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Elaborate Jewelry Heist Results in No Coverage for Jewelry Store's Loss Under Dishonest Entrustment Exclusion | Cozen O'Connor


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The Appellate Division of the Supreme Court of New York has provided some clarity to New York businesses and their insurers dealing with loss resulting from fraudulent entrustment. In 
Crown Jewels Estate Jewelry, Inc. v. Underwriters At Interest At Lloyd’s London, Case No. 2020-04312 (N.Y. App. Div. May 13, 2021), the court held that coverage under a dishonest entrustment exclusion was properly denied where an individual fraudulently convinced a high end jewelry store to let him borrow five pieces of jewelry.
In a Scorsese-like plot, Paul Castellana, the plaintiff, emailed Crown Jewels Estate Jewelry, a high-end jeweler, saying he worked for Sony Pictures International and asked to borrow jewelry for a video he said he was shooting with Jennifer Lopez. After Crown Jewels agreed to lend Castellana five pieces of jewelry worth $2.09 million, it received a certificate of insurance. A reference also confirmed ....

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