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Onebeacon Midwest Insurance Co. v. Ariail

United States District Court, N.D. Georgia, Gainesville Division

March 27, 2015

ONEBEACON MIDWEST INSURANCE COMPANY, Plaintiff,
v.
EDWARD D. ARIAIL, et al., Defendants.

ORDER

RICHARD W. STORY, District Judge.

This case comes before the Court on the FDIC-R's Motion to Dismiss for Lack of Subject Matter Jurisdiction [16], the FDIC-R's Motion to Dismiss First Amended Complaint for Lack of Subject Matter Jurisdiction [26], the Director and Officer Defendants' Motion to Dismiss First Amended Complaint for Lack of Subject Matter Jurisdiction [29], and Plaintiff's Motion for Leave to File Surreply and Request for Oral Argument [34]. After reviewing the record, the Court enters the following Order.

Background

Plaintiff OneBeacon Midwest Insurance Company sold to the individually-named defendants and Habersham Bank a management and professional liability policy for the claims-made policy period of August 31, 2007 through August 31, 2010, and extended reporting-period coverage of August 31, 2010 to August 31, 2011. (Am. Compl., [19] ¶¶ 18-19.) The Policy provides that "[OneBeacon] will pay on behalf of the Insured Persons, Loss for which the Insured Persons are not indemnified by the Financial Institution and for which the Insured Persons are legally obligated to pay for reason of Claims first made during the Policy Period or the Extended Reporting Period, if elected, against the Insured Person for Wrongful Acts." (Insurance Policy, [26-2] at 5.) "Loss" is defined in the Policy as:

any amount which the Insureds are legally obligated to pay resulting from a Claim, including damages, judgments, settlements, Defense Costs, pre- and post-judgment interest, punitive or exemplary damages and the multiple portion of any multiplied damage award..., where insurable by law.

(Id. at 12.) "Loss" under the Policy does not include "any unpaid, unrecoverable or outstanding loan, lease or extension of credit to any customer or any forgiveness of debt; [or]... any restitution, disgorgement, return or repayment of any sums." (Id.) These exceptions are referred to as the "unpaid loan carve-out" and "restitution carve-out." (Am. Compl., [19] ¶¶ 38, 48.)

The Policy also includes an "insured v. insured" exclusion:

The Insurer shall not be liable to make any payment for Loss in connection with any Claim by, on behalf of, or at the behest of any Insured in any capacity....

(Insurance Policy, [26-2] at 18) (emphasis in original). Pursuant to an exception to this exclusion, coverage is ensured for:

[A] claim by a security holder of the Financial Institution as a derivative action on behalf of the Financial Institution; provided such Claim is brought independently of, and totally without solicitation, assistance, participation, or intervention of any Insured.

(Id.) (emphasis in original).

On February 18, 2011, the Georgia Department of Banking and Finance closed Habersham Bank and named the Federal Deposit Insurance Corporation as receiver for the bank (FDIC-R). (Am. Compl., [19] ¶ 2.) The FDIC-R succeeded to the rights, titles, powers, and privileges of the Bank, the Bank's stockholders, its account holders, and its depositors. See 12 U.S.C. § 1821(d)(2)(A). The FDIC-R also retained the authority to pursue claims against former bank directors and officers who may be personally liable for claims of negligence, gross negligence, and breach of fiduciary duty. Id . § 1821(k).

After its appointment as receiver, the FDIC-R gave notice of the Bank's failure to potential creditors and claimants, including those shown on its books. (Am. Compl., [19] ¶ 2.) Additionally, the FDIC-R published a notice of the Bank's failure once a month for three consecutive months and posted detailed information to the FDIC-R's website. (Def.'s Mot. to Dismiss, [26] at 8.) The notices stated that any creditor or claimant with a claim related to the Bank's assets had to file that claim with the FDIC-R as part of its administrative claims process on or before May 25, 2011, 90 days after publication of the notices. (Id.)

On February 24, 2011, the FDIC-R sent notice to OneBeacon of its appointment and specifically indicated that "[OneBeacon] may have a claim against the Failed Institution" and that "any claims against the failed Institution must be filed on or before May 25, 2011, " the bar date. ...


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