Rudy Kurniawan nearly $18 million for “purportedly rare, vintage wine,” Justice Moore wrote for the court.
Alas, “a law enforcement investigation revealed that for many years Kurniawan had apparently been filling empty wine bottles with his own wine blend and had been affixing counterfeit labels to the bottles. In 2013, Kurniawan was convicted of fraud and was sent to prison for 10 years,” Moore wrote.
Fireman’s Fund denied Moore’s original claim, from 2014, stating there was no covered “loss” under his policy.
Doyle filed an amended complaint in 2015, alleging breach of contract, among other things. Firemen’s fund filed a demurrer, which the trial court sustained without leave to amend. The appellate court affirmed, and awarded the insurer the costs of the appeal.
Joined by Presiding Justice Kathleen O’Leary and Associate Justice Richard Fybel, Moore agreed with Firemen’s Fund that there was no “loss or damage to covered property,” because “the wine is in the exact same condition now that it was in when [Doyle] first insured it.”
Nor was there any physical loss. In short, the court ruled, “nothing happened to the covered property.”
And in a conclusion unlikely to offer Doyle much solace, Moore wrote: “Finally, we can merely offereth to Doyle this small piece of wisdom from the Bard of Avon: ‘The robbed that smiles steals something from the thief.’” (Shakespeare, Othello, Act I, scene iii.)