Schwartz v. Employers Mutual Liability Ins. Co. of Wis.
| Decision Date | 13 February 1959 |
| Citation | 170 F. Supp. 194 |
| Parties | Leo SCHWARTZ, as Liquidating Agent of Empirt Jerome Barn Federal Credit Union, Plaintiff, v. EMPLOYERS MUTUAL LIABILITY INSURANCE COMPANY OF WISCONSIN and Credit Union National Association, Defendants. |
| Court | U.S. District Court — Southern District of New York |
Flatow, Smith & Herman, New York City, Hyman Herman, New York City, of counsel, for plaintiff.
Hendler & Murray, New York City, Jerome Murray, New York City, of counsel, for defendant Employers Mut. Liability Ins. Co. of Wisconsin.
Carroll Metzner, Charles P. Seibold, Madison, Wis., Sullivan & Cromwell, New York City, for defendant Credit Union Nat. Ass'n, Inc.
The plaintiff, a New York citizen, as liquidating agent of Empirt Jerome Barn Federal Credit Union, commenced this action in the New York State Supreme Court against two defendants, Employers Mutual Liability Insurance Company of Wisconsin, a Wisconsin corporation, and the Credit Union National Association, a New York corporation. On petition of the defendant insurance company, the Wisconsin corporation, the action was removed to this Court. The plaintiff now moves to remand the action to the State Court.
The action centers about a fidelity bond issued by the defendant insurance company covering employees of the credit union of which plaintiff is the liquidating agent. Three claims are asserted. The first, based upon the fidelity bond, is against the defendant insurance company and alleges that plaintiff credit union sustained $146,429.11 in losses by reason of fraud, dishonesty or lack of faithful performance on the part of its employees, and that despite filing of due proof of loss, the defendant has only paid $75,655.38 and refuses to pay the balance.
The second claim is asserted against both defendants. The allegations of the first claim are repeated. In addition it is further alleged that the defendant credit union is the agent of the codefendant insurance company and, as such, assured plaintiff's credit union that it had sufficient coverage and sufficient excess coverage under the bonds issued; that one of the reasons assigned by the codefendant insurance company for the nonpayment of the balance of the claimed loss, as alleged in the first cause of action, is insufficiency of coverage, and that the codefendant's position in rejecting the claim is contrary to the assurance and representation made by its agent, the codefendant credit union.
The third cause of action is asserted only against the defendant credit union. The allegations of the first and second causes of action are repeated. These include the allegations that the defendant insurance company issued the policy and that the codefendant credit union was its agent. It is further alleged that plaintiff's credit union was affiliated with the defendant credit union; that the latter warranted as part of its services to its affiliate that it would properly advise and supervise with respect to adequate coverage with reference to...
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