Fdic v. John Doak
685 F. App'x 565
| 9th Cir. | 2017Background
- FDIC, acting as receiver for County Bank, sued BancInsure asserting insurance coverage; BancInsure moved for summary judgment and won in district court; FDIC appealed.
- The dispute centers on a BancInsure directors-and-officers policy containing an "insured v. insured" exclusion that expressly disbars claims by "any... receiver of the company."
- FDIC concedes it is acting as County Bank’s receiver and seeks coverage for claims it brought in that capacity.
- FDIC argues the term "receiver" in the exclusion is ambiguous and that prior-policy endorsements (which deleted a regulatory exclusion) and extrinsic evidence support its interpretation that the FDIC should be covered.
- BancInsure contends the exclusion’s plain language bars any claim brought by a receiver, including the FDIC, and that the regulatory-exclusion endorsement expressly did not change other terms (including the insured-v-insured exclusion).
- The Ninth Circuit affirmed summary judgment for BancInsure, holding the exclusion unambiguous and applicable to the FDIC as receiver; extrinsic evidence did not create ambiguity, and cited contrary federal decisions were distinguishable.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the "insured v. insured" exclusion bars claims brought by FDIC as receiver | "Receiver" is ambiguous; context and prior endorsement deletion show FDIC claims should be covered | Exclusion plainly excludes claims by any receiver; endorsement expressly did not alter other terms | Exclusion unambiguous; it bars FDIC claims as receiver |
| Whether deletion of a separate regulatory-exclusion in a prior policy alters scope of insured-v-insured exclusion | Deletion of regulatory exclusion implies broader coverage now, supporting FDIC interpretation | Endorsement deleting regulatory exclusion explicitly did not vary other policy terms, so insured-v-insured remains unchanged | Deletion did not change insured-v-insured; exclusion still bars FDIC claims |
| Whether extrinsic evidence renders the exclusion ambiguous | Extrinsic evidence (surrounding circumstances) makes the term "receiver" reasonably susceptible to FDIC’s meaning | Extrinsic evidence supports BancInsure’s plain reading and does not create ambiguity | Court: extrinsic evidence supports insurer’s interpretation; no ambiguity sufficient to alter plain meaning |
| Whether contrary federal decisions require a different result | FDIC cites cases refusing to bar FDIC-receiver claims under insured-v-insured exclusions | Insurer: cited cases are distinguishable because their policies did not expressly exclude claims by a "receiver" | Court: those cases are distinguishable; this policy explicitly excludes receivers so they do not control |
Key Cases Cited
- Cal. State Auto. Ass'n Inter-Ins. Bureau v. Warwick, 550 P.2d 1056 (Cal. 1976) (interpretation of the word "any" as broad and all-embracing)
- Pacific Gas & Electric Co. v. G. W. Thomas Drayage & Rigging Co., 442 P.2d 641 (Cal. 1968) (permitting extrinsic evidence to interpret contract ambiguity)
- Dore v. Arnold Worldwide, Inc., 139 P.3d 56 (Cal. 2006) (latent ambiguity may be shown by extrinsic evidence)
- Am. Alt. Ins. Corp. v. Superior Court, 37 Cal. Rptr. 3d 918 (Ct. App. 2006) (deletion of an exclusion may be considered in scope-of-coverage analysis)
- Hervey v. Mercury Cas. Co., 110 Cal. Rptr. 3d 890 (Ct. App. 2010) (deletion of an endorsement does not necessarily alter other policy provisions)
- Wolf v. Superior Court, 8 Cal. Rptr. 3d 649 (Ct. App. 2004) (use of extrinsic evidence in contract interpretation)
- Safeco Ins. Co. of Am. v. Robert S., 28 P.3d 889 (Cal. 2001) (ambiguous-term analysis where insurer's interpretation would render omission meaningless)
- FDIC v. BancInsure, Inc., 796 F.3d 1226 (10th Cir. 2015) (related federal precedent addressing receiver-exclusion language)