31 F.3d 285 (5th Cir. 1994), 93-3730, Resolution Trust Corp. v. Ayo

Docket Nº:93-3730, 93-3732.
Citation:31 F.3d 285
Party Name:RESOLUTION TRUST CORPORATION, in its Capacity as Receiver of Peoples Federal Savings and Loan Association, Plaintiff-Appellant Cross Appellee, v. Donald J. AYO, Donovan J. Barker, George H. Diedrick, Jr., Ambrose H. Landry, Succession of John F. Pugh, Sr., and Troy W. Thompson, Jr., Defendants. Fidelity and Deposit Company of Maryland, Defendant-Ap
Case Date:September 09, 1994
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit
 
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Page 285

31 F.3d 285 (5th Cir. 1994)

RESOLUTION TRUST CORPORATION, in its Capacity as Receiver of

Peoples Federal Savings and Loan Association,

Plaintiff-Appellant Cross Appellee,

v.

Donald J. AYO, Donovan J. Barker, George H. Diedrick, Jr.,

Ambrose H. Landry, Succession of John F. Pugh,

Sr., and Troy W. Thompson, Jr., Defendants.

Fidelity and Deposit Company of Maryland, Defendant-Appellee

Cross Appellant.

RESOLUTION TRUST CORPORATION, Plaintiff-Appellant,

v.

Louis A. MIRAMON, Jr., et al. Defendants,

Louis A. Miramon, Jr., et al., Defendants-Appellants,

Fidelity & Deposit Company of Maryland, Defendant-Appellee.

Nos. 93-3730, 93-3732.

United States Court of Appeals, Fifth Circuit

September 9, 1994

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Page 287

Kyle M. Keegan, Victor L. Roy, Susannah M. DeNicola, Roy, Kiesel & Tucker, Baton Rouge, LA, for appellant No. 93-3730.

John L. Lanier, Pugh, Lanier and Riviere, Thibodaux, LA, for amicus-Ayo, et al.

Eugene R. Preaus, Diane L. Matthews, Preaus, Roddy & Krebs, New Orleans, LA, for appellee in No. 93-3730.

George D. Fagan, Leake & Andersson, New Orleans, LA, for Cook, Fritchie, Lowry, Qulliber & Wunder.

Harold B. Carter, Jr., Stephen L. Williamson, Montgomery, Barnett, Brown, Reed, Hammond & Mintz, New Orleans, LA, for Miramon, Englande, Wascom.

Anita M. Warner, Matthew K. Brown, New Orleans, LA, Robert E. Arceneaux, Pinkie C. Wilkerson, Barham & Arceneaux, Grambling, LA, for RTC.

Richard T. Simmons, Jr., Kurt D. Engelhardt, Hailey, McNamara, Hall, Larmann & Papale, Metairie, LA, for Bossier.

James T. Flanagan, Mollere & Flanagan, Metairie, LA, for Fitzpatrick & Thomas.

C. Allen Hennesy, John M. Girault, Monroe & Lemann, New Orleans, LA, for Becker.

Eugene R. Preaus, Diane Lloyd Matthews, Preaus, Roddy & Krebs, New Orleans, LA, for appellee in No. 93-3732.

Appeals from the United States District Courts for the Eastern District of Louisiana.

Before REYNALDO G. GARZA, SMITH, and PARKER, Circuit Judges.

REYNALDO G. GARZA, Circuit Judge:

The above consolidated cases were brought by the RTC against former officers and directors of banks who carried Director & Officer Liability Policies ("D & O") with Fidelity & Deposit Co. of Maryland ("F & D"). In both cases, the district judges found that no genuine issue of material fact existed, and granted summary judgment in favor of F & D on the grounds that the insureds failed to comply with the notice requirements of the F & D policy. The relevant portions of the policies for each case are identical. The issues of law presented for appeal are also substantially the same for both cases. For the following reasons, we affirm the district courts decisions.

FACTS

RTC V. MIRAMON

The individual defendants in this case are former directors and officers of the federally insured thrift South Savings and Loan Association ("South Savings"). In 1982, F & D issued an insurance policy on behalf of South Savings and its officers and directors providing coverage for director and officer liability. This policy was effective between May 3, 1982 and May 31, 1985. In 1985, F & D issued a second director and officer liability policy in favor of South Savings which became effective on May 31, 1985. South Savings' insurance coverage with F & D terminated on May 31, 1986. 1

On August 7, 1992, the Resolution Trust Corporation ("RTC"), as receiver of South Savings, instituted this litigation against the director defendants. The RTC alleged that the directors were liable under theories of gross negligence and breach of fiduciary duty resulting from the directors' alleged misdealing in eight different transactions. 2 Additionally, RTC filed a third party action against F & D under Louisiana's direct action statute, La.R.S. 22:655. In this action, the RTC contends F & D is liable for the losses sustained as a result of the directors' alleged misconduct by virtue of the 1982 and

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1985 insurance policies. The directors filed cross-claims against F & D in which they assert that, under the director and officer liability policy, F & D has a duty to defend, including a duty to advance defense costs, and a duty to provide liability coverage.

The district judge concluded that both the RTC and the directors failed to point to any evidence which suggested that South Savings or the directors complied with the notice requirements of the policy, or that they even attempted to put F & D on notice for the claims and alleged misconduct asserted in this case. "To the contrary, the undisputed evidence, including South Savings' and the defendant directors' repeated denials that they had knowledge of any conduct that might lead to the filing of a claim in renewal application forms, establishes that no notice was provided to F & D as a matter of law." The judge noted that since the underlying facts in the case were undisputed, and these facts were insufficient to satisfy the notice requirements of the policy, summary judgment was proper.

RTC V. AYO

This suit was brought by the RTC, as receiver for Peoples Federal Savings & Loan Association, Thibodaux, Louisiana ("Peoples"), against certain directors and officers of Peoples and against its directors and officers liability insurance carrier, F & D, pursuant to the Louisiana Direct Action Statute, La.R.S. 22:655.

The RTC sought to recover losses in excess of $2.2 million sustained by Peoples as a result of the alleged acts and omissions of the individual directors. The claims arose from a number of different deficiencies relating to loan underwriting, collection, and management practices on approximately fifty (50) loan transactions. RTC alleges that claims covered under the policies issued to the directors were made against the directors by federal banking regulators during the policy period and/or that F & D received actual or constructive notice of such claims or potential claims during the policy period. The D & O policies at issue were in effect from June 25, 1983 through June 25, 1985, and from June 25, 1985 through June 25, 1986. 3 Similarly, the district court entered summary judgment in favor of F & D.

The Insurance Policies

The F & D policies are entitled "Directors and Officers Liability Insurance Policy Including Association Reimbursement." The policies in question are "claims made" policies, as opposed to the customary "occurrence" policy. Under claims made policies, the mere fact that an "act, error, or omission" occurs during the policy period is not sufficient to trigger insurance coverage. FDIC v. Mijalis, 15 F.3d 1314, 1330 (5th Cir.1994). In order to trigger coverage, such policies usually require that a claim be made against the insured during the policy period. The F & D policies also provide coverage for potential claims provided F & D...

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