United States District Court of the Eastern District of Pennsylvania (2019)
On January 25, 2019, Gennet, Kallmann, Antin, Sweetman & Nichols, P.C. successfully obtained Summary Judgment on behalf of Aspen Specialty Insurance Company in the United States District Court for the Eastern District of Pennsylvania. The insured, KA Together, Inc., leased certain residential property in Philadelphia to two individuals, only to find out that, when they ran out of money and abandoned the premises, they “gave” or allowed some squatters to occupy the space. When the insured’s manager confronted the squatters, he was importuned to let them stay for a little while– two weeks. At the end of the two-week period, the squatters called to request more time and the manager allowed them an additional week. A week later, one of the squatters called him, begging for three more days, to which he again acceded. When the three days had passed, the manager went to the property with a contractor to change the locks, but found the individuals to be still there, but “packing and moving things down to the street level”. Upon seeing this, he allowed them another day to vacate the property.
On their way out, and as thanks for his kindness, they stuffed rags and other objects into the sinks and bathtubs, ran the water, and disappeared.
The property insurance policy issued by Aspen to the insured bore an exclusion for dishonest or criminal acts by persons to whom the insured “entrusted property”, and we argued, on behalf of Aspen, that the property, under the circumstances, had been “entrusted” to the squatters.
The court granted summary judgment to Aspen, based on case law elsewhere in the country recognizing that even temporary “entrustment”, not requiring a formal lease, would be enough to implicate the exclusion.