St. Paul Mercury Insurance Co. v. Federal Deposit Insurance Corp.
669 F. App'x 851
| 9th Cir. | 2016Background
- St. Paul Mercury Insurance appeals district court ruling granting FDIC summary judgment and denying Travelers summary judgment.
- Court reviews de novo; Ninth Circuit affirms district court.
- Policy language: unrepaid loan carve-out argued to bar coverage; ambiguity issues analyzed.
- Insured v. insured exclusion analyzed for FDIC as receiver; ambiguity resolved in favor of coverage.
- Court concludes the carve-out is ambiguous and does not unambiguously bar tort-damage coverage; insured v. insured exclusion is ambiguous and does not bar coverage for FDIC actions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Unrepaid loan carve-out ambiguous as to coverage | Travelers argues carve-out unambiguously bars coverage | FDIC contends carve-out is ambiguous or does not apply to tort damages | Ambiguous; may allow coverage |
| Insured v. insured exclusion as applied to FDIC as receiver | Travelers argues exclusion bars FDIC claims | FDIC argues exclusion applies or is unambiguous | Ambiguous; does not bar coverage |
Key Cases Cited
- Waller v. Truck Ins. Exch., Inc., 900 P.2d 619 (Cal. 1995) (ambiguity when multiple reasonable constructions exist)
- Powerine Oil Co., Inc. v. Superior Ct., 118 P.3d 589 (Cal. 2005) (protect insured's reasonable expectation of coverage)
- Foster-Gardner, Inc. v. Nat’l Union Fire Ins. Co., 959 P.2d 265 (Cal. 1998) (baseline for construing ambiguity against insurer)
- O’Melveny & Myers v. FDIC, 512 U.S. 79 (1994) (Supreme Court discussion relevant to insured v. insured issue)
- Biltmore Associates, LLC v. Twin City Fire Insurance Co., 572 F.3d 663 (9th Cir. 2009) (ambiguity in insured v. insured exclusion)