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The Collaborative Clearinghouse for Lawsuits and Other Claims Against ACE Group Insurance Companies

U.S. BANK NATIONAL ASSOCIATION, et al v. ACE AMERICAN INSURANCE COMPANY complaint

ATTENTION: It is possible that this information may no longer be current and therefore may be inaccurate. The index contains both open and closed cases and is not a complete list of cases in which an ACE Insurance Group company is involved. This information is provided to give interested persons an idea of the issues disputed in the indexed cases. For a full understanding of a case, one should read the rest of the court file, including the response. For the most up-to-date and complete information on a case, visit www.pacer.gov or contact the clerk of the relevant court.

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APPEAL,CLOSED,CV,PROTO
U.S. District Court
U.S. District of Minnesota (DMN)
CIVIL DOCKET FOR CASE #: 0:12−cv−03175−PAM−JSM
U.S. Bank National Association et al v. Indian Harbor Insurance
Company et al
Assigned to: Senior Judge Paul A. Magnuson
Referred to: Magistrate Judge Janie S. Mayeron
Demand: $9,999,000
Case in other court: USCA 8th Circuit, 15−01691
Cause: 28:1332 Diversity−Breach of Contract
Date Filed: 12/21/2012
Date Terminated: 12/22/2014
Jury Demand: Plaintiff
Nature of Suit: 110 Insurance
Jurisdiction: Diversity
Plaintiff
U.S. Bank National Association
a national banking association
represented by Marshall Gilinsky
Anderson Kill P.C.
110 Main Street Ste 4E
Burlington, VT 05401
802−399−2906
Email: mgilinsky@andersonkill.com
LEAD ATTORNEY
PRO HAC VICE
ATTORNEY TO BE NOTICED
Patrick J Boley
Larson King, LLP
30 E 7th St Ste 2800
St Paul, MN 55101−4922
651−312−6500
Fax: 651−312−6618
Email: pboley@larsonking.com
LEAD ATTORNEY
ATTORNEY TO BE NOTICED
Vivian Costandy Michael
Anderson Kill PC
1251 Avenue of the Americas
New York, NY 10020
212−278−1000
Email: vmichael@andersonkill.com
LEAD ATTORNEY
PRO HAC VICE
ATTORNEY TO BE NOTICED
William G Passannante
Anderson Kill P.C.
1251 Avenue of the Americas
New York, NY 10020−1182
(212) 278−1000
Email: wpassannante@andersonkill.com
MAY 19 2015 p 1
LEAD ATTORNEY
PRO HAC VICE
ATTORNEY TO BE NOTICED
Raymond A Mascia , Jr
Anderson Kill & Olick PC
1251 Avenue of the Americas
New York, NY 10020
212−278−1000
Email: rmascia@andersonkill.com
TERMINATED: 06/03/2014
PRO HAC VICE
John M Bjorkman
Larson King, LLP
30 E 7th St Ste 2800
St Paul, MN 55101−4922
651−312−6511
Fax: 651−312−6618
Email: jbjorkman@larsonking.com
ATTORNEY TO BE NOTICED
Plaintiff
U.S. Bancorp
a Delaware corporation
represented by Marshall Gilinsky
(See above for address)
LEAD ATTORNEY
PRO HAC VICE
ATTORNEY TO BE NOTICED
Patrick J Boley
(See above for address)
LEAD ATTORNEY
ATTORNEY TO BE NOTICED
Vivian Costandy Michael
(See above for address)
LEAD ATTORNEY
PRO HAC VICE
ATTORNEY TO BE NOTICED
William G Passannante
(See above for address)
LEAD ATTORNEY
PRO HAC VICE
ATTORNEY TO BE NOTICED
Raymond A Mascia , Jr
(See above for address)
TERMINATED: 06/03/2014
PRO HAC VICE
John M Bjorkman
MAY 19 2015 p 2
(See above for address)
ATTORNEY TO BE NOTICED
V.
Defendant
Indian Harbor Insurance Company
a North Dakota corporation
represented by Amy L Schwartz
Lapp Libra Thomson Stoebner & Pusch,
Chartered
120 S 6th St Ste 2500
Mpls, MN 55402
612−343−4970
Fax: 612−338−6651
Email: aschwartz@lapplibra.com
LEAD ATTORNEY
ATTORNEY TO BE NOTICED
James T. Sandnes
Skarzynski Black LLC
One Battery Park Plaza
32nd Floor
New York, NY 10004
212−820−7700
Fax: 212−820−7740
Email: jsandnes@skarzynski.com
LEAD ATTORNEY
PRO HAC VICE
ATTORNEY TO BE NOTICED
Richard T Thomson
Lapp Libra Thomson Stoebner & Pusch,
Chartered
120 S 6th St Ste 2500
Mpls, MN 55402
612−338−5815
Fax: 612−338−6651
Email: rthomson@lapplibra.com
LEAD ATTORNEY
ATTORNEY TO BE NOTICED
Tammy Yuen
Skarzynski Black LLC
One Battery Park Plaza 32nd Floor
New York, NY 10004
212−820−7700
Email: tyuen@skarzynski.com
LEAD ATTORNEY
PRO HAC VICE
ATTORNEY TO BE NOTICED
Tyler D Candee
MAY 19 2015 p 3
U.S. Bank, NA
800 Nicolelt Mall
BC−MN−H21N
INACTIVE
Minneapolis, MN 55402
612−303−7827
Fax: 612−303−7888
Email: tyler.candee@usbank.com
TERMINATED: 01/28/2014
Defendant
ACE American Insurance Company
a Pennsylvania corporation
represented by Edward P Gibbons
Walker Wilcox Matousek LLP
One North Franklin Street Suite 3200
Chicago, IL 60606
312−244−6700
Email: egibbons@wwmlawyers.com
LEAD ATTORNEY
PRO HAC VICE
ATTORNEY TO BE NOTICED
Tiffany Saltzman−Jones
Walker Wilcox Matousek LLP
1 N Franklin Street Ste 3200
Chicago, IL 60606
312−244−6700
Email: tsj@wwmlawyers.com
LEAD ATTORNEY
PRO HAC VICE
ATTORNEY TO BE NOTICED
Alec J Beck
Ford & Harrison LLP
225 South Sixth Street
Suite 3150
Minneapolis, MN 55402
612−486−1700
Fax: 612−486−1701
Email: abeck@fordharrison.com
ATTORNEY TO BE NOTICED
Date Filed # Page Docket Text
12/21/2012 1 COMPLAINT against All Defendants. ( Filing fee $ 350 receipt number
0864−3396582.) Filed by U.S. Bank National Associataion, U.S. Bancorp.
Filer requests summons issued. (Attachments: # 1 Exhibit(s) A−D, # 2 Civil
Cover Sheet) (Bjorkman, John) (Entered: 12/21/2012)
12/21/2012 2 RULE 7.1 DISCLOSURE STATEMENT. U.S. Bancorp is a corporate parent
of Plaintiff U.S. Bank National Associataion. (Bjorkman, John) (Entered:
12/21/2012)
MAY 19 2015 p 4
12/21/2012 3 RULE 7.1 DISCLOSURE STATEMENT. U.S. Bank National Association is
a wholly−owned subsidiary of Plaintiff U.S. Bancorp. (Bjorkman, John)
(Entered: 12/21/2012)
12/21/2012 4 TEXT−ONLY ENTRY. CLERK'S NOTICE OF INITIAL CASE
ASSIGNMENT. Case assigned to Judge Paul A. Magnuson per Master List
referred to Magistrate Judge Janie S. Mayeron. Please use case number
12−cv−3175 (PAM/JSM). (lmb) (Entered: 12/21/2012)
12/21/2012 5 Summons Issued as to ACE American Insurance Company, Indian Harbor
Insurance Company. (lmb) (Entered: 12/21/2012)
12/21/2012 6 TEXT ONLY ENTRY: Notice re: Non−Admitted Attorney
We have received documents listing William G. Passannante, Marshall
Gilinsky as counsel of record. If he or she wishes to be listed as an attorney of
record in this case, he or she must be admitted to the bar of the U.S. District
Court of Minnesota in accordance with Local Rule 83.5 (a), (b) and (c) or
temporarily admitted pro hac vice in accordance with Local Rule 83.5 (d) or
(e).
For more admissions information and forms, please see the Attorney Forms
Section of the courts website at
href=http://www.mnd.uscourts.gov/FORMS/court_forms.shtml#attorneyforms.
(lmb) (Entered: 12/21/2012)
02/21/2013 7 ORDER − In re dispositive−motion practice in cases assigned to Judge
Magnuson. Signed by Senior Judge Paul A. Magnuson on August 13, 2012.
(smr) (Entered: 02/21/2013)
04/18/2013 8 SUMMONS Returned Executed by U.S. Bank National Association, U.S.
Bancorp. ACE American Insurance Company served on 4/17/2013, answer
due 5/8/2013. (Bjorkman, John) (Entered: 04/18/2013)
04/18/2013 9 DOCUMENT FILED IN ERROR−INCORRECT EVENT−WILL REFILE.
ACKNOWLEDGEMENT OF SERVICE Executed as to 5 Summons Issued, 1
Complaint, by Indian Harbor Insurance Company Acknowledgement filed by
U.S. Bancorp, U.S. Bank National Association. (Bjorkman, John) Modified
text on 4/19/2013 (lmb). (Entered: 04/18/2013)
04/19/2013 10 SUMMONS Returned Executed by U.S. Bank National Association, U.S.
Bancorp. Indian Harbor Insurance Company served on 4/18/2013, answer due
5/9/2013. (Bjorkman, John) (Entered: 04/19/2013)
05/23/2013 11 STIPULATION re 1 Complaint, Date to Respond by Indian Harbor Insurance
Company, U.S. Bancorp, U.S. Bank National Association. (Attachments: # 1
Attachment Filed in Error−Exhibit(s) proposed order)(Boley, Patrick)
Modified text on 5/23/2013 (jz). (Entered: 05/23/2013)
05/23/2013 12 TEXT ONLY ENTRY: Notice re: Non−Admitted Attorney
We have received documents listing Tammy Yuen as counsel of record. If he
or she wishes to be listed as an attorney of record in this case, he or she must
be admitted to the bar of the U.S. District Court of Minnesota in accordance
with Local Rule 83.5 (a), (b) and (c) or temporarily admitted pro hac vice in
MAY 19 2015 p 5
accordance with Local Rule 83.5 (d) or (e).
For more admissions information and forms, please see the Attorney Forms
Section of the courts website at
href=http://www.mnd.uscourts.gov/FORMS/court_forms.shtml#attorneyforms.
(jz) (Entered: 05/23/2013)
05/23/2013 13 ORDER: Defendant Indian Harbor shall answer or otherwise respond to the
Complaint on or before June 10, 2013. Signed by Magistrate Judge Janie S.
Mayeron on 5/23/13. (jam) (Entered: 05/23/2013)
05/24/2013 14 MOTION for Admission Pro Hac Vice for Attorney Raymond A. Mascia, Jr..
Filing fee $ 100, receipt number 0864−3568384 by U.S. Bancorp, U.S. Bank
National Association. (Boley, Patrick) (Entered: 05/24/2013)
05/24/2013 15 MOTION for Admission Pro Hac Vice for Attorney William G. Passannante.
Filing fee $ 100, receipt number 0864−3568394 by U.S. Bancorp, U.S. Bank
National Association. (Boley, Patrick) (Entered: 05/24/2013)
05/24/2013 16 MOTION for Admission Pro Hac Vice for Attorney Marshall Gilinsky. Filing
fee $ 100, receipt number 0864−3568400 by U.S. Bancorp, U.S. Bank
National Association. (Boley, Patrick) (Entered: 05/24/2013)
05/24/2013 17 TEXT ONLY ENTRY. ORDER granting 14 Motion for Admission Pro Hac
Vice of Attorney Raymond A Mascia, Jr for U.S. Bancorp,U.S. Bank National
Association. Approved by Magistrate Judge Janie S. Mayeron on 5/24/2013.
(MAP) (Entered: 05/24/2013)
05/24/2013 18 TEXT ONLY ENTRY. ORDER granting 15 Motion for Admission Pro Hac
Vice of Attorney William G Passannante for U.S. Bancorp,U.S. Bank
National Association. Approved by Magistrate Judge Janie S. Mayeron on
5/24/2013. (MAP) (Entered: 05/24/2013)
05/24/2013 19 TEXT ONLY ENTRY. ORDER granting 16 Motion for Admission Pro Hac
Vice of Attorney Marshall Gilinsky for U.S. Bancorp,U.S. Bank National
Association. Approved by Magistrate Judge Janie S. Mayeron on 5/24/2013.
(MAP) (Entered: 05/24/2013)
06/06/2013 20 NOTICE of Appearance by Tyler D Candee on behalf of Indian Harbor
Insurance Company. (Candee, Tyler) (Entered: 06/06/2013)
06/06/2013 21 NOTICE of Appearance by Richard T Thomson on behalf of Indian Harbor
Insurance Company. (Thomson, Richard) (Entered: 06/06/2013)
06/06/2013 22 MOTION for Admission Pro Hac Vice for Attorney James Sandnes. Filing fee
$ 100, receipt number 0864−3582938 by Indian Harbor Insurance Company.
(Candee, Tyler) (Entered: 06/06/2013)
06/06/2013 23 MOTION for Admission Pro Hac Vice for Attorney Tammy Yuen. Filing fee
$ 100, receipt number 0864−3582949 by Indian Harbor Insurance Company.
(Candee, Tyler) (Entered: 06/06/2013)
06/07/2013 TEXT ONLY ENTRY−ORDER granting 22 Motion for Admission Pro Hac
Vice of Attorney James Sandnes for Indian Harbor Insurance Company.
Approved by Magistrate Judge Janie S. Mayeron on 6/7/2013. (MAP)
(Entered: 06/07/2013)
MAY 19 2015 p 6
06/07/2013 TEXT ONLY ENTRY−ORDER granting 23 Motion for Admission Pro Hac
Vice of Attorney Tammy Yuen for Indian Harbor Insurance Company.
Approved by Magistrate Judge Janie S. Mayeron on 6/7/2013. (MAP)
(Entered: 06/07/2013)
06/10/2013 24 ANSWER to Complaint by Indian Harbor Insurance Company. (Sandnes,
James) Modified text on 6/11/2013 (lmb). (Entered: 06/10/2013)
06/11/2013 25 STIPULATION regarding Defendant ACE American Insurance Company's
Date to Respond to Complaint by ACE American Insurance Company, U.S.
Bancorp, U.S. Bank National Association. (Beck, Alec) Modified filers on
6/12/2013 (lmb). (Entered: 06/11/2013)
06/11/2013 26 CERTIFICATE OF SERVICE ON PROPOSED ORDER by ACE American
Insurance Company re 25 Stipulation (Beck, Alec) (Entered: 06/11/2013)
06/12/2013 27 ORDER: ACE American Insurance Company answer due 6/24/2013. Signed
by Magistrate Judge Janie S. Mayeron on 6/12/13. (jam) Modified on
6/12/2013 (jam). (Entered: 06/12/2013)
06/14/2013 28 RULE 7.1 DISCLOSURE STATEMENT. XL Group plc is a corporate parent
of Defendant Indian Harbor Insurance Company. (Candee, Tyler) (Entered:
06/14/2013)
06/20/2013 29 MOTION for Admission Pro Hac Vice for Attorney Tiffany Saltzman−Jones.
Filing fee $ 100, receipt number 0864−3599105 by ACE American Insurance
Company. (Beck, Alec) (Entered: 06/20/2013)
06/20/2013 30 TEXT ONLY ENTRY. ORDER granting 29 Motion for Admission Pro Hac
Vice of Attorney Tiffany Saltzman−Jones for ACE American Insurance
Company. Approved by Magistrate Judge Janie S. Mayeron on 6/20/2013.
(MAP) (Entered: 06/20/2013)
06/21/2013 31 ORDER: Pretrial Conference set for 8/27/2013 10:30 AM in Judge's
Chambers, Suite 632 (STP) before Magistrate Judge Janie S. Mayeron. Signed
by Magistrate Judge Janie S. Mayeron on 6/21/13. (Attachments: # 1 Consent
Form)(jam) (Entered: 06/21/2013)
06/24/2013 32 RULE 7.1 DISCLOSURE STATEMENT. ACE American Insurance
Company is a Pennsylvania corporation and is 100% wholly−owned
subsidiary of INA Holdings Corporation. (Beck, Alec) Modified text on
6/24/2013 (lmb). (Entered: 06/24/2013)
06/24/2013 33 ANSWER to Complaint by ACE American Insurance Company.
(Attachments: # 1 Exhibit(s) A) (Beck, Alec) (Entered: 06/24/2013)
06/25/2013 34 MOTION for Admission Pro Hac Vice for Attorney Edward P. Gibbons.
Filing fee $ 100, receipt number 0864−3604671 by ACE American Insurance
Company. (Beck, Alec) (Entered: 06/25/2013)
06/26/2013 35 TEXT ONLY ENTRY. ORDER granting 34 Motion for Admission Pro Hac
Vice of Attorney Edward P Gibbons for ACE American Insurance Company.
Approved by Magistrate Judge Janie S. Mayeron on 6/26/2013. (MAP)
(Entered: 06/26/2013)
08/13/2013 36
MAY 19 2015 p 7
REPORT of Rule 26(f) Planning Meeting by ACE American Insurance
Company, Indian Harbor Insurance Company, U.S. Bancorp, U.S. Bank
National Association.(Sandnes, James) (Entered: 08/13/2013)
08/27/2013 37 Minute Entry for proceedings held before Magistrate Judge Janie S. Mayeron:
Pretrial Conference held on 8/27/2013. Pretrial Scheduling Order to be issued.
(jam) (Entered: 08/27/2013)
08/27/2013 38 PROTECTIVE ORDER. Signed by Magistrate Judge Janie S. Mayeron on
8/27/13. (jam) (Entered: 08/27/2013)
08/28/2013 39 PRETRIAL SCHEDULING ORDER: Amended Pleadings due by
12/31/2013, Discovery due by 3/31/2014, Motions (non−disp) due 4/14/2014,
Motions (disp) due by 11/1/2014, Ready for trial due by 1/15/2015. Signed by
Magistrate Judge Janie S. Mayeron on 8/28/13. (jam) (Entered: 08/28/2013)
01/27/2014 40 NOTICE OF ATTORNEY APPEARANCE/SUBSTITUTION for Indian
Harbor Insurance Company. (Candee, Tyler) (Entered: 01/27/2014)
02/14/2014 41 Joint MOTION to Stay Discovery by ACE American Insurance Company,
Indian Harbor Insurance Company. (Schwartz, Amy) (Entered: 02/14/2014)
02/14/2014 42 NOTICE OF HEARING ON MOTION 41 Joint MOTION to Stay Discovery :
Motion Hearing set for 2/28/2014 04:00 PM in Courtroom 6B (STP) before
Magistrate Judge Janie S. Mayeron. (Schwartz, Amy) (Entered: 02/14/2014)
02/14/2014 43 MEMORANDUM in Support re 41 Joint MOTION to Stay Discovery filed by
ACE American Insurance Company, Indian Harbor Insurance Company.
(Attachments: # 1 LR7.1/LR72.2 Word Count Compliance
Certificate)(Schwartz, Amy) (Entered: 02/14/2014)
02/14/2014 44 MEET and CONFER STATEMENT re 41 Motion to Stay filed by Indian
Harbor Insurance Company. (Schwartz, Amy) (Entered: 02/14/2014)
02/14/2014 45 CERTIFICATE OF SERVICE ON PROPOSED ORDER by ACE American
Insurance Company, Indian Harbor Insurance Company re 41 Joint MOTION
to Stay Discovery (Schwartz, Amy) (Entered: 02/14/2014)
02/14/2014 46 MOTION for Judgment on the Pleadings by Indian Harbor Insurance
Company. (Schwartz, Amy) (Entered: 02/14/2014)
02/14/2014 47 NOTICE OF HEARING ON MOTION 46 MOTION for Judgment on the
Pleadings : Motion Hearing set for 6/5/2014 11:00 AM in Courtroom 7D
(STP) before Senior Judge Paul A. Magnuson. (Schwartz, Amy) (Entered:
02/14/2014)
02/14/2014 48 MOTION for Judgment on the Pleadings by ACE American Insurance
Company. (Beck, Alec) (Entered: 02/14/2014)
02/14/2014 49 NOTICE OF HEARING ON MOTION 48 MOTION for Judgment on the
Pleadings : Motion Hearing set for 6/5/2014 11:00 AM in Courtroom 7D
(STP) before Senior Judge Paul A. Magnuson. (Beck, Alec) (Entered:
02/14/2014)
02/21/2014 50 MEMORANDUM in Opposition re 41 Joint MOTION to Stay Discovery filed
by U.S. Bancorp, U.S. Bank National Association. (Gilinsky, Marshall)
(Entered: 02/21/2014)
MAY 19 2015 p 8
02/21/2014 51 AFFIDAVIT of Marshall Gilinsky in OPPOSITION TO 41 Joint MOTION to
Stay Discovery filed by U.S. Bancorp, U.S. Bank National Association.
(Attachments: # 1 Exhibit(s) 1, # 2 Exhibit(s) 2, # 3 Exhibit(s) 3, # 4
Exhibit(s) 4, # 5 Exhibit(s) 5, # 6 Exhibit(s) 6, # 7 Exhibit(s) 7, # 8 Exhibit(s)
8, # 9 Exhibit(s) 9, # 10 Exhibit(s) 10, # 11 Exhibit(s) 11, # 12 Exhibit(s) 12, #
13 Exhibit(s) 13, # 14 Exhibit(s) 14, # 15 Exhibit(s) 15, # 16 Exhibit(s) 16, #
17 Exhibit(s) 17, # 18 Exhibit(s) 18). (Gilinsky, Marshall) Modified text on
2/24/2014 (lmb). (Entered: 02/21/2014)
02/21/2014 52 LR7.1/LR72.2 WORD COUNT COMPLIANCE CERTIFICATE by U.S.
Bancorp, U.S. Bank National Association re 50 Memorandum in Opposition
to Motion filed by U.S. Bancorp, U.S. Bank National Association. (Gilinsky,
Marshall) (Entered: 02/21/2014)
02/25/2014 53 Reply to Response to Motion re 41 Joint MOTION to Stay Discovery filed by
ACE American Insurance Company, Indian Harbor Insurance Company.
(Attachments: # 1 LR7.1/LR72.2 Word Count Compliance
Certificate)(Sandnes, James) (Entered: 02/25/2014)
02/28/2014 54 Minute Entry for proceedings held before Magistrate Judge Janie S. Mayeron:
Motion Hearing held on 2/28/2014 re 41 Joint MOTION to Stay Discovery
filed by Indian Harbor Insurance Company, ACE American Insurance
Company. Order to be issued. (las) (Entered: 03/03/2014)
03/11/2014 55 NOTICE of Filing of Official Transcript. This filing has 1 transcript(s)
associated with it. (CRB) (Entered: 03/11/2014)
03/11/2014 56 DIGITAL AUDION RECORDING TRANSCRIPT of Motions Hearing held
on February 28, 2014 before Magistrate Judge Janie S. Mayeron. (45 pages).
Transcriber: Carla Bebault (E−mail: Carla_Bebault@mnd.uscourts.gov.
Telephone: (651) 848−1220). Redaction Request due 4/1/2014. Redacted
Transcript Deadline set for 4/11/2014. Release of Transcript Restriction set for
6/9/2014. For information on redaction procedures, please review Local Rule
5.5. (CRB) (Entered: 03/11/2014)
03/12/2014 57 MOTION for Protective Order Limiting Deposition Subpoenas by U.S.
Bancorp, U.S. Bank National Association. (Gilinsky, Marshall) (Entered:
03/12/2014)
03/12/2014 58 NOTICE OF HEARING ON MOTION 57 MOTION for Protective Order
Limiting Deposition Subpoenas : Motion Hearing set for 3/26/2014 09:30 AM
in Courtroom 6B (STP) before Magistrate Judge Janie S. Mayeron. (Gilinsky,
Marshall) (Entered: 03/12/2014)
03/12/2014 59 MEMORANDUM in Support re 57 MOTION for Protective Order Limiting
Deposition Subpoenas filed by U.S. Bancorp, U.S. Bank National Association.
(Attachments: # 1 LR7.1/LR72.2 Word Count Compliance
Certificate)(Gilinsky, Marshall) (Entered: 03/12/2014)
03/12/2014 60 MEET and CONFER STATEMENT re 57 Motion for Protective Order filed
by U.S. Bancorp, U.S. Bank National Association. (Gilinsky, Marshall)
(Entered: 03/12/2014)
03/12/2014 61 AFFIDAVIT of Marshall Gilinsky in SUPPORT OF 57 MOTION for
Protective Order Limiting Deposition Subpoenas filed by U.S. Bancorp, U.S.
MAY 19 2015 p 9
Bank National Association. (Attachments: # 1 Exhibit(s) 1, # 2 Exhibit(s) 2, #
3 Exhibit(s) 3, # 4 Exhibit(s) 4, # 5 Exhibit(s) 5, # 6 Exhibit(s) 6)(Gilinsky,
Marshall) Modified on 3/13/2014 (kt). (Entered: 03/12/2014)
03/12/2014 62 MOTION to Compel by U.S. Bancorp, U.S. Bank National Association.
(Attachments: # 1 DOCUMENT FILED IN ERROR: Proposed
Order)(Gilinsky, Marshall) Modified on 3/13/2014 (kt). (Entered: 03/12/2014)
03/12/2014 63 NOTICE OF HEARING ON MOTION re 62 MOTION to Compel: Motion
hearing set for 3/26/14 at 9:30 a.m. before Magistrate Judge Janie S. Mayeron
in St. Paul. (Gilinsky, Marshall) Modified on 3/13/2014 (kt). (Entered:
03/12/2014)
03/12/2014 64 MEET and CONFER STATEMENT re 62 Motion to Compel filed by U.S.
Bancorp, U.S. Bank National Association. (Gilinsky, Marshall) (Entered:
03/12/2014)
03/12/2014 65 MEMORANDUM in Support re 62 MOTION to Compel filed by U.S.
Bancorp, U.S. Bank National Association. (Attachments: # 1 LR7.1/LR72.2
Word Count Compliance Certificate)(Gilinsky, Marshall) (Entered:
03/12/2014)
03/12/2014 66 AFFIDAVIT of Marshall Gilinsky in SUPPORT OF 62 MOTION to Compel
filed by U.S. Bancorp, U.S. Bank National Association. (Attachments: # 1
Exhibit(s) 1, # 2 Exhibit(s) 2, # 3 Exhibit(s) 3, # 4 Exhibit(s) 4, # 5 Exhibit(s)
5, # 6 Exhibit(s) 6, # 7 Exhibit(s) 7, # 8 Exhibit(s) 8, # 9 Exhibit(s) 9, # 10
Exhibit(s) 10, # 11 Exhibit(s) 11, # 12 Exhibit(s) 12, # 13 Exhibit(s) 13, # 14
Exhibit(s) 14, # 15 Exhibit(s) 15, # 16 Exhibit(s) 16, # 17 Exhibit(s) 17, # 18
Exhibit(s) 18, # 19 Exhibit(s) 19, # 20 Exhibit(s) 20, # 21 Exhibit(s)
21)(Gilinsky, Marshall) Modified on 3/13/2014 (kt). (Entered: 03/12/2014)
03/17/2014 67 ORDER denying 41 Motion to Stay. Signed by Magistrate Judge Janie S.
Mayeron on 03/17/2014. (las) (Entered: 03/17/2014)
03/19/2014 68 MEMORANDUM in Opposition re 62 MOTION to Compel and
Cross−Motion for Protective Order filed by ACE American Insurance
Company. (Attachments: # 1 Exhibit(s) Certificate of Compliance with LR
7.1)(Saltzman−Jones, Tiffany) (Entered: 03/19/2014)
03/19/2014 69 AFFIDAVIT of Tiffany Saltzman−Jones in OPPOSITION TO 62 MOTION
to Compel and in Support of (68) Cross−Motion for Protective Order filed by
ACE American Insurance Company. (Attachments: # 1 Exhibit(s), # 2
Exhibit(s))(Saltzman−Jones, Tiffany) (Entered: 03/19/2014)
03/19/2014 70 MEET and CONFER STATEMENT re 62 Motion to Compel filed by ACE
American Insurance Company. (Saltzman−Jones, Tiffany) (Entered:
03/19/2014)
03/19/2014 71 DOCUMENT FILED IN ERROR−WILL REFILE−NOTICE by ACE
American Insurance Company re 68 Memorandum in Opposition to Motion
Hearing set for 3/26/2014 9:30 AM in Courtroom 6B (STP) before Magistrate
Judge Janie S. Mayeron. (Saltzman−Jones, Tiffany) Modified on 3/20/2014
(akl). (Entered: 03/19/2014)
03/19/2014 72 RESPONSE in Opposition re 62 MOTION to Compel and Cross Motion for
Protective Order filed by Indian Harbor Insurance Company. (Attachments: #
MAY 19 2015 p 10
1 LR7.1/LR72.2 Word Count Compliance Certificate)(Sandnes, James)
(Entered: 03/19/2014)
03/19/2014 73 Declaration of Mark Vandevanter in Support of 72 Response in Opposition to
Motion filed by Indian Harbor Insurance Company. (Sandnes, James)
(Entered: 03/19/2014)
03/19/2014 74 MEMORANDUM in Opposition re 57 MOTION for Protective Order
Limiting Deposition Subpoenas filed by Indian Harbor Insurance Company.
(Attachments: # 1 LR7.1/LR72.2 Word Count Compliance
Certificate)(Sandnes, James) (Entered: 03/19/2014)
03/20/2014 75 MEET and CONFER STATEMENT re 62 Motion to Compel filed by Indian
Harbor Insurance Company. (Sandnes, James) (Entered: 03/20/2014)
03/20/2014 76 DECLARATION of James Sandnes in Opposition re 62 MOTION to Compel
filed by Indian Harbor Insurance Company. (Attachments: # 1 Exhibit(s) A, #
2 Exhibit(s) B, # 3 Exhibit(s) C, # 4 Exhibit(s) D)(Sandnes, James) Modified
on 3/20/2014 (kt). (Entered: 03/20/2014)
03/20/2014 77 NOTICE OF HEARING ON MOTION 62 MOTION to Compel , 57
MOTION for Protective Order Limiting Deposition Subpoenas : Motion
Hearing set for 3/26/2014 09:30 AM before Magistrate Judge Janie S.
Mayeron. (Saltzman−Jones, Tiffany) (Entered: 03/20/2014)
03/20/2014 78 NOTICE OF HEARING ON MOTION for a Protective Order Limiting
Deposition Notices (Sandnes, James) (Entered: 03/20/2014)
03/20/2014 79 CERTIFICATE OF SERVICE ON PROPOSED ORDER by ACE American
Insurance Company. (Beck, Alec) Modified text on 3/20/2014 (MMP).
(Entered: 03/20/2014)
03/21/2014 80 AFFIDAVIT of Service by Indian Harbor Insurance Company re 72 Response
in Opposition to Motion and Cross−Motion for a Protective Order (Schwartz,
Amy) (Entered: 03/21/2014)
03/24/2014 81 STIPULATION re 39 Scheduling Order, to modify discovery schedule by
Indian Harbor Insurance Company. Jointly Signed by U.S. Bancorp, U.S.
Bank National Association, and ACE American Insurance Company.
(Schwartz, Amy) (Entered: 03/24/2014)
03/24/2014 82 CERTIFICATE OF SERVICE ON PROPOSED ORDER by Indian Harbor
Insurance Company re 81 Stipulation to Modify Pretrial Scheduling Order
(Schwartz, Amy) (Entered: 03/24/2014)
03/24/2014 83 RESPONSE in Support re 62 MOTION to Compel Fact Discovery from
Defendants and in Response to Defendants' Cross−Motion for a Protective
Order filed by U.S. Bancorp, U.S. Bank National Association.
DOCUMENT/ATTACHMENT FILED IN ERROR−REFILED AS 86 .
(Attachments: # 1 LR7.1/LR72.2 Word Count Compliance Certificate).
(Gilinsky, Marshall) Modified text, link on 3/25/2014 (lmb). (Entered:
03/24/2014)
03/24/2014 84 AFFIDAVIT of Marshall Gilinsky in SUPPORT OF 62 MOTION to Compel
Fact Discovery from Defendants filed by U.S. Bancorp, U.S. Bank National
Association. (Attachments: # 1 Exhibit(s) A, # 2 Exhibit(s) B, # 3 Exhibit(s)
MAY 19 2015 p 11
C, # 4 Exhibit(s) D, # 5 Exhibit(s) E, # 6 Exhibit(s) F). (Gilinsky, Marshall)
Modified text on 3/25/2014 (lmb). (Entered: 03/24/2014)
03/24/2014 85 RESPONSE in Support re 57 MOTION for Protective Order Limiting
Deposition Subpoenas filed by U.S. Bancorp, U.S. Bank National Association.
(Attachments: # 1 LR7.1/LR72.2 Word Count Compliance
Certificate)(Gilinsky, Marshall) (Entered: 03/24/2014)
03/25/2014 86 LR7.1/LR72.2 WORD COUNT COMPLIANCE CERTIFICATE by U.S.
Bancorp, U.S. Bank National Association re 83 Response in Support of
Motion, filed by U.S. Bancorp, U.S. Bank National Association. (Gilinsky,
Marshall) (Entered: 03/25/2014)
03/26/2014 87 Minute Entry for proceedings held before Magistrate Judge Janie S. Mayeron:
Motion Hearing held on 3/26/2014 re 57 MOTION for Protective Order
Limiting Deposition Subpoenas filed by U.S. Bancorp, U.S. Bank National
Association, 62 MOTION to Compel filed by U.S. Bancorp, U.S. Bank
National Association, Defendants' Cross Motion for A Protective Order.
Motions taken under advisement. (kt) (Entered: 03/26/2014)
03/27/2014 88 AMENDED PRETRIAL SCHEDULING ORDER: Discovery due by
4/30/2014. Motions (non−disp) due 5/14/2014. Motions (disp) due by
12/1/2014. Ready for trial due by 2/1/2015. Signed by Magistrate Judge Janie
S. Mayeron on 3/27/2014. (las) (Entered: 03/28/2014)
04/01/2014 89 NOTICE of Filing of Official Transcript. This filing has 1 transcript(s)
associated with it. (CRB) (Entered: 04/01/2014)
04/01/2014 90 TRANSCRIPT of Motions Hearing held on March 26, 2014 before Magistrate
Judge Janie S. Mayeron. (129 pages). Court Reporter: Carla Bebault (E−mail:
Carla_Bebault@mnd.uscourts.gov. Telephone: (651) 848−1220). Redaction
Request due 4/22/2014. Redacted Transcript Deadline set for 5/2/2014.
Release of Transcript Restriction set for 6/30/2014. For information on
redaction procedures, please review Local Rule 5.5. (CRB) (Entered:
04/01/2014)
04/24/2014 91 MEMORANDUM in Support re 48 MOTION for Judgment on the Pleadings
filed by ACE American Insurance Company. (Attachments: # 1
LR7.1/LR72.2 Word Count Compliance Certificate, # 2 Exhibit(s) A, # 3
Exhibit(s) B, # 4 Exhibit(s) C, # 5 Exhibit(s) D, # 6 Exhibit(s) E, # 7
Exhibit(s) F)(Saltzman−Jones, Tiffany) (Entered: 04/24/2014)
04/24/2014 92 MEMORANDUM in Support re 46 MOTION for Judgment on the Pleadings
filed by Indian Harbor Insurance Company. (Attachments: # 1 LR7.1/LR72.2
Word Count Compliance Certificate)(Sandnes, James) (Entered: 04/24/2014)
04/24/2014 93 Declaration of James Sandnes in Support of 46 MOTION for Judgment on the
Pleadings filed by Indian Harbor Insurance Company. (Attachments: # 1
Exhibit A, # 2 Exhibit B, # 3 Exhibit C, # 4 Exhibit D, # 5 Exhibit E, # 6
Exhibit F, # 7 Exhibit G, # 8 Exhibit H, # 9 Exhibit I, # 10 Exhibit J, # 11
Exhibit K, # 12 Exhibit L, # 13 Exhibit M, # 14 Exhibit N)(Sandnes, James)
(Entered: 04/24/2014)
05/07/2014 94 NOTICE OF RESCHEDULED MOTION Hearing: Defendant Indian Harbor
Insurance Company 46 MOTION for Judgment on the Pleadings and
MAY 19 2015 p 12
Defendant ACE American Insurance Company 48 MOTION for Judgment on
the Pleadings hearing set for 6/5/2014 11:00 AM have been rescheduled. The
Motion Hearing is set for 6/12/2014 02:00 PM in Courtroom 7D (STP) before
Senior Judge Paul A. Magnuson. (SMR) (Entered: 05/07/2014)
05/15/2014 95 AMENDED NOTICE of Hearing on Motion: 46 MOTION for Judgment on
the Pleadings : Motion Hearing set for 6/18/2014 10:00 AM in Courtroom 7D
(STP) before Senior Judge Paul A. Magnuson. (Schwartz, Amy) (Entered:
05/15/2014)
05/21/2014 96 MEMORANDUM in Opposition re 48 MOTION for Judgment on the
Pleadings , 46 MOTION for Judgment on the Pleadings filed by All Plaintiffs.
(Attachments: # 1 LR7.1/LR72.2 Word Count Compliance
Certificate)(Gilinsky, Marshall) (Entered: 05/21/2014)
05/21/2014 97 AFFIDAVIT of Marshall Gilinsky in OPPOSITION TO 48 MOTION for
Judgment on the Pleadings , 46 MOTION for Judgment on the Pleadings filed
by U.S. Bancorp, U.S. Bank National Association. (Attachments: # 1
Exhibit(s), # 2 Exhibit(s), # 3 Exhibit(s), # 4 Exhibit(s), # 5 Exhibit(s), # 6
Exhibit(s), # 7 Exhibit(s), # 8 Exhibit(s), # 9 Exhibit(s), # 10 Exhibit(s), # 11
Exhibit(s), # 12 Exhibit(s), # 13 Exhibit(s), # 14 Exhibit(s), # 15 Exhibit(s), #
16 Exhibit(s), # 17 Exhibit(s), # 18 Exhibit(s), # 19 Exhibit(s), # 20 Exhibit(s),
# 21 Exhibit(s), # 22 Exhibit(s), # 23 Exhibit(s), # 24 Exhibit(s), # 25
Exhibit(s), # 26 Exhibit(s), # 27 Exhibit(s), # 28 Exhibit(s), # 29 Exhibit(s), #
30 Exhibit(s), # 31 Exhibit(s), # 32 Exhibit(s), # 33 Exhibit(s), # 34 Exhibit(s),
# 35 Exhibit(s), # 36 Exhibit(s), # 37 Exhibit(s), # 38 Exhibit(s), # 39
Exhibit(s), # 40 Exhibit(s))(Gilinsky, Marshall) (Entered: 05/21/2014)
05/30/2014 98 MEMORANDUM in Support re 48 MOTION for Judgment on the Pleadings
filed by ACE American Insurance Company. (Attachments: # 1
LR7.1/LR72.2 Word Count Compliance Certificate)(Beck, Alec) (Entered:
05/30/2014)
05/30/2014 99 AFFIDAVIT of Tiffany Saltzman−Jones in SUPPORT OF 48 MOTION for
Judgment on the Pleadings filed by ACE American Insurance Company.
(Attachments: # 1 Exhibit(s) 1, # 2 Exhibit(s) 2)(Beck, Alec) (Entered:
05/30/2014)
05/30/2014 100 Reply to Response to Motion re 46 MOTION for Judgment on the Pleadings
filed by Indian Harbor Insurance Company. (Attachments: # 1 LR7.1/LR72.2
Word Count Compliance Certificate)(Sandnes, James) (Entered: 05/30/2014)
05/30/2014 101 Declaration of James Sandnes in Support of 100 Reply to Response to Motion
filed by Indian Harbor Insurance Company. (Attachments: # 1 Exhibit(s) A, #
2 Exhibit(s) B). (Sandnes, James) Modified text on 6/2/2014 (lmb). (Entered:
05/30/2014)
06/02/2014 102 MOTION for Admission Pro Hac Vice for Attorney Vivian Costandy
Michael. Filing fee $ 100, receipt number 0864−4000188 by U.S. Bancorp,
U.S. Bank National Association. (Boley, Patrick) (Entered: 06/02/2014)
06/03/2014 103 TEXT ONLY ENTRY: ORDER granting 102 Motion for Admission Pro Hac
Vice of Attorney Vivian Costandy Michael for U.S. Bancorp,U.S. Bank
National Association. Approved by Magistrate Judge Janie S. Mayeron on
6/3/2014. (MAP) (Entered: 06/03/2014)
MAY 19 2015 p 13
06/03/2014 104 NOTICE OF WITHDRAWAL AND SUBSTITUTION OF COUNSEL for
U.S. Bancorp, U.S. Bank National Association. (Michael, Vivian) Modified
text on 6/3/2014 (lmb). (Entered: 06/03/2014)
06/18/2014 ***TEXT ONLY***Minute Entry for proceedings held before Senior Judge
Paul A. Magnuson: Motion Hearing held on 6/18/2014 re 48 MOTION for
Judgment on the Pleadings filed by ACE American Insurance Company, 46
MOTION for Judgment on the Pleadings filed by Indian Harbor Insurance
Company, argued, taken under advisement. (Court Reporter Ron Moen)
(SMR) (Entered: 06/19/2014)
07/03/2014 105 22 Memorandum and Order: 1. Denying Indian Harbor's Motion for Judgment on
the Pleadings 46 ; and 2. Denying ACE American's Motion for Judgment on
the Pleadings 48 . (Written Opinion). Signed by The Hon. Paul A. Magnuson
on 07/03/2014. (LLM) (Entered: 07/03/2014)
07/15/2014 106 LETTER to Request Permission to File Motion to Reconsider by Indian
Harbor Insurance Co. (Sandnes, James) (Entered: 07/15/2014)
07/15/2014 107 LETTER to Request Permission to File Motion to Reconsider by ACE
American Insurance Company. (Saltzman−Jones, Tiffany) (Entered:
07/15/2014)
07/24/2014 108 ORDER: 1. Denying Indian Harbor's Request for Permission to File a Motion
to Reconsider 106 ; and 2. Denying ACE American's Request for Permission
to File a Motion to Reconsider. Signed by The Hon. Paul A. Magnuson on
07/24/2014. (LLM) (Entered: 07/24/2014)
07/25/2014 109 Defendant Indian Harbor Insurance Company's Motion for 28 U.S.C. 1292(B)
Certification of the 105 Courts Order on Motion for Judgment on the
Pleadings. Filed by Indian Harbor Insurance Company. (Schwartz, Amy)
Modified docket text on 8/5/2014 (TSS). (Entered: 07/25/2014)
07/25/2014 110 NOTICE OF HEARING ON MOTION 109 MOTION to
Alter/Amend/Correct Other Orders 105 Order on Motion for Judgment on the
Pleadings: Motion Hearing set for 10/2/2014 11:00 AM in Courtroom 7D
(STP) before Senior Judge Paul A. Magnuson. (Schwartz, Amy) (Entered:
07/25/2014)
07/28/2014 111 ORDER that on or before August 4, 2014 the parties shall serve and file a
letter brief not to exceed five pages, addressing whether the District Court's
July 3, 2014 Order moots or narrows the scope of the motions this Court has
under advisement Docket Nos. 57 and 62 and if it does not, why it does not.
Signed by Magistrate Judge Janie S. Mayeron on 7/28/2014. (KMM)
(Entered: 07/28/2014)
07/28/2014 112 Defendant ACE American Insurance Company's Motion for 28 U.S.C.
1292(B) Certification of the Courts Order or for Certification of a Question of
Law to the Delaware Supreme Court. Filed by ACE American Insurance
Company. (Beck, Alec) Modified docket text on 8/5/2014 (TSS). (Entered:
07/28/2014)
08/04/2014 113 LETTER TO MAGISTRATE JUDGE by Indian Harbor Insurance Company
(submitted on behalf of all parties jointly). (Schwartz, Amy) (Entered:
08/04/2014)
MAY 19 2015 p 14
08/04/2014 114 NOTICE OF CIVIL MOTION BRIEFING SCHEDULE. The defendants
Motions for 28 U.S.C.1292(B) Certification of the Court's Order of July 3,
2014 (Doc.#109 and Doc.#112) will be taken on the papers. (see notice for
deadlines) (SMR) (Entered: 08/04/2014)
08/05/2014 115 ORDER re 113 Joint Letter Request. Signed by Magistrate Judge Janie S.
Mayeron on 8/5/2014. (las) (Entered: 08/05/2014)
08/07/2014 116 LETTER TO MAGISTRATE JUDGE by U.S. Bancorp, U.S. Bank National
Association . (Boley, Patrick) (Entered: 08/07/2014)
08/18/2014 117 MEMORANDUM in Support re 112 MOTION FOR 28 U.S.C. § 1292(b)
CERTIFICATION OF THE COURTS JULY 3, 2014 ORDER OR FOR
CERTIFICATION OF A QUESTION OF LAW TO THE DELAWARE
SUPREME COURT filed by ACE American Insurance Company.
(Attachments: # 1 LR7.1/LR72.2 Word Count Compliance
Certificate)(Saltzman−Jones, Tiffany) (Entered: 08/18/2014)
08/18/2014 118 AMENDED NOTICE OF HEARING ON 109 MOTION FOR 28 U.S.C.
§1292(B) CERTIFICATION OF THE COURT'S ORDER ON
DEFENDANTS MOTION FOR JUDGMENT ON THE PLEADINGS:
Defendant will submit on the papers its Motion for 28 U.S.C. §1292(b)
Certification of the Courts Order on Motion for Judgment on the Pleadings.
(Sandnes, James) Modified text on 8/19/2014 (MMP). (Entered: 08/18/2014)
08/18/2014 119 MEMORANDUM in Support re 109 Defendant Indian Harbor Insurance
Companys Motion for 28 U.S.C. 1292(B) Certification of the Courts Order on
Motion for Judgment on the Pleadings. filed by Indian Harbor Insurance
Company. (Attachments: # 1 LR7.1/LR72.2 Word Count Compliance
Certificate)(Sandnes, James) (Entered: 08/18/2014)
08/18/2014 120 Declaration of James Sandnes in Support of 109 Defendant Indian Harbor
Insurance Companys Motion for 28 U.S.C. 1292(B) Certification of the
Courts Order on Motion for Judgment on the Pleadings. filed by Indian
Harbor Insurance Company. (Attachments: # 1 Exhibit(s) A, # 2 Exhibit(s) B,
# 3 Exhibit(s) C, # 4 Exhibit(s) D, # 5 Exhibit(s) E, # 6 Exhibit(s) F, # 7
Exhibit(s) G, # 8 Exhibit(s) H, # 9 Exhibit(s) I)(Sandnes, James) (Entered:
08/18/2014)
08/19/2014 121 CERTIFICATE OF SERVICE ON PROPOSED ORDER by Indian Harbor
Insurance Company re 109 Defendant Indian Harbor Insurance Companys
Motion for 28 U.S.C. 1292(B) Certification of the Courts Order on Motion for
Judgment on the Pleadings. (Schwartz, Amy) (Entered: 08/19/2014)
08/19/2014 122 CERTIFICATE OF SERVICE ON PROPOSED ORDER by ACE American
Insurance Company re 112 MOTION FOR 28 U.S.C. § 1292(b)
CERTIFICATION OF THE COURTS JULY 3, 2014 ORDER OR FOR
CERTIFICATION OF A QUESTION OF LAW TO THE DELAWARE
SUPREME COURT (Beck, Alec) (Entered: 08/19/2014)
09/08/2014 123 MEMORANDUM in Opposition re 109 Defendant Indian Harbor Insurance
Companys Motion for 28 U.S.C. 1292(B) Certification of the Courts Order on
Motion for Judgment on the Pleadings, 112 MOTION FOR 28 U.S.C. §
1292(b) CERTIFICATION OF THE COURTS JULY 3, 2014 ORDER OR
FOR CERTIFICATION OF A QUESTION OF LAW TO THE DELAWARE
MAY 19 2015 p 15
SUPREME COURT filed by U.S. Bancorp, U.S. Bank National Association.
(Attachments: # 1 LR7.1/LR72.2 Word Count Compliance Certificate).
(Gilinsky, Marshall) Modified text on 9/9/2014 (lmb). (Entered: 09/08/2014)
09/08/2014 124 AFFIDAVIT of Marshall Gilinsky, Esq. in OPPOSITION TO 109 Defendant
Indian Harbor Insurance Companys Motion for 28 U.S.C. 1292(B)
Certification of the Courts Order on Motion for Judgment on the Pleadings.,
112 MOTION FOR 28 U.S.C. § 1292(b) CERTIFICATION OF THE
COURTS JULY 3, 2014 ORDER OR FOR CERTIFICATION OF A
QUESTION OF LAW TO THE DELAWARE SUPREME COURT filed by
U.S. Bancorp, U.S. Bank National Association. (Attachments: # 1 Exhibit(s)
1, # 2 Exhibit(s) 2, # 3 Exhibit(s) 3, # 4 Exhibit(s) 4, # 5 Exhibit(s) 5, # 6
Exhibit(s) 6, # 7 Exhibit(s) 7, # 8 Exhibit(s) 8)(Gilinsky, Marshall) (Entered:
09/08/2014)
09/11/2014 125 MOTION for Summary Judgment by U.S. Bancorp, U.S. Bank National
Association. (Gilinsky, Marshall) (Entered: 09/11/2014)
09/11/2014 126 MEMORANDUM in Support re 125 MOTION for Summary Judgment filed
by U.S. Bancorp, U.S. Bank National Association. (Attachments: # 1
LR7.1/LR72.2 Word Count Compliance Certificate)(Gilinsky, Marshall)
(Entered: 09/11/2014)
09/11/2014 127 AFFIDAVIT of Mack Savage in SUPPORT OF 125 MOTION for Summary
Judgment filed by U.S. Bancorp, U.S. Bank National Association. (Gilinsky,
Marshall) (Entered: 09/11/2014)
09/11/2014 128 AFFIDAVIT of Marshall Gilinsky in SUPPORT OF 125 MOTION for
Summary Judgment filed by U.S. Bancorp, U.S. Bank National Association.
(Attachments: # 1 Exhibit(s) 1, # 2 Exhibit(s) 2, # 3 Exhibit(s) 3, # 4
Exhibit(s) 4, # 5 Exhibit(s) 5, # 6 Exhibit(s) 6, # 7 Exhibit(s) 7, # 8 Exhibit(s)
8, # 9 Exhibit(s) 9, # 10 Exhibit(s) 10, # 11 Exhibit(s) 11, # 12 Exhibit(s) 12, #
13 Exhibit(s) 13, # 14 Exhibit(s) 14, # 15 Exhibit(s) 15, # 16 Exhibit(s) 16, #
17 Exhibit(s) 17, # 18 Exhibit(s) 18, # 19 Exhibit(s) 19, # 20 Exhibit(s) 20, #
21 Exhibit(s) 21, # 22 Exhibit(s) 22, # 23 Exhibit(s) 23, # 24 Exhibit(s)24, #
25 Exhibit(s) 25, # 26 Exhibit(s) 26, # 27 Exhibit(s) 27, # 28 Exhibit(s) 28, #
29 Exhibit(s) 29, # 30 Exhibit(s) 30, # 31 Exhibit(s) 31, # 32 Exhibit(s) 32, #
33 Exhibit(s) 33, # 34 Exhibit(s) 34, # 35 Exhibit(s) 45, # 36 Exhibit(s) 36, #
37 Exhibit(s) 37, # 38 Exhibit(s) 38). (Gilinsky, Marshall) Modified text on
9/15/2014 (lmb). (Entered: 09/11/2014)
09/12/2014 129 NOTICE OF HEARING ON MOTION 125 MOTION for Summary
Judgment : Motion Hearing set for 10/23/2014 11:00 AM in Courtroom 7D
(STP) before Senior Judge Paul A. Magnuson. (Boley, Patrick) (Entered:
09/12/2014)
09/15/2014 130 REPLY re 112 MOTION FOR 28 U.S.C. § 1292(b) CERTIFICATION OF
THE COURTS JULY 3, 2014 ORDER OR FOR CERTIFICATION OF A
QUESTION OF LAW TO THE DELAWARE SUPREME COURT filed by
ACE American Insurance Company. (Attachments: # 1 LR7.1/LR72.2 Word
Count Compliance Certificate)(Saltzman−Jones, Tiffany) (Entered:
09/15/2014)
09/15/2014 131 REPLY re 109 Defendant Indian Harbor Insurance Companys Motion for 28
U.S.C. 1292(B) Certification of the Courts Order on Motion for Judgment on
MAY 19 2015 p 16
the Pleadings. filed by Indian Harbor Insurance Company. (Attachments: # 1
LR7.1/LR72.2 Word Count Compliance Certificate)(Sandnes, James)
(Entered: 09/15/2014)
09/15/2014 132 Second Declaration of James Sandnes in Support of 109 Defendant Indian
Harbor Insurance Companys Motion for 28 U.S.C. 1292(B) Certification of
the Courts Order on Motion for Judgment on the Pleadings. filed by Indian
Harbor Insurance Company. (Attachments: # 1 Exhibit(s) A)(Sandnes, James)
(Entered: 09/15/2014)
10/02/2014 133 MEMORANDUM in Opposition re 125 MOTION for Summary Judgment
filed by ACE American Insurance Company. (Attachments: # 1
LR7.1/LR72.2 Word Count Compliance Certificate)(Saltzman−Jones,
Tiffany) (Entered: 10/02/2014)
10/02/2014 134 AFFIDAVIT of Tiffany Saltzman−Jones in OPPOSITION TO 125 MOTION
for Summary Judgment filed by ACE American Insurance Company.
(Attachments: # 1 Exhibit(s) A, # 2 Exhibit(s) B, # 3 Exhibit(s) C, # 4
Exhibit(s) D, # 5 Exhibit(s) E, # 6 Exhibit(s) F, # 7 Exhibit(s)
G)(Saltzman−Jones, Tiffany) (Entered: 10/02/2014)
10/02/2014 135 MEMORANDUM in Opposition re 125 MOTION for Summary Judgment
filed by Indian Harbor Insurance Company. (Attachments: # 1 LR7.1/LR72.2
Word Count Compliance Certificate)(Sandnes, James) (Entered: 10/02/2014)
10/02/2014 136 Declaration of James Sandnes in Support of 135 Memorandum in Opposition
to Motion filed by Indian Harbor Insurance Company. (Attachments: # 1
Exhibit(s) A − Part 1 of 6, # 2 Exhibit(s) A − Part 2 of 6, # 3 Exhibit(s) A −
Part 3 of 6, # 4 Exhibit(s) A − Part 4 of 6, # 5 Exhibit(s) A − Part 5 of 6, # 6
Exhibit(s) A − Part 6 of 6, # 7 Exhibit(s) B, # 8 Exhibit(s) C)(Sandnes, James)
(Entered: 10/02/2014)
10/02/2014 137 AFFIDAVIT of William Stanford in OPPOSITION TO 125 MOTION for
Summary Judgment filed by Indian Harbor Insurance Company.
(Attachments: # 1 Exhibit(s) 1, # 2 Exhibit(s) 2, # 3 Exhibit(s) 3)(Sandnes,
James) (Entered: 10/02/2014)
10/02/2014 138 AFFIDAVIT of Mark Vandevanter in OPPOSITION TO 125 MOTION for
Summary Judgment filed by Indian Harbor Insurance Company. (Sandnes,
James) (Entered: 10/02/2014)
10/15/2014 139 MEMORANDUM AND ORDER: 1. Denying Indian Harbor's Motion for
Certification under 28 U.S.C. Section 1292(b) 109 ; and 2. Denying ACE
American's Motion for Certification under 28 U.S.C. Section 1292(b) or for
Certification to the Delaware Supreme Court 112 . (Written Opinion). Signed
by The Hon. Paul A. Magnuson on 10/15/2014. (LLM) (Entered: 10/15/2014)
10/16/2014 140 DOCUMENT FILED IN ERROR−WILL REFILE − REPLY re 125
MOTION for Summary Judgment filed by U.S. Bancorp, U.S. Bank National
Association. (Attachments: # 1 LR7.1/LR72.2 Word Count Compliance
Certificate)(Gilinsky, Marshall) Modified text on 10/16/2014 (MMP).
(Entered: 10/16/2014)
10/16/2014 141 REPLY re 125 MOTION for Summary Judgment filed by U.S. Bancorp, U.S.
Bank National Association. (Attachments: # 1 LR7.1/LR72.2 Word Count
MAY 19 2015 p 17
Compliance Certificate)(Gilinsky, Marshall) (Entered: 10/16/2014)
10/16/2014 142 AFFIDAVIT of Vivian C. Michael in SUPPORT OF 125 MOTION for
Summary Judgment filed by U.S. Bancorp, U.S. Bank National Association.
(Attachments: # 1 Exhibit(s) A, # 2 Exhibit(s) B, # 3 Exhibit(s) C, # 4
Exhibit(s) D, # 5 Exhibit(s) E, # 6 Exhibit(s) F, # 7 Exhibit(s) G, # 8
Exhibit(s) H, # 9 Exhibit(s) I, # 10 Exhibit(s) J). (Gilinsky, Marshall)
Modified text on 10/17/2014 (lmb). (Entered: 10/16/2014)
10/23/2014 143 TEXT ONLY ENTRY: Minute Entry for proceedings held before Judge Paul
A. Magnuson: Motion Hearing held on 10/23/2014 re 125 MOTION for
Summary Judgment filed by U.S. Bancorp, U.S. Bank National Association.
Motion taken under advisement. (Court Reporter Ron Moen) (JEP) Modified
text on 10/23/2014 (lmb). (Entered: 10/23/2014)
11/07/2014 144 LETTER TO DISTRICT JUDGE by Indian Harbor Insurance Company
Submitting Supplemental Authority. (Schwartz, Amy) (Entered: 11/07/2014)
11/10/2014 145 LETTER TO DISTRICT JUDGE by U.S. Bancorp, U.S. Bank National
Association in Response to #144 LETTER TO DISTRICT JUDGE by Indian
Harbor Insurance Company Submitting Supplemental Authority. (Gilinsky,
Marshall) (Entered: 11/10/2014)
11/25/2014 146 NOTICE by Indian Harbor Insurance Company Notice of Change of Name of
Law Firm (Sandnes, James) (Entered: 11/25/2014)
12/16/2014 147 DOCUMENT FILED IN ERROR. RE−FILED AT 148 . ORDER granting
125 Motion for Summary Judgment (Written Opinion). Let Judgment Be
Entered Accordingly. Signed by Judge Paul A. Magnuson on December 16,
2014. (ALT) Modified text on 12/16/2014 (lmb). (Entered: 12/16/2014)
12/16/2014 148 33 ORDER GRANTING 125 MOTION for Summary Judgment filed by U.S.
Bancorp, U.S. Bank National Association (Written Opinion). Let Judgment Be
Entered Accordingly. Signed by Judge Paul A. Magnuson on December 16,
2014. (ALT) (Entered: 12/16/2014)
12/16/2014 149 52 JUDGMENT (Attachments: # 1 Civil Notice − appeal)(lmb) (Entered:
12/16/2014)
01/13/2015 150 MOTION to Alter/Amend/Correct Judgment by U.S. Bancorp, U.S. Bank
National Association. (Gilinsky, Marshall) (Entered: 01/13/2015)
01/13/2015 151 MEET and CONFER STATEMENT re 150 Motion to Alter/Amend/Correct
Judgment filed by U.S. Bancorp, U.S. Bank National Association. (Gilinsky,
Marshall) (Entered: 01/13/2015)
01/13/2015 152 AFFIDAVIT of Sarah Stroebel in SUPPORT OF 150 MOTION to
Alter/Amend/Correct Judgment filed by U.S. Bancorp, U.S. Bank National
Association. (Attachments: # 1 Exhibit(s) A). (Gilinsky, Marshall) Modified
text on 1/13/2015 (lmb). (Entered: 01/13/2015)
01/13/2015 153 MEMORANDUM in Support re 150 MOTION to Alter/Amend/Correct
Judgment filed by U.S. Bancorp, U.S. Bank National Association.
(Attachments: # 1 LR7.1/LR72.2 Word Count Compliance
Certificate)(Gilinsky, Marshall) (Entered: 01/13/2015)
MAY 19 2015 p 18
01/14/2015 154 NOTICE OF CIVIL MOTION BRIEFING SCHEDULE. The Plaintiff's
Motion to Amend the Judgment (Doc. No. 150) will be taken on the papers.
Opposition papers due 1/20/2015 (see Notice). (JEP) (Entered: 01/14/2015)
01/20/2015 155 MEMORANDUM in Opposition re 150 MOTION to Alter/Amend/Correct
Judgment filed by ACE American Insurance Company. (Attachments: # 1
LR7.1/LR72.2 Word Count Compliance Certificate)(Saltzman−Jones,
Tiffany) (Entered: 01/20/2015)
01/20/2015 156 AFFIDAVIT of Tiffany Saltzman−Jones in OPPOSITION TO 150 MOTION
to Alter/Amend/Correct Judgment filed by ACE American Insurance
Company. (Attachments: # 1 Exhibit(s) A, # 2 Exhibit(s) B, # 3 Exhibit(s)
C)(Saltzman−Jones, Tiffany) (Entered: 01/20/2015)
01/20/2015 157 AFFIDAVIT of John F. Varley, III in OPPOSITION TO 150 MOTION to
Alter/Amend/Correct Judgment filed by ACE American Insurance Company.
(Saltzman−Jones, Tiffany) (Entered: 01/20/2015)
01/20/2015 158 MEMORANDUM in Opposition re 150 MOTION to Alter/Amend/Correct
Judgment (Partial Opposition) filed by Indian Harbor Insurance Company.
(Attachments: # 1 LR7.1/LR72.2 Word Count Compliance
Certificate)(Schwartz, Amy) (Entered: 01/20/2015)
01/20/2015 159 Declaration of William Stanford in Support of 158 Memorandum in
Opposition to Motion filed by Indian Harbor Insurance Company.
(Attachments: # 1 Exhibit(s) 1−2, # 2 Exhibit(s) 3−7)(Schwartz, Amy)
(Entered: 01/20/2015)
01/27/2015 160 REPLY re 150 MOTION to Alter/Amend/Correct Judgment filed by U.S.
Bancorp, U.S. Bank National Association. (Attachments: # 1 LR7.1/LR72.2
Word Count Compliance Certificate)(Gilinsky, Marshall) (Entered:
01/27/2015)
01/27/2015 161 AFFIDAVIT of Marshall Gilinsky in SUPPORT OF 150 MOTION to
Alter/Amend/Correct Judgment filed by U.S. Bancorp, U.S. Bank National
Association. (Gilinsky, Marshall) (Entered: 01/27/2015)
03/19/2015 162 54 MEMORANDUM AND ORDER: Granting U.S. Bank's Motion to Amend the
Judgment 150 as specifically set forth in the Order. LET JUDGMENT BE
ENTERED ACCORDINGLY. Signed by The Hon. Paul A. Magnuson on
03/19/2015. (LLM) (Entered: 03/19/2015)
03/20/2015 163 69 JUDGMENT. (Attachments: # 1 Civil Notice − appeal). (lmb) (Entered:
03/20/2015)
04/02/2015 164 STIPULATION re 163 Judgment STAYING ENFORCEMENT OF THE
JUDGMENT PURSUANT TO FED. R. CIV. P. 62(d) by Indian Harbor
Insurance Company. Jointly Signed by U.S. Bank National Association, U.S.
Bancorp, and Indian Harbor Insurance Company. (Attachments: # 1 Exhibit(s)
A, # 2 Exhibit(s) B)(Schwartz, Amy) (Entered: 04/02/2015)
04/02/2015 165 CERTIFICATE OF SERVICE ON PROPOSED ORDER by Indian Harbor
Insurance Company re 164 Stipulation, (Schwartz, Amy) (Entered:
04/02/2015)
04/02/2015 166
MAY 19 2015 p 19
NOTICE OF APPEAL TO 8TH CIRCUIT as to 148 Order, 163 Judgment,
162 Order on Motion to Alter Judgment, 105 Order on Motion for Judgment
on the Pleadings,,, 149 Judgment by Indian Harbor Insurance Company.
Filing fee $ 505, receipt number 0864−4370270. (Attachments: # 1
Appellant's Form A)(Schwartz, Amy) (Entered: 04/02/2015)
04/02/2015 167 ORDER STAYING ENFORCEMENT OF THE JUDGMENT. Signed by
Judge Paul A. Magnuson on 4/2/2015. (JEP) (Entered: 04/02/2015)
04/03/2015 NOTICE to USCA of subsequent filing in a civil case, Re: Order 167 . (lmb)
(Entered: 04/03/2015)
04/03/2015 168 TRANSMITTAL OF APPEAL LETTER TO U.S. COURT OF APPEALS,
8TH CIRCUIT, Re: Notice of Appeal to 8th Circuit 166 . (lmb) (Entered:
04/03/2015)
04/03/2015 169 USCA Case Number 15−1691 for 166 Notice of Appeal to 8th Circuit, filed
by Indian Harbor Insurance Company. (LPH) (Entered: 04/07/2015)
04/17/2015 170 STIPULATION to Extend Time for Filing of Notice of Appeal by ACE
American Insurance Company. Jointly Signed by U.S. Bancorp and U.S Bank
National Association. (Saltzman−Jones, Tiffany) (Entered: 04/17/2015)
04/17/2015 171 ORDER for ACE American Insurance Company to extend the time for filing a
notice of Appeal to 5/19/2015. Signed by Judge Paul A. Magnuson on
4/17/2015. (JEP) (Entered: 04/17/2015)
04/17/2015 NOTICE to USCA of subsequent filing in a civil case, Re: Stipulation 170 ,
Order 171 . (lmb) (Entered: 04/17/2015)
04/21/2015 172 NOTICE of Filing of Official Transcript. This filing has 1 transcript(s)
associated with it. (TSS) (Entered: 04/21/2015)
04/21/2015 173 TRANSCRIPT of Motions Hearing held on 6/18/2014 before Senior Judge
Paul A. Magnuson. (39 pages). Court Reporter: Ron Moen (E−mail:
Ron_Moen@mnd.uscourts.gov / Telephone: 612−664−5026). Redaction
Request due 5/12/2015. Redacted Transcript Deadline set for 5/22/2015.
Release of Transcript Restriction set for 7/20/2015. For information on
redaction procedures, please review Local Rule 5.5. (TSS) (Entered:
04/21/2015)
04/21/2015 174 NOTICE of Filing of Official Transcript. This filing has 1 transcript(s)
associated with it. (TSS) (Entered: 04/21/2015)
04/21/2015 175 TRANSCRIPT of Motions Hearing held on 10/23/2014 before Senior Judge
Paul A. Magnuson. (44 pages). Court Reporter: Ron Moen (E−mail:
Ron_Moen@mnd.uscourts.gov / Telephone: 612−664−5026). Redaction
Request due 5/12/2015. Redacted Transcript Deadline set for 5/22/2015.
Release of Transcript Restriction set for 7/20/2015. For information on
redaction procedures, please review Local Rule 5.5. (TSS) (Entered:
04/21/2015)
04/21/2015 NOTICE to USCA of subsequent filing in a civil case, Re: Transcript 173 ,
Notice of Filing of Official Transcript 174 , Notice of Filing of Official
Transcript 172 , Transcript 175 . (lmb) (Entered: 04/21/2015)
MAY 19 2015 p 20
05/19/2015 176 71 NOTICE OF APPEAL TO 8TH CIRCUIT as to 148 Order, 163 Judgment,
162 Order on Motion to Alter Judgment, 105 Order on Motion for Judgment
on the Pleadings, 149 Judgment by ACE American Insurance Company.
Filing fee $ 505, receipt number 0864−4429661. (Attachments: # 1
Appellant's Form A)(Saltzman−Jones, Tiffany) (Entered: 05/19/2015)
05/19/2015 177 DOCUMENT FILED IN ERROR−REFILED AT 178 . TRANSMITTAL OF
APPEAL LETTER TO U.S. COURT OF APPEALS, 8TH CIRCUIT, Re:
Notice of Appeal to 8th Circuit 176 . (lmb) Modified text on 5/19/2015 (lmb).
(Entered: 05/19/2015)
05/19/2015 178 74 Amended TRANSMITTAL OF APPEAL LETTER TO U.S. COURT OF
APPEALS, 8TH CIRCUIT, Re: Notice of Appeal to 8th Circuit 176 . (lmb)
(Entered: 05/19/2015)
MAY 19 2015 p 21
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
U.S. Bank National Association and Case No.: 12-cv-3175 (PAM/J SM)
U.S. Bancorp,
Plaintiffs,
v. MEMORANDUM AND ORDER
Indian Harbor Insurance Company and
ACE American Insurance Company,
Defendants.
This matter is before the Court on Indian Harbor’s and ACE American’s Motions for
J udgment on the Pleadings. For the reasons that follow, the Court denies the Motions.
BACKGROUND
Beginning in 2009, three class actions were brought against U.S. Bank for
overcharging overdraft fees to its customers.
1
(Compl. (Docket No. 1) ¶¶ 43-44.)
Specifically, the class actions alleged that U.S. Bank re-ordered customers’ debit-card
transactions from highest amount to lowest amount (instead of chronologically), posted the
transactions to customers’ checking accounts in that order, and allowed the accounts to be
overdrawn—thereby creating the most overdrafts and maximizing the overdraft fees assessed
on its customers. (Id. ¶ 46.) The class actions also alleged that U.S. Bank misrepresented
1
The three class actions were Speers v. U.S. Bank, N.A., No. 3:09-cv-00409-HU (D.
Or. filed April 17, 2009); Waters v. U.S. Bank, N.A., No. 3:09-cv-02071-J SW (N.D. Cal.
filed May 12, 2009); and Brown v. U.S. Bank, N.A., No. 2:10-cv-00356-RMP (E.D. Wash.
filed Oct. 13, 2010).
Case 0:12-cv-03175-PAM-JSM Document 105 Filed 07/03/14 Page 1 of 11
MAY 19 2015 p 22
its overdraft policy of high-to-low posting to its customers. (Id.) The class actions asserted
a variety of common-law and statutory claims and sought the return of the excess overdraft
fees collected by U.S. Bank. (Id.) Eventually, the class actions were transferred to a multi-
district litigation in the Southern District of Florida.
2
(Id. ¶ 45.) And in 2013, U.S. Bank
settled the class actions for $55 million. (Id. ¶¶ 51-54.)
U.S. Bank then made an insurance claim to Indian Harbor and ACE American (the
“Insurers”) for coverage of the amount paid to defend against and settle the class actions.
(Id. ¶ 58.) U.S. Bank had purchased a professional-liability insurance policy from Indian
Harbor for primary coverage with a $20 million liability limit, subject to a $25 million
deductible. (Id. ¶¶ 17-18, Exs. A-B.) U.S. Bank also had purchased a similar policy from
ACE American for excess coverage with a $15 million liability limit. (Id. ¶¶ 39-40, Exs. C-
D.) Within those policy terms, U.S. Bank demanded coverage for more than the $25 million
deductible but less than the total $35 million liability limit, or $30 million plus defense costs.
(Id. ¶¶ 62, 66.)
The Insurers denied U.S. Bank’s claim, primarily on the ground that the settlement
was not a covered loss under the insurance policies. (Id. ¶¶ 59, 63.) The policies granted
coverage only for a “Loss”, and they defined “Loss” as “the total amount which [U.S. Bank]
becomes legally obligated to pay on account of each Claim . . . made against [U.S. Bank] for
Wrongful Acts . . . including, but not limited to, damages, judgments, settlements, costs,
2
See In re Checking Account Overdraft Litig., No. 1:09-md-02036-J LK (S.D. Fla.).
2
Case 0:12-cv-03175-PAM-JSM Document 105 Filed 07/03/14 Page 2 of 11
MAY 19 2015 p 23
pre-judgment and post-judgment interest and Defense Costs.” (Id. ¶¶ 19-21.) The policies
limited the “Loss” definition to omit, as relevant here, either “[m]atters which are uninsurable
under the law pursuant to which this Policy is construed” (the “Uninsurable Provision”) or
“principal, interest, or other monies either paid, accrued, or due as the result of any loan,
lease or extension of credit by [U.S. Bank]” (the “Extension-of-Credit Provision”).
(Id. ¶ 22.) And the policies excluded from coverage claims “brought about or contributed
in fact by any . . . profit or remuneration gained by [U.S. Bank] or to which [U.S. Bank] is
not legally entitled . . . as determined by a final adjudication in the underlying action” (the
“Ill-Gotten Gains Provision”). (Id. ¶ 27.) The Insurers maintained that the Uninsurable
Provision encompassed the settlement as legally uninsurable restitution. (Id. ¶¶ 59, 63.)
U.S. Bank disagreed and, in December 2012, sued the Insurers for breach of contract
and a declaratory judgment. (Id. ¶¶ 67-83.) U.S. Bank claimed that the settlement falls
within the policies’ definition of “Loss” and is thus covered, that the Insurers must pay the
covered amount, that their refusal to do so is a breach of the policies, and that they are
responsible for the resulting damages. (Id.) The Insurers now move for judgment on the
pleadings.
DISCUSSION
J udgment on the pleadings should be granted if the moving party clearly establishes
that there are no material issues of fact and that it is entitled to judgment as a matter of law.
Poehl v. Countrywide Home Loans, Inc., 528 F.3d 1093, 1096 (8th Cir. 2008). When
evaluating a motion for judgment on the pleadings, the Court must accept as true all facts
3
Case 0:12-cv-03175-PAM-JSM Document 105 Filed 07/03/14 Page 3 of 11
MAY 19 2015 p 24
pleaded by the non-moving party and grant all reasonable inferences from the pleadings in
that party’s favor. Faibisch v. Univ. of Minn., 304 F.3d 797, 803 (8th Cir. 2002). While the
Court generally must ignore materials outside the pleadings, it may consider “some public
records, materials that do not contradict the complaint, or materials that are necessarily
embraced by the pleadings.” Saterdalen v. Spencer, 725 F.3d 838, 840-41 (8th Cir. 2013).
The material facts, as pertinent to these motions, are undisputed. The issue that
remains is whether, as a matter of law, the settlement is a covered loss under the insurance
policies. Whether the policies cover the settlement turns on the terms of the policies
themselves.
When interpreting an insurance policy, the Court—a federal court sitting in
diversity—applies state substantive law. E-Shops Corp. v. U.S. Bank Nat’l Ass’n, 678 F.3d
659, 663 (8th Cir. 2012). The policies are governed by Delaware law. (Compl. ¶ 23.) Under
Delaware law, interpretation of an insurance policy is a question of law. Rhone-Poulenc
Basic Chemicals Co. v. Am. Motorist Ins. Co., 616 A.2d 1192, 1195 (Del. 1992). Delaware
courts interpret an insurance policy, like all contracts, “in a common sense manner, giving
effect to all provisions so that a reasonable policyholder can understand the scope and
limitation of coverage.” Penn Mut. Life Ins. Co. v. Oglesby, 695 A.2d 1146, 1149 (Del.
1997). If the policy language is clear and unambiguous, its plain meaning must be enforced.
ConAgra Foods, Inc. v. Lexington Ins. Co., 21 A.3d 62, 69 (Del. 2011). But if the policy
language is ambiguous—in that it is susceptible to two or more reasonable
interpretations—the principle of contra proferentem dictates that the policy is to be construed
4
Case 0:12-cv-03175-PAM-JSM Document 105 Filed 07/03/14 Page 4 of 11
MAY 19 2015 p 25
against the insurer who drafted it. Id.
In asserting that the policies do not cover the settlement, the Insurers rely on two
provisions: the Uninsurable Provision and the Extension-of-Credit Provision.
I. Uninsurable Provision
The Insurers principally argue that the policies do not cover the settlement under the
Uninsurable Provision. According to the Insurers, the settlement is restitutionary, and
restitution is uninsurable as a matter of law. The Insurers highlight several court decisions
that have rejected insurance coverage for restitution on the basis that returning money or
property to which one is not legally entitled can never constitute a loss. Two aspects of the
policies’ clear language, however, contradict the Insurers’ argument.
First, the settlement is not uninsurable under Delaware law because no Delaware
authority has held that restitution is uninsurable as a matter of law. The Uninsurable
Provision only carves out from the definition of “Loss” those “[m]atters which are
uninsurable under the law pursuant to which this Policy is construed,” or Delaware law. The
Insurers have failed to cite, and the Court cannot locate, any Delaware authority deeming
restitution uninsurable. Delaware courts have scrutinized public-policy bars against
insurance coverage in similar contexts, only to conclude that public policy did not prohibit
coverage. See, e.g., Whalen v. On-Deck, Inc., 514 A.2d 1072, 1073-74 (Del. 1986)
(concluding that public policy did not bar insurance coverage for punitive damages); Wilson
v. Chem-Solv, Inc., No. 85C-MY-1, 1988 WL 109375, at *1 (Del. Super. Ct. Oct. 14, 1988)
(concluding that public policy did not bar insurance coverage for civil penalties assessed for
5
Case 0:12-cv-03175-PAM-JSM Document 105 Filed 07/03/14 Page 5 of 11
MAY 19 2015 p 26
pollution). Yet neither Delaware statute nor case law expressly precludes insurance coverage
for settlements constituting restitution.
Both parties speculate as to how a Delaware court, if confronted with the issue
directly, would rule on the insurability of restitution. U.S. Bank suggests that Delaware
courts do not readily void insurance coverage based on public-policy considerations due to
their “pro-contractarian,” “pro-banking,” and “pro-policyholder” tilt. And the Insurers insist
that Delaware courts would simply follow the law of other States that forbid coverage. The
Court finds none of these reasons compelling enough to support holding, as a matter of first
impression, that Delaware law prevents parties from contracting to insure settlements
constituting restitution.
Second, the policies exclude from coverage restitution resulting from a final
adjudication and by implication include within coverage restitution stemming from a
settlement. The Ill-Gotten Gains Provision excludes from coverage money to which U.S.
Bank “is not legally entitled” only “as determined by a final adjudication in the underlying
action.” This provision shows not merely that the parties contemplated the possibility of
coverage for restitution, but that they agreed coverage would exist unless the restitution was
imposed by a final adjudication. When an underlying action alleging ill-gotten gains settles
before trial, there is no final adjudication in that action. See Clarendon Am. Ins. Co., No.
04C-11-167, 2008 WL 2583007, at *7 (Del. Super. Ct. J une 25, 2008). So here, where the
class actions alleging ill-gotten gains were settled before trial, there is no final adjudication
and the settlement is not excluded from coverage.
6
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MAY 19 2015 p 27
The Insurers vehemently dispute this interpretation of the Ill-Gotten Gains Provision.
The Insurers agree that the provision would not exclude coverage because there has been no
final adjudication. But the Insurers contend that all that means is that the exclusion is
irrelevant, not that it implicitly establishes coverage. Put differently, the Insurers assert that
U.S. Bank is equating a coverage exclusion with a coverage grant, and that the former cannot
create the latter.
To be sure, coverage logically must be granted according to the definition of “Loss”
before an exclusion can negate that coverage. Yet the definition of “Loss” must be
interpreted consistently with all provisions of the policy—even the exclusions. See O’Brien
v. Progressive N. Ins. Co., 785 A.2d 281, 287 (Del. 2001) (stating that the provisions of
insurance policies must be read “as a whole” and may not be rendered “meaningless”);
Westfield Ins. Co. v. Robinson Outdoors, Inc., 700 F.3d 1172, 1175 (8th Cir. 2012)
(explaining that exclusions equally affect the scope of coverage). The Insurers’ proposed
interpretation fails to do just that. Because the parties expressly excluded any restitution
resulting from a final adjudication through the Ill-Gotten Gains Provision, they must have
intended to include any restitution not resulting from a final adjudication (say, a settlement)
within the definition of “Loss”. And to interpret the Uninsurable Provision to always
preclude coverage for restitution would nullify the Ill-Gotten Gains Provision, which plainly
says that only a final adjudication precludes coverage for restitution. The provision must
have effect.
7
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MAY 19 2015 p 28
The Insurers further contend that a line of cases starting with the Seventh Circuit’s
decision in Level 3 Communications, Inc. v. Federal Insurance Co., 272 F.3d 908 (7th Cir.
2001), support the proposition that, despite clear policy language to the contrary, restitution
is uninsurable. In Level 3, the insured claimed coverage for the settlement of a securities-
fraud action. Id. at 909. The insurance company responded that the settlement was
restitutionary and not a covered loss. Id. at 909-10. The Seventh Circuit agreed, concluding
that a “loss” within the meaning of an insurance contract cannot include the restoration of
an ill-gotten gain. Id. at 910. In reaching that conclusion, the Seventh Circuit reasoned that
insurance is “designed to cover only losses that injure the insured,” and “[a]n insured incurs
no loss within the meaning of the insurance contract by being compelled to return property
that it had stolen.” Id. at 910-11. The Seventh Circuit also rejected the notion that a
judgment was required to determine that the settlement was not a covered loss, stating that
regardless of whether the payment resulted from a settlement or a judgment, the insured had
to disgorge profits that allegedly were improperly obtained. Id. at 911-12.
The Court acknowledges the rule of Level 3 and its progeny that restitution is
generally uninsurable. An insured incurs no loss when it unlawfully takes money or property
and is forced to return it. Asking the insurance company to pick up the tab would only
bestow an unjustified windfall on the insured. But virtually all cases the Insurers cite that
follow Level 3 are distinguishable because they involved policies without a specific
provision requiring a “final adjudication.” The parties here agreed that the Level 3 rule
would only control if a final adjudication—not a settlement—resolved that U.S. Bank was
8
Case 0:12-cv-03175-PAM-JSM Document 105 Filed 07/03/14 Page 8 of 11
MAY 19 2015 p 29
not legally entitled to the overdraft fees and must return them. The parties knew about the
Level 3 decision when they executed the policies and still decided to cover a settlement
constituting restitution absent a final adjudication. Without governing Delaware law or
controlling policy language requiring otherwise, the parties’ agreement must be enforced.
See ConAgra Foods, 21 A.3d at 69 (stating that the plain meaning of clear policy language
must be enforced).
In sum, the Insurers’ reliance on the Uninsurable Provision to assert that the
settlement is not a covered loss under the policies is misplaced. Delaware law does not
prohibit insurance for restitution and the parties agreed that restitution is insurable when, as
here, the underlying allegations of ill-gotten gains were not finally adjudicated.
II. Extension-of-Credit Provision
The Insurers also argue that the policies do not cover the settlement under the
Extension-of-Credit Provision. The Insurers contend that the settlement stems from U.S.
Bank’s overdraft policy of high-to-low posting, and that overdraft protection constitutes an
extension of credit to its customers. So, say the Insurers, the settlement was paid as a result
of an extension of credit, which is not a covered loss under the policies.
The Insurers are right that the Extension-of-Credit Provision omits from the policies’
definition of “Loss” money paid “as a result of any loan, lease or extension of credit” by U.S.
Bank. The Insurers also are right that at least one court has held that a bank’s practice of
covering customer overdrafts constitutes a loan to its customers for insurance purposes. See
Affilliated Bank/Morton Grove v. Hartford Accident & Indem. Co., No. 91-4446, 1992 WL
9
Case 0:12-cv-03175-PAM-JSM Document 105 Filed 07/03/14 Page 9 of 11
MAY 19 2015 p 30
91761, at *4 (N.D. Ill. Apr. 22, 1992). But in interpreting and applying the Extension-of-
Credit Provision to preclude coverage of the settlement, the Insurers are wrong in two ways.
First, the Insurers’ interpretation of the Extension-of-Credit Provision is overbroad
and untenable. See Penn Mut. Life Ins., 695 A.2d at 1149 (stating that insurance policies
must be interpreted “in a common sense manner”). It is overbroad because the provision
fundamentally is designed to prevent U.S. Bank from obtaining insurance coverage for losses
due to unpaid loans, which are not at issue here. And it is untenable because, taken to its
extent, the provision would bar coverage of any professional-liability claim relating to U.S.
Bank’s lending operations. The parties could not have intended to exclude from coverage
such a large swath of potential claims.
Second, the Insurers’ application of the Extension-of-Credit Provision erroneously
assumes that the settlement was based on an extension of credit. The class actions alleged
that the overdraft fees were charged against transactions while there still were positive
balances in customers’ accounts—before any overdraft protection was extended. Thus, the
assessment of those fees, and their repayment as required by the settlement, were based on
the use of high-to-low posting and not on an extension of credit.
For those two reasons, the Insurers’ reliance on the Extension-of-Credit Provision to
assert that the settlement is not a covered loss under the policies is likewise misplaced.
10
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MAY 19 2015 p 31
CONCLUSION
At this stage of the proceedings, the Insurers have not clearly established as a matter
of law that either the Uninsurable Provision or the Extension-of-Credit Provision prevents
the settlement from being a covered loss under the insurance policies. Accordingly, IT IS
HEREBY ORDERED that:
1. Indian Harbor’s Motion for J udgment on the Pleadings (Docket No. 46) is
DENIED; and
2. ACE American’s Motion for J udgment on the Pleadings (Docket No. 48) is
DENIED.
Dated: J uly 3, 2014
s/ Paul A. Magnuson
Paul A. Magnuson
United States District Court J udge
11
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MAY 19 2015 p 32
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
U.S. Bank National Association and Case No. 12-cv-3175 (PAM/J SM)
U.S. Bancorp,
Plaintiffs,
v. MEMORANDUM AND ORDER
Indian Harbor Insurance Company and
ACE American Insurance Company,
Defendants.
___________________________________________________________
This matter is before the Court on U.S. Bank’s Motion for Summary J udgment.
For the reasons that follow, the Court grants the Motion.
BACKGROUND
This is a fiercely contested insurance case. U.S. Bank National Association and
U.S. Bancorp (collectively “U.S. Bank”) are suing Indian Harbor Insurance Company
and ACE American Insurance Company (collectively the “Insurers”) for coverage of both
$30 million out of a $55 million settlement payment and related defense costs in an
overdraft-fee dispute. Though the issues are complicated, the facts are straightforward.
A. Overdraft Fees
U.S. Bank, like many banks, offers overdraft protection to its customers with
checking accounts. When customers attempt transactions for more money than is in their
accounts, they overdraw the accounts. As a service, U.S. Bank pays the transactions. To
compensate for that service, U.S. Bank charges a fee for each overdraft. Customers are
Case 0:12-cv-03175-PAM-JSM Document 148 Filed 12/16/14 Page 1 of 19
MAY 19 2015 p 33
assessed overdraft fees for transactions that initially overdraw their accounts and for
additional transactions until they deposit funds to cover the overdrafts.
Because U.S. Bank charges customers overdraft fees for transactions that either
cause their accounts to be overdrawn or happen while their accounts are overdrawn, the
point at which the accounts become overdrawn—and thus the order in which the
transactions post to the accounts—matters. If smaller transactions post before larger
transactions, the accounts will deplete and become overdrawn at a slower rate, fewer
transactions will remain to post after the accounts became overdrawn, and fewer
overdraft fees will be assessed for the remaining transactions. But if larger transactions
post before smaller transactions, the opposite will occur.
To illustrate, take this example. A customer has $200 in her checking account.
Her bank charges a $25 fee each time she overdraws the account. One day, she makes
five purchases with her debit card in this order: $4 café Americano, $20 dozen doughnuts
for the office, $30 birthday gift for her daughter, $300 airplane ticket to Florida, and
$50 theater tickets. If the transactions post to her account from smallest to largest, only
the airplane ticket will overdraw the account and incur one overdraft fee of $25. If the
transactions post chronologically, both the airplane ticket and the theater tickets will
overdraw the account and incur two overdraft fees of $50. And if the transactions post
from largest to smallest, all the transactions will overdraw the account and incur five
overdraft fees of $125.
Case 0:12-cv-03175-PAM-JSM Document 148 Filed 12/16/14 Page 2 of 19
MAY 19 2015 p 34
B. Underlying Class Actions
Beginning in 2009, three class actions were brought against U.S. Bank for
overcharging overdraft fees to its customers.
1
(Gilinsky Aff. (Docket No. 128) Exs. 1-3.)
In particular, the class actions alleged that U.S. Bank unlawfully engaged in high-to-low
posting—in that it posted customers’ debit-card transactions to their checking accounts
from largest to smallest—to create the most overdrafts and maximize the assessed
overdraft fees. (Id.) The class actions also alleged that U.S. Bank inadequately disclosed
to its customers that it posted their transactions from high to low. (Id.) The class actions
asserted claims for breach of contract, unconscionability, conversion, and unjust
enrichment; and sought remedies of declaratory relief, return of the excess overdraft fees,
and damages. (Id.) Eventually, the class actions were transferred to a multi-district
litigation in the Southern District of Florida.
2
(Savage Aff. (Docket No. 127) ¶ 2.)
At the time, U.S. Bank maintained professional-liability insurance with the
Insurers. (Gilinsky Aff. Exs. 4-5.) It had purchased a primary policy from Indian Harbor
with a $20 million liability limit, subject to a $25 million deductible. (Gilinsky Aff.
Ex. 4.) It had also purchased an excess policy from ACE American with a $15 million
liability limit. (Gilinsky Aff. Ex. 5.) The policies grant coverage for “Loss which [U.S.
Bank] shall become legally obligated to pay as result of any Claim first made against [it]
1
The class actions were Speers v. U.S. Bank, N.A., No. 3:09-cv-409 (HU) (D. Or. filed
April 17, 2009); Waters v. U.S. Bancorp, No. 3:09-cv-2071 (J SW) (N.D. Cal. filed May
12, 2009); and Brown v. U.S. Bank, N.A., No. 2:10-cv-356 (RMP) (E.D. Wash. filed Oct.
13, 2010).
2
See In re Checking Account Overdraft Litig., No. 1:09-md-2036 (J LK) (S.D. Fla.).
Case 0:12-cv-03175-PAM-JSM Document 148 Filed 12/16/14 Page 3 of 19
MAY 19 2015 p 35
during the Policy Period arising out of any Wrongful Act committed by [it] during or
prior to the Policy Period while performing Professional Services.” (Gilinsky Aff. Ex. 4,
at 15.) The policies further require that U.S. Bank obtain the Insurers’ consent before
settling a claim. (Id. at 17.)
In 2012, U.S. Bank entered into private mediation to resolve the class actions and
discovered an opportunity to reach a settlement. (Savage Aff. ¶ 9.) Complying with the
policies, it asked the Insurers for consent. (Id. ¶ 10.) Indian Harbor consented to a
settlement of $45 million and ACE American consented to a settlement of $60 million,
yet both Insurers reserved their rights to later challenge coverage. (Gilinsky Aff. Exs. 26-
27.) Having received the Insurers’ consent, U.S. Bank settled the class actions in 2013
for $55 million. (Gilinsky Aff. Exs. 25, 28.) Under the settlement, U.S. Bank agreed to
pay the $55 million into a fund to be allocated among the class members. (Id.) But U.S.
Bank did not admit liability on the claims. (Id.) Nor did the settlement characterize the
payment as restitution. (Id.)
C. Current Coverage Lawsuit
U.S. Bank next sought insurance coverage from the Insurers for the amount paid
to defend against and settle the class actions. (See Savage Aff. ¶ 12.) Within the policy
terms, it demanded coverage for more than the $25 million deductible but less than the
total $35 million liability limit, or $30 million plus defense costs. (Id.)
The Insurers denied coverage, principally on the ground that the settlement was
not a “Loss” under the policies. (Id.; Gilinsky Aff. Ex. 31.) The policies define “Loss”
as “the total amount which [U.S. Bank] becomes legally obligated to pay on account of
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each Claim . . . in each Policy Period . . . made against [it] for Wrongful Acts . . .
including, but not limited to, damages, judgments, settlements, costs, pre-judgment and
post-judgment interest and Defense Costs.” (Gilinsky Aff. Ex. 4, at 21.) The policies
except from the loss definition, as relevant here, either “[m]atters which are uninsurable
under the law pursuant to which this Policy is construed” (the “Uninsurable Provision”)
or “principal, interest, or other monies either paid, accrued, or due as the result of any
loan, lease or extension of credit by [U.S. Bank]” (the “Extension-of-Credit Provision”).
(Id. at 22.) And although it may be a loss, the policies exclude from coverage “any
payment for Loss in connection with any Claim made against [U.S. Bank] . . . brought
about or contributed in fact by any . . . profit or remuneration gained by [U.S. Bank] to
which [it] is not legally entitled . . . as determined by a final adjudication in the
underlying action” (the “Ill-Gotten Gains Provision”). (Id. at 15.) In the Insurers’ view,
the Uninsurable Provision barred coverage because the settlement constitutes restitution
and restitution is uninsurable as a matter of public policy. (Gilinsky Aff. Ex. 31.)
U.S. Bank disagreed and sued the Insurers for breach of contract and a declaratory
judgment. (Compl. (Docket No. 1).) It alleged that the settlement falls within the
policies’ loss definition and is covered, the Insurers must pay the covered amount, their
refusal to do so is a breach of the policies, and they are responsible for the resulting
damages. (Id. ¶¶ 67-83.) The Insurers denied the allegations. (Ans. (Docket Nos. 24 &
33).)
The Insurers then moved for judgment on the pleadings, arguing that the
settlement was not a covered loss under the policies based on the Uninsurable Provision
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and the Extension-of-Credit Provision. (See Mem. & Order (Docket No. 105) 1-3.)
Applying the policies’ plain language, the Court denied judgment on the pleadings on
both bases. (Id. at 3-11.)
Discontent with that decision, the Insurers proceeded to secure its immediate
reversal. They first sought reconsideration of the decision, which the Court denied.
(Order (Docket No. 108).) They also sought certification of the decision for interlocutory
appeal under 28 U.S.C. § 1292(b), and for legal resolution to the Delaware Supreme
Court, both of which the Court denied. (Mem. & Order (Docket No. 139).)
U.S. Bank now moves for summary judgment. Because the parties have
conducted relatively no meaningful discovery since the Court denied judgment on the
pleadings (other than the production of documents about the underlying class actions and
general claims-handling processes), the current record is effectively the same as it was
then.
DISCUSSION
Summary judgment should be granted if the moving party shows that there are no
genuine disputes of material fact and that it is entitled to judgment as a matter of law.
Fed. R. Civ. P. 56(a). A fact is material if its resolution affects the outcome of the case.
Paine v. J efferson Nat’l Life Ins. Co., 594 F.3d 989, 992 (8th Cir. 2010). A dispute is
genuine if the evidence could cause a reasonable jury to return a verdict for either party.
Id. When evaluating a motion for summary judgment, the Court must view the facts in
the light most favorable to the nonmoving party and draw all reasonable inferences in that
party’s favor. Marlowe v. Fabian, 676 F.3d 743, 746 (8th Cir. 2012).
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The overarching issue here is whether the policies cover the settlement. The
parties do not dispute that the settlement relates to a claim made against U.S. Bank during
the policy period for a wrongful act allegedly committed by it while performing
professional services. Instead, they dispute that the settlement is a loss. Whether the
settlement is a loss turns on the interpretation of the policies’ definition of loss.
When interpreting an insurance policy, the Court—a federal court sitting in
diversity—applies state substantive law. E-Shops Corp. v. U.S. Bank Nat’l Ass’n, 678
F.3d 659, 663 (8th Cir. 2012). The policies are governed by Delaware law. (Gilinsky
Aff. Ex. 4, at 25.) Under Delaware law, the interpretation of an insurance policy is a
question of law. Rhone-Poulenc Basic Chemicals Co. v. Am. Motorist Ins. Co., 616 A.2d
1192, 1195 (Del. 1992). Delaware courts interpret an insurance policy, like all contracts,
“in a common sense manner, giving effect to all provisions so that a reasonable
policyholder can understand the scope and limitation of coverage.” Penn Mut. Life Ins.
Co. v. Oglesby, 695 A.2d 1146, 1149 (Del. 1997). If the policy language is clear and
unambiguous, its plain meaning must be enforced. ConAgra Foods, Inc. v. Lexington
Ins. Co., 21 A.3d 62, 69 (Del. 2011). But if the policy language is ambiguous—in that it
is susceptible to two or more reasonable interpretations—it is to be construed against the
insurer who drafted it and for the insured. Id.
The parties do not dispute that the settlement satisfies the policies’ general loss
definition, as outlined above. Rather, they dispute that the settlement falls within one of
these two exceptions to that definition: the Uninsurable Provision and the Extension-of-
Credit Provision.
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Pertinent to those exceptions, the material facts are undisputed. The Insurers
contend that factual disputes exist and further discovery is needed mainly on three issues:
the underwriting intent of the policies, the nature and propriety of high-to-low posting
and the settlement, and the account balances of customers who were assessed overdraft
fees. (See Sandnes Aff. (Docket No. 136).) But as explained below, those issues do not
raise genuine disputes of material fact because the policy language is unambiguous and
extrinsic evidence of intent is inconsequential, the legality of high-to-low posting is not
for the Court to determine and the settlement speaks for itself, and customers’ account
balances are not dispositive.
To resolve whether the policies cover the settlement, the Court is therefore left to
decide, as a matter of law, whether the settlement falls within either the Uninsurable
Provision or the Extension-of-Credit Provision and thus is not a loss.
A. Uninsurable Provision
The Insurers primarily argue that the settlement is not a loss under the Uninsurable
Provision. According to the Insurers, the settlement requires U.S. Bank to return
unlawfully assessed overdraft fees to its customers, returning something that one
wrongfully took to its rightful owner constitutes restitution, and restitution is uninsurable
under Delaware law. U.S. Bank responds that high-to-low posting complies with the law,
the Ill-Gotten Gains Provision indicates that coverage exists when claims alleging ill-
gotten gains and seeking disgorgement of those gains are settled before a final
adjudication in the underlying action, and no Delaware authority forbids insurance
coverage for restitution.
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1. Is Restitution Insurable Under Delaware Law?
If the Insurers are correct that the settlement constitutes restitution, the Court
would need to examine whether restitution is insurable under Delaware law.
Unfortunately, the Insurers have failed to cite, and the Court cannot locate, any Delaware
statute or case law reaching that issue. The parties have previously speculated on how a
Delaware court would rule. U.S. Bank suggested that Delaware courts do not readily
void insurance coverage based on public-policy considerations due to their “pro-
contractarian,” “pro-banking,” and “pro-policyholder” tilt. And the Insurers insisted that
Delaware courts would simply follow the lead of other States that prohibit coverage.
But the Court need not decide the insurability of restitution under Delaware law
because, even if restitution is not insurable, the policies require the settlement to actually
be—and not just allegedly be—restitution to be uninsurable. For this Motion, the Court
will therefore assume without deciding that Delaware law precludes insurance coverage
for restitution as a matter of public policy. That assumption makes sense because an
insured does not suffer loss when it wrongfully takes money or property and is forced to
return it; asking the insurer to pick up the tab would only bestow an unjustified windfall
on the insured. See J .P. Morgan Sec. Inc. v. Vigilant Ins. Co., 21 N.Y.3d 324, 335-36
(2013) (“[A] ‘loss’ within the meaning of an insurance contract does not include the
restoration of an ill-gotten gain.” (citation and quotation marks omitted)).
Consistent with that assumption, the policies unambiguously do not cover
restitution. The Uninsurable Provision carves out from the loss definition “[m]atters
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which are uninsurable” under Delaware law. (Gilinsky Aff. Ex. 4, at 22.) If restitution is
uninsurable under Delaware law, it is obviously not a covered loss under the policies.
2. If Not, Does the Settlement Constitute Restitution?
That conclusion, however, does not end the analysis. The crux of this dispute is
not whether restitution is insurable, but whether the settlement constitutes restitution.
This is because another provision in the policies, the Ill-Gotten Gains Provision, directly
addresses the circumstance when an insured pursues coverage for a payment that resolves
claims alleging ill-gotten gains and seeking disgorgement of those gains—or put
differently, restitution. The provision excludes from coverage a payment for loss
connected to a claim resulting from money to which U.S. Bank “is not legally entitled . . .
as determined by a final adjudication in the underlying action.” (Id. at 15.) The insertion
of that provision in the policies begs the question: Can a payment be restitutionary and
uninsurable under the policies based on (1) a settlement resolving claims that allege ill-
gotten gains and seek disgorgement of those gains or (2) a final adjudication in the
underlying action determining that the allegations of ill-gotten gains have merit and
ordering the disgorgement of those gains? The policies choose the second answer.
The policies unambiguously require that a final adjudication in the underlying
action determine that a payment is restitution before the payment is barred from coverage
as restitution. The Court must interpret the loss definition and its exceptions consistently
with all policy provisions—even the exclusions. See O’Brien v. Progressive N. Ins. Co.,
785 A.2d 281, 287 (Del. 2001) (directing that provisions of insurance policies be read “as
a whole” and not be rendered “meaningless”); Westfield Ins. Co. v. Robinson Outdoors,
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Inc., 700 F.3d 1172, 1175 (8th Cir. 2012) (explaining that exclusions equally affect the
scope of coverage). The Uninsurable Provision omits from coverage restitution, and the
Ill-Gotten Gains Provision omits from coverage a payment that a final adjudication in the
underlying action determined is restitution. If the Court interpreted the Uninsurable
Provision to preclude coverage for a payment based on a settlement resolving claims for
restitution, it would nullify the Ill-Gotten Gains Provision that precludes coverage for a
payment based only on a final adjudication determining that the claims warrant
restitution. So to interpret the two provisions consistently, the Court must read the
Uninsurable Provision to bar coverage for a payment that a final adjudication in the
underlying action determined is restitution.
Under that interpretation, the settlement is not a payment that a final adjudication
in the underlying action determined is restitution. When an underlying action alleging ill-
gotten gains and seeking disgorgement of those gains settles before trial, there is no final
adjudication in that action determining that the gains were ill-gotten and ordering the
return of those gains. See AT & T v. Clarendon Am. Ins. Co., No. 04C-11-167 (J RJ ),
2008 WL 2583007, at *7 (Del. Super. Ct. J une 25, 2008). Here, where the class actions
alleging that U.S. Bank unlawfully assessed overdraft fees and seeking the return of those
fees settled before trial and without an admission of liability, there was no final
adjudication determining that U.S. Bank committed unlawful conduct and ordering the
refund of the profits derived from that conduct. In other words, the settlement allegedly
constitutes restitution but is not a final adjudication determining restitution.
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The Court emphasizes that it will not automatically presume—as the Insurers do—
that the settlement constitutes restitution because it resolved claims alleging ill-gotten
gains and seeking disgorgement of those gains. Not only does the clear policy language,
and especially the Ill-Gotten Gains Provision, prevent the Court from doing so. But the
common-sense effect of a settlement does as well. If a settlement resolves claims
alleging unlawful activity but excludes an admission of liability for the activity, it does
not establish that the underlying allegations are true or false. See Atwell v. RHIS, Inc.,
974 A.2d 148, 155 (Del. 2009) (“We cannot allow litigants to imply that one party’s
decision to settle means that the settling party has admitted liability.”). Instead, a
settlement represents the parties’ willingness to resolve the claims after weighing the
negotiated settlement amount against the potential judgment amount and accounting for
the costs and benefits of continued litigation. That is exactly what this settlement was.
3
3. Are Any of the Insurers’ Counterarguments Availing?
The Insurers quarrel with the Court’s interpretation and application of the
Uninsurable Provision on five noteworthy grounds.
First, the Insurers contend that the Ill-Gotten Gains Provision cannot affect the
Uninsurable Provision because the Uninsurable Provision grants coverage and the Ill-
Gotten Gains Provision excludes coverage. It is, say the Insurers, a maxim of insurance
law that an exclusion cannot generate a grant. What the Insurers fail to recognize,
3
The Court also emphasizes that it is not its role to decide whether U.S. Bank unlawfully
assessed overdraft fees. As the Court reads the Ill-Gotten Gains Provision, the court in
the underlying action must finally adjudicate whether the allegations of ill-gotten gains
have merit, not the court in the coverage action. The Court can decide whether there was
a final adjudication in the underlying action, and has determined here that there was not.
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however, is that the existence of a coverage exclusion may alter the scope of a coverage
grant. Parties have no reason to exclude a particular matter from coverage in an
insurance policy if they did not intend that the policy initially granted coverage for that
matter. Concluding to the contrary would strip the coverage exclusion of any purpose,
and it must have effect. So too here. By excluding from coverage a payment that a final
adjudication in the underlying action determined to be restitution, the parties implicitly
granted coverage for a payment that is merely alleged to be restitution.
Second, the Insurers contend that the Ill-Gotten Gains Provision also cannot affect
the Uninsurable Provision because exceptions (like the Uninsurable Provision) narrowly
focus on the loss recoverable under the policies, where exclusions (like the Ill-Gotten
Gains Provision) relate more broadly to claims covered by the policies. As the dispute
here hinges on the whether the settlement is a loss and not a claim, the Insurers implore
the Court to disregard the Ill-Gotten Gains Provision. The Court agrees that there is a
distinction between a claim and a loss—the policy defines them separately and observes
that a claim could include both covered and uncovered loss. The Court further agrees
that the Uninsurable Provision is an exception to a loss and the Ill-Gotten Gains Provision
is an exclusion to a claim.
But the Court gives no credence to the Insurers’ notion that a loss exception and a
claim exclusion have no bearing on each other. For one, the Insurers have presented no
legal authority to support otherwise. And two, the concepts of claim and loss are
connected in the context of this case. If a claim depends on the underlying allegations
and a loss depends on the requested remedy, whether a loss exists first depends on
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whether a claim exists because no remedy is warranted if the allegations lack merit. Or if
the allegations are for ill-gotten gains and the remedy is for disgorgement of those gains,
but a final adjudication must determine whether the allegations have merit to trigger a
claim exclusion, the final adjudication also impacts whether the remedy is warranted and
could trigger a loss exception. Hence, a claim exclusion can affect a loss exception.
Third, the Insurers protest that the interpretation leads to an absurd result where
settlements resolving claims for restitution are loss but judgments ordering restitution are
not loss. The Insurers highlight a myriad of cases for the proposition that, in determining
whether a settlement resolving claims that allege ill-gotten gains and seek disgorgement
of those gains is an insurable loss, the Court must look to the nature of the underlying
allegations and requested remedies and not to whether those allegations and remedies
were finally adjudicated. In short, according to the Insurers, it is irrelevant whether U.S.
Bank actually did anything wrong and must pay restitution so long as the settlement
resolved claims alleging wrongdoing and seeking relief that is restitutionary.
But that is not what the policies require. As discussed at length above, the policies
require that a final adjudication in the underlying action determine that claims for
restitution actually warrant restitution. Under a policy with a final-adjudication
requirement, mere allegations are insufficient. If allegations of unlawful activity are
never determined to be true, a payment to dispose of those allegations is not restitution
because restitution can only occur if that which is being returned was wrongfully taken.
So if U.S. Bank’s assessment of overdraft fees was lawful, the return of those fees cannot
be restitution because U.S. Bank is legally entitled to those fees.
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In that regard, all of the cases the Insurers cite are distinguishable. Several of the
cases concluding that restitution is uninsurable whether by settlement or judgment did not
involve policies that include a final-adjudication requirement. See, e.g., CNL Hotels &
Resorts, Inc. v. Twin City Fire Ins. Co., 291 F. App’x 220, 223-24 (11th Cir. 2008);
Level 3 Commc’ns, Inc. v. Fed. Ins. Co., 272 F.3d 908, 910-12 (7th Cir. 2001). The
cases holding that an allegedly restitutionary settlement is uninsurable despite policy
language requiring a final adjudication failed to otherwise analyze the impact of the final-
adjudication requirement. See, e.g., Dobson v. Twin City Fire Ins. Co., No. 11-cv-0192
(DOC/MLG), 2012 WL 2708392, at *9-10 (C.D. Cal. J uly 5, 2012); Aon Corp. v. Certain
Underwriters at Lloyd’s of London, No. 06-16852 (Ill. Cir. Ct. Ch. Div. Dec. 3, 2010).
And the two cases barring coverage for a settlement in an overdraft-fee dispute relied on
specific fee exclusions in the policies that the policies here do not contain. See PNC Fin.
Servs., Grp., Inc. v. Houston Cas. Co., No. 13-cv-331, 2014 WL 2862611, at *2-3 (W.D.
Pa. J une 24, 2014); Fidelity Bank v. Chartis Specialty Ins. Co., No. 1:12-cv-4259 (RWS),
2013 WL 4039414, at *3-4 (N.D. Ga. Aug. 7, 2013).
Fourth, the Insurers contend that the Court is erroneously allowing parties to
contract around public policy and agree to cover uninsurable restitution. See CSX
Transp., Inc. v. Mass. Bay Transp. Auth., 697 F. Supp. 2d 213, 229 (D. Mass. 2010)
(“Even sophisticated parties cannot contract around public policy.”). But the Court does
not conclude that parties may contract to insure a payment, like restitution, that is
uninsurable under public policy. All the Court concludes is that parties may agree to
ensure that a payment truly fits within a category of matters that are legally uninsurable.
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That contractual ability does not change the categories themselves and render insurable
that which is uninsurable. If restitution is uninsurable by public policy, the parties may
contract to require that the payment is actually—and not just allegedly—restitution. That
conclusion is consistent with public policy.
Finally, the Insurers warn that the interpretation will incentivize banks to settle
rather than litigate these types of lawsuits to obtain coverage for restitution. That
warning echoes the sentiment expressed in other cases. See, e.g., Level 3, 272 F.3d at
911 (declaring that it “can’t be right” that coverage for restitution could pivot on whether
it was made by way of settlement or judgment because the insured, “seeing the
handwriting on the wall,” could simply agree “to pay the plaintiffs in the fraud suit all
they were asking for” and then “retain the profit it had made from a fraud” through a
coverage reimbursement). Yet insurance companies can counter that incentive by not
consenting to the settlement. The policies require that the Insurers consent before U.S.
Bank may settle a claim. If the Insurers were concerned that the settlement constituted
restitution, they could have refused consent or conditioned consent on an admission of
liability for wrongdoing or a stipulation that the payment was restitution. The Insurers
would have been wiser to refuse or condition consent at the outset rather than consent and
later contest coverage in avoidable litigation.
Bottom line, the dispute on the Uninsurable Provision is not about whether
restitution is insurable; the Court assumes that it is not. The dispute is about whether the
settlement constitutes restitution. The clear policy language controls on that question,
and requires that for a payment to be restitution, it must be based on a final adjudication
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MAY 19 2015 p 48
in the underlying action determining it is restitution instead of a settlement resolving
claims for restitution. Because the settlement is not a payment that a final adjudication in
the underlying action determined is restitution, the Uninsurable Provision does not
prevent the settlement from being a loss.
B. Extension-of-Credit Provision
The Insurers alternatively argue that the settlement is not a loss under the
Extension-of-Credit Provision. They say that the settlement comprises the return of
overdraft fees paid or accrued as the result of overdraft protection and overdraft
protection is an extension of credit. U.S. Bank responds that the provision contemplates
losses due to unpaid loans and not fees for lending services, and the overdraft fees were
assessed while customers still had positive account balances and before any overdraft
protection was provided.
To be sure, the Extension-of-Credit Provision unambiguously removes from the
loss definition “monies either paid, accrued, or due as the result of . . . an extension of
credit.” (Gilinsky Aff. Ex. 4, at 22.) And a few courts have held that a bank’s practice of
paying transactions that overdraw customers’ accounts constitutes a loan to its customers
for insurance purposes. See Sayan v. Riggs Nat’l Bank of Wash., D.C., 544 A.2d 267,
269 (D.C. 1988) (stating that the “payment of an overdraft by the bank carries with it an
implicit agreement by the customer to repay the loan”); Affiliated Bank/Morton Grove v.
Hartford Accident & Indem. Co., No. 91-cv-4446, 1992 WL 91761, at *6 (N.D. Ill. Apr.
22, 1992) (reasoning that “an overdraft by a bank depositor is treated as a loan from the
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bank to the depositor just as depositors with positive balances are considered creditors of
the bank”).
That said, this case is not about the provision of overdraft protection, but the
assessment of overdraft fees. The settlement resolved claims that ultimately alleged as
injury that U.S. Bank overcharged overdraft fees through high-to-low posting and not that
U.S. Bank offered overdraft protection in the first place. This is a distinction that makes
a difference given that an overdraft fee is simply a fee for a service and overdraft
protection is likely an extension of credit. If the settlement had compensated customers
for improperly provided overdraft protection, it would have been paid as the result of a
loan. But if the settlement returned the assessed overdraft fees, as the Insurers urge, it
was paid as the result of a fee. The second scenario describes this case.
Because the settlement was not paid as the result of an extension of credit, the
Extension-of-Credit Provision does not prevent the settlement from being a loss. As the
Court decides this issue on that basis, it need not address the parties’ arguments about
whether the provision encompasses only loan losses and whether the overdraft fees were
assessed against positive account balances.
CONCLUSION
The settlement falls within neither the Uninsurable Provision nor the Extension-of-
Credit Provision—the Insurers’ only defenses to coverage—and thus is a covered loss
under the policies. The Insurers must indemnify U.S. Bank for $30 million out of the
$55 million settlement payment and reimburse it for related defense costs. Accordingly,
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MAY 19 2015 p 50
IT IS HEREBY ORDERED that U.S. Bank’s Motion for Summary J udgment (Docket
No. 125) is GRANTED.
LET JUDGMENT BE ENTERED ACCORDINGLY.
Dated: _December 16, 2014_ _s/Paul A. Magnuson__
Paul A. Magnuson
United States District Court J udge
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OAO450 (Rev. 5/85) J udgment in a Civil Case
UNITED STATES DISTRICT COURT
District of Minnesota
U.S. Bank National Association and
U.S. Bancorp JUDGMENT IN A CIVIL CASE
V.
Case Number: 12-cv-3175 (PAM/J SM)
Indian Harbor Insurance Company and
ACE American Insurance Company
Jury Verdict. This action came before the Court for a trial by jury. The issues have been tried and the jury
has rendered its verdict.
X Decision by Court. This action came to trial or hearing before the Court. The issues have been tried or
heard and a decision has been rendered.
IT IS ORDERED AND ADJ UDGED THAT:
U.S. Bank’s Motion for Summary J udgment (Docket No. 125) is GRANTED.
December 16, 2014 RICHARD D. SLETTEN, CLERK
Date
s/L. Brennan
(By) L. Brennan, Deputy Clerk
Case 0:12-cv-03175-PAM-JSM Document 149 Filed 12/16/14 Page 1 of 1
MAY 19 2015 p 52
UNITED STATES DISTRICT COURT
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The appeal filing fee is $505.00. If you are indigent, you can apply for leave to proceed in forma
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The purpose of this notice is to summarize the time limits for filing with the District Court Clerk's Office
a Notice of Appeal to the Eighth Circuit Court of Appeals from a final decision of the District Court in a
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This is a summary only. For specific information on the time limits for filing a Notice of
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period for filing a Notice of Appeal expires, the party bringing the motion must give the opposing parties
notice of it. The District Court may grant the motion, but only if excusable neglect or good cause is
shown for failing to file a timely Notice of Appeal.
Case 0:12-cv-03175-PAM-JSM Document 149-1 Filed 12/16/14 Page 1 of 1
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UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
U.S. Bank National Association and Case No. 12-cv-3175 (PAM/J SM)
U.S. Bancorp,
Plaintiffs,
v. MEMORANDUM AND ORDER
Indian Harbor Insurance Company and
ACE American Insurance Company,
Defendants.
___________________________________________________________
This matter is before the Court on U.S. Bank’s Motion to Amend the J udgment.
For the reasons that follow, the Court grants the Motion to the extent ordered below.
BACKGROUND
In this insurance case, U.S. Bank National Association and U.S. Bancorp
(collectively “U.S. Bank”) sought coverage from Indian Harbor Insurance Company and
ACE American Insurance Company (collectively the “Insurers”) for both $30 million out
of a $55 million settlement payment and $5 million of related defense costs in an
overdraft-fee dispute. The Court has previously detailed the facts of the underlying
actions and current lawsuit, (see, e.g., Mem. & Order (Docket No. 148) 1-6), and will
repeat only the facts that are relevant to this Motion.
Beginning in 2009, three class actions were brought against U.S. Bank for
allegedly overcharging overdraft fees to its customers. (Stroebel Aff. (Docket No. 152)
¶ 2.) At the time, U.S. Bank maintained professional-liability insurance with the
Insurers. (Stanford Decl. (Docket No. 159) Ex. 1.) It had purchased a primary policy
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MAY 19 2015 p 54
2
from Indian Harbor with a $20 million liability limit, subject to a $25 million deductible.
(Id.) It had also purchased an excess policy from ACE American with a $15 million
liability limit. (Id.) The policies grant coverage for loss that U.S. Bank “shall become
legally obligated to pay” based on a claim made during the policy period. (Id. at 1.) And
the policies contain a choice-of-law provision, directing that they “shall be governed by
the laws of the State of Delaware.” (Id. at 11.) On J une 29, 2012, U.S. Bank reached a
“binding and enforceable” agreement in principle to settle the class actions for $55
million. (Stroebel Aff. ¶¶ 3-4; Saltzman-J ones Aff. (Docket No. 156) Ex. B.)
While the settlement process continued, U.S. Bank filed the Complaint in this case
on December 21, 2012, seeking insurance coverage from the Insurers for the amount paid
to defend against and settle the class actions. (Compl. (Docket No. 1).) In the
Complaint, U.S. Bank stated that, after notifying the Insurers of the class actions and its
desire to settle them, it had “agreed to settle [the class actions] for $55 million.” (Id.
¶¶ 49-54.) It further asserted claims for breach of contract and a declaratory judgment,
alleging that the settlement fell within the policies’ loss definition and was covered, the
Insurers had to pay the covered amount, their refusal to do so was a breach of the
policies, and they were responsible for the resulting damages. (Id. ¶¶ 67-83.) U.S. Bank
did not serve ACE American and Indian Harbor with the Complaint until April 17 and
18, 2013, respectively. (Summons (Docket Nos. 8, 10).)
U.S. Bank signed a written settlement agreement on February 7, 2013, and an
amended version on J uly 2, 2013. (Stanford Decl. ¶¶ 14-15, Ex. 5; Saltzman-J ones Aff.
Ex. B.) Under the amended version, U.S. Bank was not obligated to pay any money to
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MAY 19 2015 p 55
3
fund the settlement until August 9, 2013. (Stanford Decl. ¶ 19.) On J anuary 6, 2014, the
district court presiding over the class actions entered a final judgment approving the
settlement. (Id. Ex. 7.)
On December 16, 2014, this Court granted summary judgment in favor of U.S.
Bank, holding that the settlement is a covered loss under the policies. (Mem. & Order 6-
19.) The Court ordered that “[t]he Insurers must indemnify U.S. Bank for $30 million
out of the $55 million settlement payment and reimburse it for related defense costs.”
(Id. at 18.)
U.S. Bank now moves to amend that judgment for an award of prejudgment
interest under Minn. Stat. § 60A.0811, subd. 2(a).
DISCUSSION
As to prejudgment interest, the parties dispute three issues: (1) the applicable law,
(2) the propriety of prejudgment interest, and (3) the amount of prejudgment interest.
A. The Applicable Law
Before the Court can decide whether U.S. Bank is entitled to prejudgment interest
and, if it is, how much, the Court must resolve the thornier issue of what law to apply in
making those decisions. In a diversity case like this, the Court applies substantive state
law and procedural federal law. Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78 (1938). For
Erie purposes, prejudgment interest is a substantive matter of state law. Emmenegger v.
Bull Moose Tube Co., 324 F.3d 616, 624 (8th Cir. 2003).
The parties, however, contest which state’s prejudgment-interest law should apply.
U.S. Bank argues that the law of Minnesota, the forum state, governs. The Insurers argue
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MAY 19 2015 p 56
4
that the law of Delaware, as designated in the policies’ choice-of-law provision, governs.
Indeed, the choice of law matters immensely for various reasons, not the least of which is
the disparate interest rates. Compare Minn. Stat. § 60A.0811, subd. 2(a) (pegging the
rate for prejudgment interest in a breach-of-insurance-policy case at 10%); with 6 Del. C.
§ 2301(a) (setting the rate for prejudgment interest absent an agreement between the
parties at 5% over the Federal Reserve discount rate, which is currently 0.75%). When
two or more differing states’ laws could apply to a substantive issue, the Court looks to
the conflict-of-law principles of the state where it sits. Interstate Cleaning Corp. v.
Commercial Underwriters Ins. Co., 325 F.3d 1024, 1028 (8th Cir. 2003).
Because this case turned on insurance policies that contain a choice-of-law
provision, the Court must consider the effect of that provision under Minnesota conflict-
of-law principles. Minnesota courts are “committed to the rule that parties may agree
that the law of another state shall govern their agreement and will interpret and apply the
law of another state where such an agreement is made.” Milliken & Co. v. Eagle
Packaging Co., 295 N.W.2d 377, 380 n.1 (Minn. 1980) (citation and quotation marks
omitted). That rule, of course, has an exception: Even if a contract includes a valid
choice-of-law provision, Minnesota courts apply the law of the forum state to procedural
matters. Davis v. Furlong, 328 N.W.2d 150, 153 (Minn. 1983). Yet, unsurprisingly, an
exception to that exception exists: If the parties desire that another state’s law concerning
procedural matters should govern, they must “expressly” state so in the choice-of-law
provision. U.S. Leasing v. Biba Info. Processing Servs., Inc., 436 N.W.2d 823, 826
(Minn. App. 1989). The choice-of-law provision here does not so state.
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5
As a result, the pivotal issue is whether Minnesota law treats prejudgment interest
as a procedural matter for conflict-of-law purposes.
1
If it does, the forum state’s law, or
Minnesota law, applies. If it does not, the contractually agreed-to law, or Delaware law,
applies. In resolving whether prejudgment interest is procedural under Minnesota law,
the Court is bound to apply Minnesota law “as declared by its Legislature in a statute or
by its highest court in a decision.” Erie, 304 U.S. at 78.
The Minnesota Supreme Court has not addressed whether prejudgment interest is
a substantive or procedural matter. But it has long distinguished between substantive
law, or the law that “‘creates, defines, and regulates rights,’” and procedural law, or the
law that “‘prescribes method[s] of enforcing the rights or obtaining redress for their
invasion.’” Meagher v. Kavli, 88 N.W.2d 871, 879-80 (Minn. 1958). In other words, a
statute that does not create a new cause of action or affect a defense is procedural. State
v. J ohnson, 514 N.W.2d 551, 555 (Minn. 1994). Consistent with that distinction between
substantive and procedural matters, the Court must predict how the Minnesota Supreme
Court would characterize the nature of prejudgment interest. See Marvin Lumber &
Cedar Co. v. PPG Indus., Inc., 223 F.3d 873, 876 (8th Cir. 2000).
The Court concludes that prejudgment interest under Minn. Stat. § 60A.0811 is a
procedural matter for Minnesota conflict-of-law purposes. The statute allows an insured
1
That prejudgment interest is a substantive matter for Erie purposes does not
automatically mean that it is also a substantive matter for conflict-of-law purposes—the
two determinations are distinct. See Sun Oil Co. v. Wortman, 486 U.S. 717, 726 (1988)
(explaining that there is not “an equivalence between what is substantive under the Erie
doctrine and what is substantive for the purposes of conflict of laws”).
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6
who succeeds in a commercial or professional insurance coverage lawsuit to recover
prejudgment interest from the insurer:
An insured who prevails in any claim against an insurer based on the
insurer’s breach or repudiation of, or failure to fulfill, a duty to provide
services or make payments is entitled to recover ten percent per annum
interest on monetary amounts due under the insurance policy, calculated
from the date the request for payment of those benefits was made to the
insurer.
Minn. Stat. § 60A.0811, subd. 2(a). The statute does not create a new cause of action or
affect a defense—it assumes that the insured already prevailed on its existing claim.
Rather, the statute prescribes a remedy for the insured to enforce its right to coverage
under an insurance policy by providing a mechanism—interest from the date the insured
requests payment—that discourages the wrongful denial of coverage and encourages the
resolution of coverage disputes.
The Court’s conclusion that prejudgment interest under Minn. Stat. § 60A.0811 is
a procedural matter is bolstered by two decisions, one from the Minnesota Court of
Appeals and the other from the Eighth Circuit, which emphatically held that prejudgment
interest under Minn. Stat. § 549.09 (Minnesota’s general prejudgment-interest statute) is
also a procedural matter. See Zaretsky v. Molecular Biosystems, Inc., 464 N.W.2d 546
(Minn. App. 1990); Schwan’s Sales Enters., Inc. v. SIG Pack, Inc., 476 F.3d 594 (8th Cir.
2007).
In Zaretsky, the Minnesota Court of Appeals confronted a compensation dispute
where New J ersey law governed the substantive right of recovery but where the district
court had determined, over the defendant’s objection, that Minnesota law governed the
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7
award of prejudgment interest. 464 N.W.2d at 547-48. The court of appeals affirmed,
concluding that prejudgment interest, at least when awarded under § 549.09, is
procedural and therefore calculated under Minnesota law. Id. at 549-51.
In reaching that conclusion, the court of appeals acknowledged that the statute
“contains both substantive and procedural aspects,” but emphasized that it reflects
predominantly a procedural matter. Id. at 549-50. The court of appeals noted that
prejudgment interest has a dual purpose: “‘(1) to compensate the plaintiff for the loss of
use of his money . . . and (2) to promote settlement.’” Id. at 549 (quoting Burniece v. Ill.
Farmers Ins. Co., 398 N.W.2d 542, 544 (Minn. 1987)). And the court of appeals
reasoned that the statute, when split in two parts, served both of those purposes in a
procedural fashion. Id. at 550. The court of appeals interpreted the first part, which
“provides compensation for the loss of use . . . of the plaintiff’s money,” to be substantive
because it “appears to be an element of damages designed to make the plaintiff whole,”
but to also be procedural because it “affects the relationship between the parties as
litigants . . . and not their relationship on the underlying matter in dispute.” Id. By
contrast, the court of appeals interpreted the second part, which it termed the “offer-
counteroffer provision,” to be procedural because it “promotes the early settlement of
cases between litigants” and likewise “applies to the relationship of the parties as litigants
. . . and is unrelated to the merits of the case.” Id.
Having analyzed both parts, the court of appeals found § 549.09 “to be more
procedural than substantive in nature.” Id. The court of appeals reiterated that although
the statute “provide[s] additional compensation to the plaintiff,” the award of
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8
prejudgment interest as damages “is merely one effect of the procedural purpose of the
statute, which is to encourage settlements.” Id.
In light of the Minnesota Court of Appeals’s conclusion in Zaretsky, the Eighth
Circuit in Schwan’s affirmed the district court’s application of Minnesota law in
awarding prejudgment interest under § 549.09 on a breach-of-contract claim. 476 F.3d at
595-98. The contract contained a choice-of-law provision selecting Wisconsin law to
govern. Id. at 595. Nonetheless, the Eighth Circuit held that Minnesota law, the forum
state’s law, applied. Id. at 596-97. The Eighth Circuit cited Zaretsky to support that
Minnesota courts consider prejudgment interest to be a procedural matter governed by the
law of the forum state. Id. And the Eighth Circuit determined that “the issue of
prejudgment interest . . . is a procedural matter for conflict-of-law purposes under
Minnesota law.” Id. at 597.
The Insurers insist that Zaretsky and Schwan’s are distinguishable because they
involve a different prejudgment-interest statute with different language. Although the
statute at issue here differs somewhat from the statute at issue in Zaretsky and Schwan’s,
§ 60A.0811 features other hallmarks that convinced the courts in Zaretsky and Schwan’s
that § 549.09 is procedural. Though the statute provides additional compensation to the
insured, it relates to the insured and insurer as litigants and not to the merits of the case.
And the statute promotes early settlement by accruing prejudgment interest from the date
the insured requests payment.
In short, prejudgment interest under § 60A.0811 is a procedural matter for
conflict-of-law purposes under Minnesota law. Given that the policies’ choice-of-law
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9
provision does not expressly reach procedural matters, the Court will apply Minnesota
law in deciding prejudgment interest.
B. The Propriety of Prejudgment Interest
Having concluded that Minnesota law applies, the Court must determine whether
the Insurers owe prejudgment interest under § 60A.0811. Indian Harbor concedes that it
must pay some amount of prejudgment interest. But ACE American argues that it need
not pay any prejudgment interest. It points out that the statute allows prejudgment
interest “based on the insurer’s breach [of] a duty to provide services or make payments.”
Minn. Stat. § 60A.0811, subd. 2(a). And it reasons that it has not breached any duty
under the excess policy because, according to the policy’s exhaustion provision, its
coverage obligation has not yet been triggered.
ACE American’s argument is too little, too late. To be sure, § 60A.0811 warrants
an award of prejudgment interest only when the insurer has wrongfully denied coverage
or has otherwise breached one of its duties. See Manitou Vill. Chalet Townhomes v.
Harleysville Ins. Co., No. 12-cv-1386 (J NE/FLN), 2013 WL 1881056, at *2-3 (D. Minn.
Mar. 29, 2013) report and recommendation adopted, No. 12-cv-1386 (J NE/FLN), 2013
1881605 (D. Minn. May 6, 2013) (Ericksen, J .). Yet in granting summary judgment in
U.S. Bank’s favor, the Court has already held that ACE American wrongfully denied
coverage to U.S. Bank for the settlement. By neglecting to invoke the exhaustion
provision in previous briefing, ACE American has waived its right to invoke the
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10
provision now. Thus, an award of prejudgment interest against ACE American is
appropriate.
2
C. The Amount of Prejudgment Interest
Applying Minnesota law, the calculation of prejudgment interest against both
Insurers is relatively straightforward. The parties agree that § 60A.0811 fixes the annual
rate of prejudgment interest at 10%. The parties disagree, however, on the dates on
which the statute starts and stops accruing the prejudgment interest.
As for the starting point, U.S. Bank urges that the date is when it asked the
Insurers to cover the settlement, which it says is no later than when it filed the Complaint
on December 21, 2012. The Insurers counter that the date is not until the settlement was
finally approved on J anuary 6, 2014, as only then was U.S. Bank’s payment obligation in
the class actions certain and any earlier would unjustifiably reward U.S. Bank for
bringing a premature coverage lawsuit. No Minnesota court has addressed the start date
for accrual of prejudgment interest under § 60A.0811 when the insured requests coverage
for the settlement of an underlying claim before the settlement is finally approved. Once
again, the Court must therefore predict how the Minnesota Supreme Court would resolve
the issue. See Marvin Lumber, 223 F.3d at 876.
Under Minnesota law, the goal of statutory interpretation is “to ascertain and
effectuate” the Legislature’s intent. Minn. Stat. § 645.16. When interpreting a statute,
2
Neither Insurer contends that Minnesota law prohibits prejudgment interest in excess of
the policy limits, and for good reason. See Owatonna Clinic—Mayo Health Sys. v. Med.
Protective Co. of Fort Wayne, Ind., 639 F.3d 806, 813-14 (8th Cir. 2011) (concluding
that § 60A.0811 permits prejudgment interest in excess of a policy limit).
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11
Minnesota courts give words and phrases their plain and ordinary meaning. Graphic
Commc’ns Local 1B Health & Welfare Fund A v. CVS Caremark Corp., 850 N.W.2d
682, 689 (Minn. 2014). Further, they read the statute as a whole and give effect to all of
its provisions. In re Welfare of J .J .P., 831 N.W.2d 260, 264 (Minn. 2013).
Giving effect to all of § 60A.0811, the Court concludes that the Minnesota
Supreme Court would interpret the statute to start the accrual of prejudgment interest
when the insured requests payment from the insurer for the claim, but no sooner than
when the claim constitutes a monetary amount due under the insurance policy. The
statute unambiguously calculates prejudgment interest “from the date the request for
payment . . . was made to the insurer.” Minn. Stat. § 60A.0811, subd. 2. But the statute
also assesses the prejudgment interest “on monetary amounts due under the insurance
policy.” Id. In that way, the statute presumes that the insurer’s request for payment
relates to a claim that the policy covers. Any other interpretation, including the one
advanced by U.S. Bank, would nullify that language and absurdly allow an insured to
reap excessive prejudgment interest simply by requesting payment for a claim well before
the insured is liable on the claim.
The Court’s interpretation of § 60A.0811 is consistent with two other decisions
from this District interpreting the statute. In Avon State Bank v. BancInsure, Inc., the
Court found that the statute “unambiguous[ly]” calculates prejudgment interest from the
date of the payment request, regardless of whether the insured “actually paid the
settlement or defense costs for which it sought indemnification at the time.” No. 12-cv-
2557 (RHK/LIB), 2014 WL 1608262, at *2 (D. Minn. Apr. 18, 2014) (Kyle, J .). And in
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12
State Bank of Bellingham v. BancInsure, Inc., the Court determined that the “plain
language” of the statute measured prejudgment interest from the date the insured notified
the insurer of the loss. No. 13-cv-900 (SRN/J J G), 2014 WL 4829184, at *23 (D. Minn.
Sept. 29, 2014) (Nelson, J .). Similar to Avon and Bellingham, the Court reads the statute
to start the accrual of prejudgment interest not from the date the insured pays the
underlying judgment or the date the insurer denies coverage, but from the date the
insured becomes liable for the judgment and the insured requests coverage from the
insurer.
Here, the start date for the accrual of prejudgment interest is when U.S. Bank
served ACE American and Indian Harbor with the Complaint on April 17 and 18, 2013,
respectively. The Complaint unequivocally notified the Insurers of the settlement and
asked them to cover the settlement. The mere filing of the Complaint, without more
evidence, did not adequately request payment for the settlement. U.S. Bank did not do
that until it actually served the Complaint. In addition, and consistent with the Court’s
summary-judgment ruling, the settlement was a covered loss under the policies at the
time of service. The policies grant coverage for loss that U.S. Bank is “legally obligated
to pay” based on a claim. When service occurred, U.S. Bank had reached a contractually
binding settlement agreement and was therefore legally obligated to pay the settlement.
That U.S. Bank had not yet signed a formal agreement, paid anything under the
agreement, or obtained final approval of the agreement, as discussed above, are all
irrelevant under § 60A.0811.
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13
As for the stopping point, U.S. Bank presses that the date is not until the Court
enters judgment on this Motion specifying the amount to which each Insurer is liable.
The Insurers maintain that the date is when the Court entered judgment on U.S. Bank’s
Motion for Summary J udgment, or December 16, 2014. The difference between the
parties’ proposed dates reflects a disagreement about when a money judgment was
entered. Logically, the accrual of prejudgment interest ends when the accrual of
postjudgment interest begins, and postjudgment interest, which is a procedural matter of
federal law, begins to accrue when a “money judgment” is entered. 28 U.S.C. § 1961(a);
see also Happy Chef Sys., Inc. v. J ohn Hancock Mut. Life Ins. Co., 933 F.3d 1433, 1437-
38 (8th Cir. 1991). The Court’s entry of summary judgment was plainly a money
judgment. Though the Court may not have stated the obvious and specified the amount
each Insurer owed, its Order did more than declare the parties’ rights and obligations.
Instead, it quantified the total amount the Insurers owed and the policy limits then made
crystal clear how that amount would be divided. The stop date for the accrual of
prejudgment interest is when the Court entered judgment on the Motion for Summary
J udgment, or December 16, 2014.
In sum, U.S. Bank is entitled to an award of prejudgment interest under
§ 60A.0811 at an annual rate of 10%, starting on April 18, 2013 for Indian Harbor and
April 17, 2013 for ACE American, and stopping on December 16, 2014 for both Insurers.
On the $30 million settlement payment, this means that Indian Harbor owes
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MAY 19 2015 p 66
14
$3,326,027.40 and ACE American owes $1,665,753.42.
3
On the $5 million defense
costs, it appears that U.S. Bank incurred some of its defense costs before April 17, 2013
and the rest after that date. (See Stroebel Aff. Ex. A.) So ACE American owes
prejudgment interest on the defense costs incurred before April 17, 2013 as calculated
similarly to the settlement payment, and prejudgment interest on the defense costs
incurred after April 17, 2013 as calculated starting on the date the costs were incurred.
CONCLUSION
As prejudgment interest is a procedural matter under Minnesota law, Minnesota
law applies to the award of prejudgment interest. Under § 60A.0811, U.S. Bank may
recover prejudgment interest from both Insurers. Accordingly, IT IS HEREBY
ORDERED that:
1. U.S. Bank’s Motion to Amend the J udgment (Docket No. 150) is
GRANTED to the following extent;
2. The Court’s J udgment dated December 16, 2014 is amended to state:
a. Indian Harbor must pay U.S. Bank $20 million of the settlement
payment and $3,326,027.40 of prejudgment interest;
b. ACE American must pay U.S. Bank $10 million of the settlement
payment and $1,665,753.42 of prejudgment interest; and
3
The Court calculates prejudgment interest by taking $20 million for Indian Harbor and
$10 million for ACE American, multiplying that by the 10% annual interest rate, dividing
that by 365 days, and multiplying that by 607 days for Indian Harbor and 608 days for
ACE American.
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MAY 19 2015 p 67
15
c. ACE American must pay U.S. Bank $5 million of the defense costs
and prejudgment interest at the annual rate of 10%, starting on April
17, 2013 for those costs incurred before then and on the date the
costs were incurred if after then, and stopping on December 16,
2014.
LET JUDGMENT BE ENTERED ACCORDINGLY.
Dated: March 19, 2015
s/ Paul A. Magnuson
Paul A. Magnuson
United States District Court J udge
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OAO450 (Rev. 5/85) J udgment in a Civil Case
UNITED STATES DISTRICT COURT
District of Minnesota
U.S. Bank National Association and U.S.
Bancorp JUDGMENT IN A CIVIL CASE
V.
Case Number: 12-cv-3175 (PAM/J SM)
Indian Harbor Insurance Company and ACE
American Insurance Company
Jury Verdict. This action came before the Court for a trial by jury. The issues have been tried and the jury
has rendered its verdict.
X Decision by Court. This action came to trial or hearing before the Court. The issues have been tried or
heard and a decision has been rendered.
IT IS ORDERED AND ADJ UDGED THAT:
1. U.S. Bank’s Motion to Amend the J udgment (Docket No. 150) is GRANTED to the following extent;
2. The Court’s J udgment dated December 16, 2014 is amended to state:
a. Indian Harbor must pay U.S. Bank $20 million of the settlement payment and $3,326,027.40
of prejudgment interest;
b. ACE American must pay U.S. Bank $10 million of the settlement payment and $1,665,753.42
of prejudgment interest; and
c. ACE American must pay U.S. Bank $5 million of the defense costs and prejudgment interest
at the annual rate of 10%, starting on April 17, 2013 for those costs incurred before then and
on the date the costs were incurred if after then, and stopping on December 16, 2014.
March 20, 2015 RICHARD D. SLETTEN, CLERK
Date
s/L. Brennan
(By) L. Brennan, Deputy Clerk
Case 0:12-cv-03175-PAM-JSM Document 163 Filed 03/20/15 Page 1 of 1
MAY 19 2015 p 69
UNITED STATES DISTRICT COURT
District of Minnesota
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Building and U.S. Courthouse
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Building and U.S.
Courthouse
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(218) 529-3500
Edward J. Devitt U.S.
Courthouse and Federal
Building
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Suite 212
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(218) 739-5758
CIVIL NOTICE
The appeal filing fee is $505.00. If you are indigent, you can apply for leave to proceed in forma
pauperis, ("IFP").
The purpose of this notice is to summarize the time limits for filing with the District Court Clerk's Office
a Notice of Appeal to the Eighth Circuit Court of Appeals from a final decision of the District Court in a
civil case.
This is a summary only. For specific information on the time limits for filing a Notice of
Appeal, review the applicable federal civil and appellate procedure rules and statutes.
Rule 4(a) of the Federal Rules of Appellate Procedure (Fed. R. App. P.) requires that a Notice of Appeal
be filed within:
1. Thirty days (60 days if the United States is a party) after the date of "entry of the
judgment or order appealed from;" or
2. Thirty days (60 days if the United States is a party) after the date of entry of an order
denying a timely motion for a new trial under Fed. R. Civ. P. 59; or
3. Thirty days (60 days if the United States is a party) after the date of entry of an order
granting or denying a timely motion for judgment under Fed. R. Civ. P. 50(b), to amend
or make additional findings of fact under Fed. R. Civ. P. 52(b), and/or to alter or amend
the judgment under Fed. R. Civ. P. 59; or
4. Fourteen days after the date on which a previously timely Notice of Appeal was filed.
If a Notice of Appeal is not timely filed, a party in a civil case can move the District Court pursuant to
Fed. R. App. P. 4(a)(5) to extend the time for filing a Notice of Appeal. This motion must be filed no
later than 30 days after the period for filing a Notice of Appeal expires. If the motion is filed after the
period for filing a Notice of Appeal expires, the party bringing the motion must give the opposing parties
notice of it. The District Court may grant the motion, but only if excusable neglect or good cause is
shown for failing to file a timely Notice of Appeal.
Case 0:12-cv-03175-PAM-JSM Document 163-1 Filed 03/20/15 Page 1 of 1
MAY 19 2015 p 70
{File: 00976063.DOCX / }
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
________________________________________________________________________
U.S. BANCORP, a Delaware corporation,
and U.S. BANK NATIONAL
ASSOCIATION, a national banking
association,
Plaintiffs,
Case No.: 12-cv-03175-PAM-JSM
vs.
INDIAN HARBOR INSURANCE
COMPANY, a North Dakota corporation,
and ACE AMERICAN INSURANCE
COMPANY, a Pennsylvania corporation,
Defendants.
NOTICE OF APPEAL
________________________________________________________________________
Notice is hereby given that ACE American Insurance Company, defendant in the
above-named case, hereby appeals to the United States Court of Appeals for the Eighth
Circuit from the judgment entered on December 16, 2014 (Dkt. #149) and the amended
judgment entered on March 20, 2015 (Dkt. #163), and from each and every part thereof,
including, but not limited to, the Memorandum and Order denying ACE American
Insurance Company’s Motion for J udgment on the Pleadings, entered on J uly 3, 2014
(Dkt. #105); the Order granting Plaintiffs’ Motion for Summary J udgment, entered on
December 16, 2014 (Dkt. #148); and the Memorandum and Order granting Plaintiffs’
Motion to Amend the J udgment, entered on March 19, 2015 (Dkt. #162).
Case 0:12-cv-03175-PAM-JSM Document 176 Filed 05/19/15 Page 1 of 2
MAY 19 2015 p 71
2
Dated: May 19, 2015
By: /s/ Tiffany S. Saltzman-J ones
WALKER WILCOX MATOUSEK LLP
Edward P. Gibbons
Tiffany S. Saltzman-J ones
1 N. Franklin Street, Suite 3200
Chicago, IL 60606
Tel: 312.244.6744
egibbons@wwmlawyers.com
tsj@wwmlawyers.com
and
FORD & HARRISON LLP
Alec J . Beck, (Bar#201133)
225 South Sixth St., Suite 3150
Minneapolis, MN 55402
Tel: 612.486.1629
abeck@fordharrison.com
Attorneys for Defendant ACE American
Insurance Company
Case 0:12-cv-03175-PAM-JSM Document 176 Filed 05/19/15 Page 2 of 2
MAY 19 2015 p 72
U.S. BANK NATIONAL ASSOCIATION and U.S.
BANCORP,
ACE American Insurance Company appeals Irom the judgment entered on December 16, 2014 (Dkt. # 149) and the amended
judgment entered on March 20, 2015 (Dkt. # 163), and Irom each and every part thereoI, including, but not limited to, the
Memorandum and Order denying ACE American Insurance Company`s Motion Ior Judgment on the Pleadings, entered on July 3,
2014 (Dkt. # 105); the Order granting PlaintiIIs` Motion Ior Summary Judgment, entered on December 16, 2014 (Dkt. # 148); and
the Memorandum and Order granting PlaintiIIs` Motion to Amend the Judgment, entered on March 19, 2015 (Dkt. #162).
Appellees,
INDIAN HARBOR INSURANCE COMPANY
and ACE AMERICAN INSURANCE
COMPANY,
Appellants.
William G. Passannante
Marshall Gilinsky
ANDERSON KILL, P.C.
1251 Avenue oI the Americas
New York, NY 10020
Tel: (212) 278-1000
For Ace American Insurance Company:
Edward P. Gibbons
TiIIany Saltzman-Jones
WALKER WILCOX MATOUSEK, LLP
One North Franklin, Suite 3200
Chicago, IL 60606
(312) 244-6700
X
X
X
Edward P. Gibbons 05/19/15
Case 0:12-cv-03175-PAM-JSM Document 176-1 Filed 05/19/15 Page 1 of 1
MAY 19 2015 p 73
UNITED STATES DISTRICT COURT
District of Minnesota
Richard D. Sletten, Clerk
Tricia M. Pepin, Chief Deputy Clerk
Warren E. Burger Federal
Building and U.S. Courthouse
316 North Robert Street, Suite 100
St. Paul, MN 55101
(651) 848-1100
U.S. Courthouse
300 South Fourth Street
Suite 202
Minneapolis, MN 55415
(612) 664-5000
Gerald W. Heaney Federal
Building and U.S. Courthouse
and Customhouse
515 West First Street, Suite 417
Duluth, MN 55802
(218) 529-3500
Edward J. Devitt U.S. Courthouse
and Federal Building
118 South Mill Street, Suite 212
Fergus Falls, MN 56537
(218) 739-5758
TRANSMITTAL OF APPEAL
Date: May 19, 2015
To: U.S. COURT OF APPEALS, 8TH CIRCUIT
From: L. Brennan, U.S. District Court-Minnesota
In Re: District Court Case No.: 12-cv-03175-PAM-J SM
Eighth Circuit Case No.: 15-01691
Case Title: U.S. Bank National Association et al v. Indian Harbor Insurance Company et
al
The statutory filing fee has:
☒been paid, receipt number: 0864-4429661
☐not been paid as of Add date
IFP ☐is ☐is not pending
☐been waived because:
☐Application for IFP granted ☐USA filed appeal
Length of Trial: N/A days
Was a court reporter utilized? ☒Yes ☐No
If yes, please identify the court reporter:
Name: Carla Bebault; Ron Moen
Address: Add street address
Add street address
Add city, state and zip
Phone: (651) 848-1220
Case 0:12-cv-03175-PAM-JSM Document 178 Filed 05/19/15 Page 1 of 2
MAY 19 2015 p 74
Original file(s) consisting of 0 file(s) and 0 expandables.
Transcript(s):
Volume Date Proceeding
1 03/11/2014 Motions Hearing held 02/28/2014, Dkt #56
1 04/01/2014 Motions Hearing held 03/26/2014, Dkt #90
1 04/21/2015 Motions Hearing held 06/18/2014, Dkt #173
1 04/21/2015 Motions Hearing held 10/23/2014, Dkt #175
Case 0:12-cv-03175-PAM-JSM Document 178 Filed 05/19/15 Page 2 of 2
MAY 19 2015 p 75

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