Texas Ruling in $1.2 Million Gold Coin Conversion Case Benefits Insurer

After seeking the opinion of the Texas Supreme Court on it’s interpretation of policy language, the US Court of Appeals for the 5th Circuit has ruled that an insurer is not obligated to compensate a gold coin and precious metal dealer for the theft of more than $1 milion of gold coins obtained with fraudulent checks. The case is Dillon Gage v. Certain Underwriters at Lloyd’s, No. 20-10262, 2022 U.S. App. LEXIS 4264 (5th Cir. Feb. 16, 2022).

In 2018, gold coin and precious metal dealer Dillon Gage Inc. separately shipped $549,999 and $655,000 worth of gold coins to a thief who forged signatures on stolen checks to pay for the coins. Dillon Gage did not ship the coins until after the checks had provisionally cleared. The coins were shipped to the address on the checks, but the thief rerouted the shipments on the UPS website prior to delivery and picked the packages up from a UPS facility.