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Computer Works, Inc. v. CNA Insurance Companies
Citations: 757 P.2d 167; 12 Brief Times Rptr. 707; 1988 Colo. App. LEXIS 192; 1988 WL 71294Docket: 86CA0807
Court: Colorado Court of Appeals; May 12, 1988; Colorado; State Appellate Court
Computer Works, Inc. appealed a district court judgment which declared that a loss from a counterfeit bank cashier's check was not covered under its insurance policy with CNA Insurance Companies. The policy provided coverage for "accidental direct physical loss" with specific exclusions, one of which excluded losses resulting from "fraudulent scheme, trick, device or false pretense." However, the exclusion did not apply to the "acceptance in good faith of any post office or express money order or counterfeit United States or Canadian paper money." The case arose when Computer Works received a counterfeit cashier's check as payment for computer equipment. After CNA rejected the claim for this loss, Computer Works initiated litigation. The trial court found the policy's exclusion clear and determined that a cashier's check did not qualify as a money order issued by a post office or express company, thus falling under the exclusion. The court explained that a cashier's check is a check drawn on a bank, creating an obligation for the bank to the payee, whereas a money order is not a negotiable instrument and has different characteristics. The court noted that insurers might be inclined to cover losses from counterfeit money orders due to the fewer institutions involved compared to checks issued by numerous banks, influencing the risk assessment for insurance coverage. Ultimately, the court affirmed the trial court's judgment, concluding that the terms of the insurance policy did not cover the loss from the cashier's check. Judges Pierce and Metzger concurred with the decision.