McCullough v. Fidelity & Deposit Co. case brief summary
2 F.3d 110 (1993)
CASE FACTS
Insurer issued four directors' and officers' liability policies to four affiliate banks. The banks provided the insurer with reports that described increasing loan losses and delinquencies and an annual report. A footnote of the annual report referred to the issuance of a cease and desist order by the Office of the Comptroller of the Currency (OCC). The OCC declared the bank insolvent and declared the FDIC as receiver. FDIC sued the banks' directors and officers for improperly administering loans. The insurer denied coverage. The FDIC then filed its declaratory judgment action against the insurer.
DISCUSSION
CONCLUSION
The court affirmed the district court's grant of summary judgment in favor of the insured and held that the insured was not required to provide coverage to the officers and directors of the insured banks in the FDIC's action against the insured banks because the insured banks failed to give the require notice to the insurer as required under the policy of the officers' and directors' acts or omissions.
Recommended Supplements for Corporations and Business Associations Law
2 F.3d 110 (1993)
CASE SYNOPSIS
Appellant Federal Deposit Insurance
Corporation (FDIC) sought review of the decision of the United
States District Court for the Southern District of Texas which found
no coverage under appellee insurer's policy and granted summary
judgment to insurer in FDIC's declaratory judgment action
against insurer to determine whether insurer provided coverage under
a directors' and officers' liability policy.CASE FACTS
Insurer issued four directors' and officers' liability policies to four affiliate banks. The banks provided the insurer with reports that described increasing loan losses and delinquencies and an annual report. A footnote of the annual report referred to the issuance of a cease and desist order by the Office of the Comptroller of the Currency (OCC). The OCC declared the bank insolvent and declared the FDIC as receiver. FDIC sued the banks' directors and officers for improperly administering loans. The insurer denied coverage. The FDIC then filed its declaratory judgment action against the insurer.
DISCUSSION
- The district court entered judgment in favor of the insurer.
- The court held that the policy required the insured to give notice of specified wrongful acts of officers and directors and that the banks did not give the insurer the required notice because it did not attach a copy of the cease and desist order and did not provide notice of the particular facts and the particular officers, or directors involved.
- Mere notice of the bank's worsening financial condition was not notice of the officer's or director's act, error, or omission.
CONCLUSION
The court affirmed the district court's grant of summary judgment in favor of the insured and held that the insured was not required to provide coverage to the officers and directors of the insured banks in the FDIC's action against the insured banks because the insured banks failed to give the require notice to the insurer as required under the policy of the officers' and directors' acts or omissions.
Recommended Supplements for Corporations and Business Associations Law
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