No “theft” occurred where the police obtained a search warrant, seized and later destroyed the insured’s marijuana. ( Barnett v. State Farm General Ins. Co. (2011) 200 Cal.App.4th 536)
Facts
Greg Barnett grew numerous marijuana plants in the backyard of his residence, and kept dried marijuana inside his house. Barnett maintained that he was permitted to possess the marijuana for medicinal purposes in accordance with California law.
The local police obtained a warrant authorizing them to search Barnett’s residence and to seize any marijuana found there. The officers searched Barnett’s property, dug up and seized the marijuana plants from Barnett’s backyard, and seized the dried marijuana (and related paraphernalia) from the house.
Shortly after the police raid, Barnett submitted a claim to his homeowner’s insurer, State Farm General Insurance Company. Barnett claimed that the value of the seized marijuana was $98,000.
The State Farm policy covered personal property against various named perils, including “theft.” The policy also covered “trees, shrubs and other plants” against various named perils, including “theft.”
The district attorney did not immediately file charges against Barnett, so Barnett filed a petition in court in an effort to regain possession of his property. The court denied Barnett’s petition on the grounds that the quantity he possessed exceeded the quantity that was permitted under California law. Shortly thereafter, the police destroyed some of Barnett’s marijuana in a bulk narcotics burn.
Eventually, the district attorney filed criminal charges against Barnett for cultivation and possession of marijuana. While the criminal charges were pending, the police destroyed the rest of Barnett’s marijuana in another bulk narcotics burn.
Barnett asserted that the police had intentionally provided incomplete information to the judge when they obtained the search warrant, and that the judge would not have issued the warrant if the police had provided complete information. Later, on a motion by the district attorney, the court dismissed the charges against Barnett.
State Farm concluded that no “theft” occurred, and State Farm therefore denied Barnett’s claim. Barnett then filed suit against State Farm, alleging causes of action for breach of contract and bad faith. The trial court agreed that no “theft” had occurred and entered summary judgment in favor of State Farm. Barnett then appealed.
Holding
The Court of Appeal affirmed, holding that no “theft” occurred because the police seized the marijuana pursuant to a facially-valid search warrant. The appellate court ruled that, although the policy did not define the term “theft,” the term is commonly understood to refer to a criminal taking, i.e., a taking “without a good faith claim of right.” The court also noted that, per California Penal Code section 484, a “theft” occurs when someone “feloniously” steals, takes, carries, leads, or drives away the personal property of another with the intent to permanently deprive the owner of the property.
Here, the police department’s seizure of Barnett’s marijuana at his home pursuant to a search warrant did not constitute a “theft” because the claim of right dispelled the criminal character necessary to constitute a theft within the common meaning of the word.
Comment
Insurance carriers generally do not face many first-party claims arising out of taking of property by law enforcement authorities. However, insurers often face first-party claims arising out of taking of property by civil disputants (e.g., spouses or business partners) who claim ownership of the property.
This case supports the notion that taking property based on a claimed right generally is not a “theft,” even if the claimed right later is proved to be invalid. If the claimed right later is proved to be invalid, the true owner of the property might be able to establish that the taker committed some kind of civil conversion, but the owner will have difficulty proving that the taker committed a criminal “theft.”