Wintermute v. Kansas Bankers Surety Co., 630 F.3d 1063

KBS issued a D&O liability policy to SNB; Wintermute and Sinclair were directors and faced criminal charges arising from SNB acquisition and related loans.
Wintermute was convicted on two preacquisition counts and acquitted on four postacquisition counts; the civil action against KBS followed.
Wintermute alleged KBS withheld exculpatory crime bond documents, seeking coverage and damages for defense costs under the policy.
The district court granted summary judgment to KBS on the contract claim, and denied Wintermute's motion to amend a tort claim; on appeal, the panel reversed in part and remanded.
On remand, Wintermute sought to amend to include noncovered counts and to assert coverage for defense costs; the district court again denied, applying res judicata and law of the case.
The Eighth Circuit affirmed denial of the tort-claim amendment but reversed the grant of summary judgment on the contract claim, sending the case back for further fact-finding on exclusions.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether res judicata bars amendment of the tort claim	Wintermute seeks to amend to include noncovered counts previously dismissed.	Res judicata bars adding claims already decided or within the same judgment.	Amendment barred; district court did not abuse discretion.
Whether the policy provides coverage for Loss in connection with the criminal indictment	Loss includes defense costs for a claim arising from wrongful acts; covered counts trigger defense and indemnity.	There is no 'claim for Loss' for a criminal indictment absent a monetary obligation; no coverage.	There is coverage for Loss arising from the wrongful acts; exclusions must apply to preclude.
Whether the personal profit exclusion precludes coverage for the covered counts	The exclusion cannot apply based solely on indictment allegations; factual proof of gain is required.	Allegations of personal profit trigger exclusion regardless of outcome.	Exclusion requires factual determination of actual gain; summary judgment improper on this basis; remand for factfinding.
Whether the dishonesty exclusion applies to the covered counts given acquittal and noninvolvement	Dishonesty exclusion should not apply if Wintermute was not involved in the dishonest acts.	Counts allege dishonest acts; exclusion bars coverage regardless of acquittal.	Dishonesty exclusion requires showing Wintermute was involved in the dishonest acts; factual disputes remain; remand warranted.

McAninch v. Wintermute, 491 F.3d 759 (8th Cir. 2007) (reversed in part, remanded on insurance contract interpretation)
Lair v. Oglesby, 14 F.3d 15 (8th Cir. 1993) (res judicata scope in multi-claim actions)
Yankton Sioux Tribe v. U.S. Dep't of Health & Human Servs., 533 F.3d 634 (8th Cir. 2008) (res judicata applicability to final judgments under 8th Cir.)
Popoalii v. Corr. Med. Servs., 512 F.3d 488 (8th Cir. 2008) (leave to amend denied if futile due to res judicata/law of the case)
Polychron v. Crum & Forster Ins. Cos., 916 F.2d 461 (8th Cir. 1990) (coverage for defense costs under D&O policy; interpretation of Loss)
Pendergest-Holt v. Certain Underwriters at Lloyd's of London, 600 F.3d 562 (5th Cir. 2010) (meaning of 'in fact' in personal profit exclusions)
Brown & LaCounte, L.L.P. v. Westport Ins. Corp., 307 F.3d 660 (7th Cir. 2002) (interpretation of personal profit exclusion and 'in fact' language)
Madden v. Cont'l Cas. Co., 922 S.W.2d 731 (Ark. App. 1996) (duty to defend; allegations vs. actual gain in exclusion analysis)
Zutz v. Nelson, 601 F.3d 842 (8th Cir. 2010) (standard for appellate review of amended-claim decisions)
Homebank of Ark. v. Kan. Bankers Sur. Co., 2008 WL 2704670 (E.D. Ark. 2008) (district-level treatment of exclusions under D&O policy)