In his 1892 paper, “On Sense and Reference,” Gottlob Frege, the German philosopher who inspired the work of Bertrand Russell, explained that the definition of a word or name can have two components. One, “reference” (or “referent”), is simply the person or object to which the word refers. The “reference” of “Napoleon Bonaparte” is the French emperor who bore that name. The second element, “sense,” is the name’s “mode of presentation,” which reflects the manner in which the speaker wishes to present the object of reference. Hence, Frege observed, “the victor at Jena” is another name for the man we call “Napoleon Bonaparte.” It has the same reference as a third name, “the vanquished at Waterloo.” But “the victor at Jena” and “the vanquished at Waterloo” have different senses, because they “present” different “aspects” of the same diminutive tyrant.
Frege’s insight does not appear to have troubled the deliberations of the Supreme Court of South Dakota, which recently had to construe the word “windmills” in a property insurance policy. The plaintiff in the case was Ass Kickin Ranch, LLC (focused on the referent, the court’s opinion simply used the term, “Ranch”). Ass Kickin bought the unassembled parts of two wind turbines, which it intended to assemble, affix to a foundation and attach to an electric current transmitter. Before it could do so, the shop building in which the parts were stored burned down, and its contents were destroyed. Ass Kickin submitted a claim under its property insurance policy, which expressly excluded coverage for “fences, windmills, windchargers, or their towers.” In Ass Kickin Ranch LLC v. North Star Mut. Ins. Co., No. 26291 (S.D. Oct. 17, 2012), the court held that coverage was not required.
Although Ass Kickin’s turbines were unassembled, the court noted that Ass Kickin intended to use them as windmills by placing them on cement footings and connecting them to a power source. Thus, the reference of the word “windmill,” as used in the exclusion, was the same, regardless of whether the windmill was intact or in pieces. What the court failed to consider was whether the sense of the word “windmill” presented the same aspect of the referent that could be expressed by the term, “a pile of windmill parts.” In particular, the court did not consider whether “a pile of windmill parts” presented an aspect that was within the scope of the risk the insurer had intended to assume when it issued a policy that included coverage for unscheduled farm personal property.
On the other hand, the sense of a policy seems to have been decisive in Chaitman v. Chubb Ins. Co. of New Jersey, Nos. L-1518-09, L-0794-10, L-0445-10, L-0443-10, and L-0446-10 (N.J. App. Ct. Dec. 14 2012), a suit that was brought by certain investors in Bernie Madoff’s Ponzi scheme. The investors sent Madoff money by check or wire transfer. Madoff deposited the money into his company’s account, then moved it into the accounts of other investors; he never used it to create individual accounts for the members of this group.
The investors had homeowners policies that covered the loss of “legal tender” and “bank notes” up to $1,500, and “securities” and “accounts” up to $5,000. The limits did not apply, however, “when this property is located in a bank vault or bank safe deposit box.” In its opinion in Chaitman, a New Jersey appellate court reported that the investors claimed the money Madoff stole from them had constituted “accounts located in a bank vault or bank safe deposit box.” The court strongly disagreed with that claim, finding that it was “not premised on the straightforward meaning of the [policy] language.”
The policies in question also covered “legal tender” that was “located in a bank vault,” and it’s hard to see why the “straightforward meaning” of those terms would not refer to the money that was deposited in Madoff’s bank accounts. The court appears to have intuited, however, that the sense of these terms did not present the aspect of money that happens to pass through a bank in the course of being obtained by fraud.
