Vam Check Cashing Corp. v. Federal Insurance
Vam Check Cashing Corporation (VAM) sued Federal Insurance Company after experiencing a $120,000 loss due to an elaborate fraud scheme. Imposters tricked a cashier at VAM's Pine Check Cashing location into handing over the money. Federal denied VAM's claim, asserting the incident did not meet the policy's definition of 'Robbery,' specifically concerning the terms 'overt felonious act' and 'cognizance.' The court examined the insurance policy's ambiguous language, particularly the meanings of 'overt' and 'cognizance.' It ruled that the cashier did not need to recognize the act as criminal for coverage, only that the physical act of transferring money occurred in her presence and control. The court found Federal's interpretation would defeat the policy's purpose of protecting check cashing businesses from fraud. Consequently, VAM's motion for summary judgment was granted, and Federal's motion was denied.