AQUA STAR USA CORP v. TRAVELERS CASUALTY AND SURETY COMPANY OF AMERICA (2018)

MEMORANDUM **

Aqua Star (USA) Corp. (“Aqua Star”) appeals the district court’s grant of summary judgment to Travelers Casualty and Surety Company of America (“Travelers”) in an insurance dispute over whether a Travelers “Computer Fraud” policy covers Aqua Star’s losses from a fraudulent email scheme. We have jurisdiction under 28 U.S.C. § 1291, and we affirm.

The parties agree that Washington law governs the interpretation of the contract. In Washington, “[a]n insurance policy is construed as a whole, with the policy being given a fair, reasonable, and sensible construction as would be given to the contract by the average person purchasing insurance.” Weyerhaeuser Co. v. Commercial Union Ins. Co., 142 Wash. 2d 654, 666, 15 P.3d 115 (2000), as amended (Jan. 16, 2001) (internal quotation marks omitted). We “must” enforce “clear and unambiguous” policy language “as written.” Id. Applying these principles, even assuming without deciding that the policy generally covers “Computer Fraud” of the kind that duped Aqua Star, the policy’s exclusions foreclose coverage.

Exclusion G unambiguously provides that the policy “will not apply to loss or damages resulting directly or indirectly from the input of Electronic Data by a natural person having the authority to enter the Insured’s Computer System․” Aqua Star’s losses resulted from employees authorized to enter its computer system changing wiring information and sending four payments to a fraudster’s account. These employees “ha[d] the authority to enter” Aqua Star’s system when they “input” Electronic Data, on Aqua Star computers, to change the wiring information and authorize the four wires. Their conduct fits squarely within the Exclusion. While other contractual exclusions may also bar coverage in this case, we need not go any further.

Washington’s rule of efficient proximate cause does not help Aqua Star because that rule “applies only when two or more perils combine in sequence to cause a loss and a covered peril is the predominant or efficient cause of the loss.” Vision One, LLC v. Philadelphia Indem. Ins. Co., 174 Wash. 2d 501, 519, 276 P.3d 300 (2012) (first emphasis added). Where, as here, there is only one “peril”—Computer Fraud—“[a]n insured may not avoid a contractual exclusion merely by affixing an additional label or separate characterization to the act or event causing the loss.” Kish v. Ins. Co. of N. Am., 125 Wash. 2d 164, 170, 883 P.2d 308 (1994).

AFFIRMED.