## In the



# U n ited S ta tes Co urt o f Ap p ea ls

F o rth eS e v e n th C ir cu it
N o. 12
- 1784 N ATI ONW IDE I NSURANCE C OMPAN Y, P la intif f-A pp ellee, v. C ENTRAL L ABO RERS ’ P EN S I ON F UND , et a l., D efend a nts-A pp ella nts. Appeal from the United States District Court fo r the S outhernDi stricto f Illino is. No . 11 CV 00618

—J. Phil Gilbert, Judge .
A RG UE D N OVE MBE R 2, 2012

— D ECI DE D J AN UA RY 11, 2013

Befo reM A NI ON, W I L L I A MS, a nd H A MI L T ON, C ircu it Judges. M ANI ON, C ircu it Judge. W hi l e e m plo yed atan a ccounti ng fi rm , J eanne H entz had a co m pact di sc b elo n gin g t o th e firm st ole nfrom h er p er so n a l ve h icle whi chwas pa r k ed athe rho us e. Th e compac t di scc o ntaine d confi denti ali nfo rm ati on be l onging to so m e o f h er em p loy er ’s c lien ts . Th os e c lien ts su ed H en tz in I l lin ois st ate co urt f orcr edi t m oni tor i ng and i nsurance ex pen ses i nc ur r ed to mit i g at e po te nt i almis us e o fthe2 N o. 12
- 1784 sto l en info rm ati on. S he te nd er ed the defe ns e ofthe sta te ac t i o nt o h e rh o me o wn e r ’ s i n s u r a n c e c o mpa n y, Na ti o nwi de I ns ur ance Co. S ee k i nga de cl ar at i o n tha t i t ha d no d u ty u n d e rH e n t z ’ s i n s u r a n c e p o l i c y t o d e fe n d o ri n d e mni fy her, N ati onw i de fi l ed sui t in federa lco urt aga i nst H en tz a nd th e c l i en ts s ee k i ngt o ho l d he rl i ab l e f o rthe se cu rity ex p en ses. Th e d istri ct cou rt grante d sum m ary j u d gm en t in fav or of N at ion w id e. T h e clien t s a p p ea l. We a ffi r m.
I . F a c t ua l B a c kg r o und H entz i s a n ac c ou ntant e m plo yed byKevi n W
. Brag ee, CP A , L LC ( the “ Fi rm ”)
. The Centr alLabor er s’ Pensi on Fu nd , Ce nt ral L aborers’ W elf are Fu nd , and C en tral Lab orer s’ A nn uity F und ( co l l ec ti ve l y, the “ F unds ”) hi r ed th e F i r m t o pe r f o r m a cc o unt i ngand a udi tings er vi ce s. To p er for m tho se ser vi ces, the Fi rm poss ess ed a c om pact di scc o nt aini ngc o nfi den ti ala nd pr o te ct ed i nf o r m at i o n, i nclu d in g the nam es, bi rth dates, and So ci alS ecuri ty num ber s o fapproxi m ate l y 3 0, 000 i nd i vi du alpa rt i ci pants an d be n ef i c i a r ies of th e F u n d s. T h e F irm ag re ed in w rit in g t o e n su re th a t i t s em p loy ee s a n d ag en ts w ou ld safeguar d the i nfo rm ati on on the com pact disc
. Thus, H entz, w ho cam e i nto posse ssi on of the c om pact di sc, had a duty t o safeguar d the co nfi denti ali nfo rm ati on o n the di sc a s a co nd i ti on o fherem plo ym ent. At the e nd o fa da y a t wor k, Hentz p laced the com pact di sc in a l apt op , p u t the l aptop i n herper sonal veh icl e, an d pa rked i n th e op en at her reside nc e. U nfortunately, the la p top co ntai ni ng the co m pact di sc wasN o. 12
- 1784 3

A t o ral arg u m en t, cou nsel for th e F u nd s ind icated tha t effor ts 1 t o r ec ove r the i r s ec ur i t y e xpe ns es fro m the Fi rm ar e pen di ng. sto l en fro m H entz’ s vehi cl e. In or der t o m i ti gat e pot enti al mi s us e o fthe c o nfi den t i a li nfo r mat i o n, the F un ds incu rred near ly $20 0,000 i n cred it m onitoring an d i ns urance e xpenses. See kin g to re coup the cos t o fthes e se c u rit y e ffor ts , th e F u n d s b ro u gh t a st at e a c tio nin Illino is a ga in stH en tz alleg in g th atsh e n eg l i ge n tly bre ached dutie s s he o w ed to the Funds. H en tz te nd er ed 1 the defense ofthe sta te acti on t o N ati onw i de, wh i ch had w ritten h er hom eow ne r’s ins ura nc e po li cy (the “P oli cy”). Bel i ev i ngtha t t he Po l i cydi d no t co ve rthe the ft o fthe com pact di sc, N ati onw i de br ought a federa ldi ver si ty acti on aga inst Hentz and the Funds seek i ng a decl ar ati on thati t had no du ty to defe nd o r i nd em ni fy Hentz. N ati onw i de ar gued that H entz’ s cl aim w as not cove re d because the Policy does notco ver“ ‘ [ p]r oper ty dam age ’ to p rop erty rent ed to, occu p ied o r u s e d by or in th e care ofthe ‘ i ns ur e d’
. ” Na t i o nwi de a l s o r e l i e d u po n l a ngua ge i n the Pol i cy sta ti ng tha t i t doe s no t c ov er“ ‘ proper ty d am ag e’ a r i s i n g ou t o f or in co n n ec tio nw ith a ‘b u siness’ co nd ucted fro m an ‘ i nsured locati on’ o r engag ed i n by an ‘ i nsure d’, wh ethero r not the ‘ busi ness’ i s o w ned o ro per at ed byan ‘ i ns ur ed’ ore m pl o y s an‘ i ns ur ed’
. ” The P olic y p ro vid es th atth is lat te r ex c lu sio n “a p p lies bu t is not l im ited to a n ac t or om issi on, regard less ofi ts na tu re o rc i r c ums t a nc e s , i nv o l v i nga s e r v i c e o r du ty r e nd e r e d, prom i sed, o w ed, o r i m p lied to be pro vi ded bec ause of th e n at u re of th e ‘b u sin es s’.”4 N o. 12
- 1784 Nat i o nwi de a nd the F un ds fi l e d c r o s s - mot i o ns f or su m m ary j ud gm ent. The di str i ct c ourtco ncl ud ed that the Po l i cy’ s “i n car e o f ” e xcl usi on a pp l i ed and, co nsequentl y, that N ati onw i de had no du ty to defe nd H entz aga i nst the Funds’ st ate act i on o r to i nd em ni fy her f or any result i ng l i abi l i ty. Thus, the dist ri ct c ourtgr anted N at i o nwi de’ s m o ti o n fo rs um m ary j udg m en t an d d en ied th e F u n d s’ m ot ion . Th e F u n d s a p p ea l.
I I . Discussi on T h e F u n d s c on te n d t h a t t h e d ist ric t c ou rterr ed in fi nd i ngtha tthe P o l i c y ’ s “ i n c a r e o f ” e xc l us i o n a pp l i e d. The Fu n ds ar gue furtherthatthe Pol i cy’ s “ busi ness” excl usi on

— w hi ch the dist ri ct c ourtdi d not a dd re ss

— do es no t apply e i th er . The pa r ti es a gree th atthe s ubs ta nti ve l aw o fI l l i noi s g ove rns thi s di ver si ty acti on. “Un der Illin o i s law , th e in te rp re ta tio nof an ins u ra n c e p olic y is a quest i on o fl aw thati s pro perl y deci ded byway of sum m ar y j ud gm ent. ” BA SF AG v. G re atAm
. As s ur . Co. , 52 2 F. 3d 813, 81 8- 19 ( 7th Ci r. 20 08) ( ci ti ng C rum & F o rster M anage rs Corp. v. Re s ol ut i on Tru s tCorp. , 62 0 N
. E.2 d 1073, 1077( I ll
. 1993)). Th us , w e review t he district cou rt’s dec i si o n deno vo . BA SF, 5 22 F
. 3d at8 19
. In de te r m i ni ng w hetherN ati onw i de has a d uty to defe nd H entz, w e m ay on ly c on sid er th e a lleg at ion s in th e s t a t e c om p lain t in c on c er t w ith th e p ro vis ion s o ft h e P olic y. Id. ; U .S. Fid . & Guar
. Co. v. Wi l ki n Ins ulatio n Co. , 57 8 N
. E.2 d 926, 93 0 ( I l l
. 19 91 )
. W e wi l l fi nd a duty to defen d “[ i ] f th e un d erlyin g c om p lain t[] a lleg e[s ] fac ts w ith inor p ot en tia lly w i thi n pol i cy c ov er ag e . . . . ” Wil kin , 57 8 N
. E.2 d at 9 30.N o. 12
- 1784 5

T he se tw o e l e m en ts hav e b een ap p lied b y Illinois co u rts 2 in c ase s int erpret ing “i n care of ” ex cepti ons i n bu si ness i nsuran ce p olicies ra the r tha n h om eo w ne r’ s in su r a nc e p olicies. W e re cognize that the s econd ele m ent, thatthe l ostor s tol en pr op e r t y w a s “ a n e c e s s a r y e l e me n to fth e w o r k p e r f o r me d by the in su red, ” fit s w el l w ith a busines s polic y bu t m ight be an od d fi t un der a hom eow ner’ s polic y. In this cas e, how ever, bec aus e both pa rt i es ha ve as s um ed the e l em en tappl i es an d the elem en t d oe s no t affect the ou tcom e, w e ha v e also assu m ed it ap p lies. I fth e r e l e v a n tp o l i c y l a n g u a g e i s c l e a ra n d u n a mbi guous, it m ust be g i ven i ts pla i n and or dinar y m eani ng. Id. But al l“doubts and am bi gui ti es m ust be r eso l ved i n f avo r ofthe i nsured. ” Id. U nd er Ill i no i s l aw, a n “ i n c ar e o f ” ex cl us i o n l i k e th e one i n the Polic y ap pli es onl y i ftwo el em ents ar e m et: the pr oper ty l osto r sto l en was ( 1) within the excl usi ve po ss es so r y c o nt r o lo fthe i ns ur ed atthe t i m e o fl o ss ; a nd ( 2) a ne ce ss ary ele m en t o fthe wor kpe r f o r m ed bythe in su re d
. See Stew a rt Wa rner C o rp . v . B urn s Int’l Sec. Serv s., Inc. , 527F.2d 10 25 , 102 9 (7 th C ir. 19 75 ); Bola no w s ki v. M cK inn ey, 58 1 N
. E.2 d 345, 34 8 ( I l l
. A pp . Ct. 19 91) (coll ectin g cases ). 2 The sta te com pla i nt al l ege d that Hentz, pursuant to her em plo ym ent a t the Fi rm , cam e into posse ssi on o f th e c om pac t di sca nd ha d a duty t o s afegua r d the c o nfi denti ali nfo rm ati on tha t it contained. H entz’ s pos ses si o n o fthe c o m pac t disc a nd duty t o s afegua r d the c o nfi de nt i a li n f o r ma t i o na mo u n tt o th e “ e x e r c i s e [ o f ] s o me ty pe ofposs ess or y c ontr olo verthe” co m pact di sc. See6 N o. 12
- 1784

I n Bo l anow sk i, w hich is d iscussed exten sive ly b y the F u nd s, 3 the p lain tiffs w ere m u sicia n s w ho ke p t their in stru m en ts at a bar w h er e they regularl y perf orm ed. W hen a fir e dest royed the ins tr u m ents , the m usi ci ans s ucces sfull y sued the bar, w hich then so u g ht to reco v er th e jud g m en t am ou nt from its insu rer . T h e insu rer a rg u ed tha t the in sur an ce p olicy ’ s “in car e o f” exclu sion ap p lied
. T he Illinois ap p ellate co u rt he ld thatthe i ns ur anc e pol i c y’ s “i n c ar e of” e xclu s i on di d not ap p ly b eca u se th e r e w as no ev id en ce tha t the “d efend an ts were ac c or ded the r i g ht or duty t o e xe rc i s e s om e t ype of posse ssory cont rol over the [ prop erty]. ” 581 N
. E.2d at 349. Bol anow sk id o e s n o ta p p l y h e r e b e c a u s e th e s t a t e c o m pl ai nt c l ea rl y a llege s thatHent z h ad a dut y t o s afeg uar d the c onfid en tia l in fo rm a tio n o n th e c o m p a ct d isc
. S ee L i berty M u t. Ins. C o. v. Z uri ch Ins. C o. , 930 N
. E.2d 573, 578 ( Il l. A pp . Ct. 2010) ( “ W e fi nd B o l a n o w sk i d isting u isha b le b eca u se the d efend an ts the r e di d n ota s s ume a ny du t y t o pr ot e c tthe pl aint if f s ’ pr op er ty .”). Bolan owsk i, 58 1 N
. E.2 d at 3 49; see also Li b e r ty M ut . Ins . Co. 3 v. Zur i ch Ins . Co. , 93 0 N
. E.2 d 5 73 , 5 78 ( I l l
. A pp . Ct. 20 10) ( “T he pa ss i ve duty of g ua r di ngthe pr o per tyg av e [ th e i nsured] car e, custo dy orco ntro lo fthe proper ty, ev en w i thout any dir ect conta ct w i th the sto re d g oo ds. ”). T h at posse sso ryc ontrolbec am e e xcl usi ve, atl eas t, wh en H en tz p l a c ed th e c om p ac t d isc in h er p er so n al v eh icle that she par ked atherr esi den c e. Se eIns . Co. of N
. Am
. v. Adki s s on , 4 59 N. E. 2d 31 0, 3 12 ( I l l
. App. Ct. 19 84 ) ( fi ndi ng ex cl us i ve po ss es so r y c o nt r o lo ve rpr o per tywheni ns u r e d “c los ed th e t ra iler d oo r” ); Li b e r ty M ut . Ins . Co. , 9 30 N
. E.2 d at 5 76- 78 ( hol ding hote l ’ s duty to safeguar d guests ’ proper ty l oca ted i n a wall s afe w i thi n the guest s’ hot elN o. 12
- 1784 7

T he Fu nd s con ten d tha t it i s un clear w he the r H en tz’s p osses- 4 s i on was e xc l us i ve bec aus e the s t at e c om pl aint d oe s no t addre ss w he the r othe rs ha d ac c es s t o h erve hi c l e. W e do no t fi nd thi s ar gum en tpe rs uas i ve. The r el eva ntin qu iry i s no t w hetherH entz had ex cl usi ve access t o the c om pac tdi s c , but w hetherH entz had ex cl usi ve c o n t r o l over the com pact dis c at the ti m e ofthe the ft. S ee C aiss on C orp. v. Hom e Indem. C orp. , 502 N
. E. 2d 1 16 8, 11 70 ( I l l
. App. Ct
. 19 86 )
. Eveni fothe rs ha d the pow er, w ith or w ithout H entz’ s perm is si on, to a cc es s her v eh icle w hile it w as p ark ed at he r resid en ce, such access wou l d n ota m ou ntt o “ the r i gh to r du t y t o e x e r c i s e s ome typ e o f p o s s es so ry co n tr o l o v er th e” co m p a ct d isc
. Bol anow sk i, 5 8 1 N .E .2d at 34 9 ; cf

. Li ber ty M ut. Ins. C o. , 930 N
. E.2d at 577- 78. ro om estab l i s he s t he e xc l us i v e - po s ses sor y- contr ol ele m en t). T h u s, th e c om p ac t d isc w as st ole nw h ile it

4 w as w ith inH en tz ’s e x c l u siv e p os se ss or y c on tr ol. See Ess ex Ins . Co. v. Wr ight, 8 6 2 N. E. 2 d 1 194, 1197( I l l
. App
. Ct
. 2 0 0 7 ) ( “ ‘ [ I ] f the i ns ur e d ha s po s s e s s o r y c o nt ro l at the t i m e the pro pertyi s d am ag ed, the excl usi on cl ause wi l la ppl y . ’ ” ( quo tingCount ry M ut. Ins . Co. v. Wal dm an M e r ca nt i l eCo. , 430 N
. E
. 2d 606, 609 (I ll
. A p p . Ct
. 1981))). I n thei r re plybr i ef, th e F und s a dd i ti onal l y a rgue that the a l l ega ti ons i n the sta te com pla i nt f ai l ed to es tablish whet h e rth e c o mpa c td i s c wa s a n e c e s s a r y e l e me nt ofH entz’ s work
. “[ I ] t i s wel les tabl i shed that ar gum ents ra ise d for th e firs t t im e in a re p ly b ri e f are w aiv ed .” Broad dus v. Sh i e l ds , 665 F.3d 84 6, 86 0 (7 th C ir. 2 0 1 1 ) . In their openingbr i ef, the Funds m er el y c i te the tw oel em ent t estas the contr ol l i ng l ega lst anda rd . B ut nowher e in the i ro pen i ngb r i efdo the y a r g ue tha t th e8 N o. 12
- 1784

The Funds s ee k t o e xc us e the i r f ai l ur e t o r ai s e thi s ar gum en t 5 b eca u se “ [i]t i s the b u rd en of the insu rer to affirm ativ ely prov e that an exc lus ion in an ins urance pol ic y ap plie s. ” U n i te d Nat’ l Ins. C o. v. FaureBros
. C orp. , 94 9 N .E.2d 118 5, 119 1 (Ill. A p p . C t. 20 11 )
. Thi s ar gum en tc om es t oo l at e and l ac ks m eri t. Al tho ug h i t i s the duty of the i ns ur e r t o pr ov e tha t an exclu sion ap p lies, on ap p eal th e ap p e l l a nts m u st tim ely raise allargum ents thatthe dist ri ctcourt erre d in fi n d in g that an i ns ur erha s m eti t s bur den. sta te com pla i nt does notes tabl i sh t hat the co m pact di sc wa s a n e c e s s a r y e l e men to fHe nt z ’ s wo r k
. N ordo they cl ai m thatthe dist ri ct c ourt ’ s ul ti m ate di sposi ti on w as er ro neous because the seco n d el em ent was notsa ti sfi ed. The pe r tine nts ec ti o n o fthe F unds ’ o pen i ng bri efanal yze s on l y the fi rs t e l em ent, thati s, wh ether H en tz ha d e xc l us i ve po ss es sor y c o nt r o lo ve rthe co m pac t di scwheni t was s to l en . Co ns eque nt l y, the F unds wai ve d the i ra r g um en t co nc erni ng th e s ec o nd el em ent. 5 I n any eve nt, the Funds’ a rgum ent f ai ls on t h e m er i ts because the al l ega ti ons i n the sta te com pla i nt es ta bl i sh th at th e com p act d isc w as a ne c e s sary p art of H en tz’s w or k. The sta te com pla i nt av er s that Hentz, as an a cco unt ant at th e F i r m , po ss es se d the c o m pac t di sca nd had a duty t o safeguar d the co nfid en ti ali nfo rm ati on conta i ned on i t. T h e M od el Code o fCondu ct o fthe N ati onalA sso ci ati on o fS tat e Boar ds ofA ccountancysa ys tha tma i nt a i ning“ c o nfi de nt i a l i ty i s v i t a lt o the p r o per p e rfo rm an c e o f [an ac c ou n ta n t’s ] p ro fes sio n al a c tiv itie s.” Na t’l A ss’n o

f Sta te B d s . o

f A cco un ta ncy, U nifo rmN o. 12
- 1784 9

T he F u nd s p oin t ou t that th e state co m p lain t d oe s no t spe cifi- 6 cally alleg e tha t H en tz p erfo rm ed acco u ntin g w or k on b eh alf of the F u nd s. W e find this om ission i m m ater ial b eca u se H en tz’s d u t y to safeg u ard con fiden tial inform atio n ex ten d s to alls u ch inf orm ati on that com es i nto her posse ss ion as an a c c ou nt a nt a t the Fir m

— not m erel y to c onfi dential i nf orm ati on that rel ates to cl ie nt m att ers as si gned to her. T he Fu nd s a r g u e t ha t the exc lusio n is am b igu ou s be cau se 7 it cou ld b e inter p reted on ly to ap p ly w hile H en tz is activ ely (co n tin u ed ...) A cco un ta n cy A ct M o del R ules , Ar t . 1 0 , P r i nc i pl e V I( 6 th e d. Ju l y 2 9, 20 11 ) (“A lice n se e h as an ob liga tio nto m ain ta in an d r es p ec t th e c on fid en tia lity o f in for m at ion o b ta in ed in th e p er for m an c e o f all p ro fes sio n al a c tiv it i e s .”); see also Ill. A d m i n . C od e t it. 68 , § 14 30 .30 10 ; A m . Inst. o f C ertified Pub
. Ac c ou n tants , Co deo f Prof e s s i on al Co n du c ta n d Byl aws 17 99 , Rul e 30 1 ( J une 1, 20 11 )
. Bec au se th e han d l i ng an d care of con fi d en tial inform ation is vi tal to H e nt z’s wor ka s ana cc o unt an t, the c o m pac t di scc o nt aini ng su c hinfo rm at ion is a n ec es s a r y , rat h er th an inc id en ta l, ele m en t o f h er ord in ar y e m p lo ym en t a c tiv itie s. See St e wartWar ne rCorp. , 52 7 F
. 2d at 1030
. 6 I n ad d iti on to th e ap p li cation of th e Policy’ s “ in care of” e xcl usi on, the Pol i cy’ s “ busi ness” excl usi on a l so pr ec l ude s co ve r ag e i n thi s ca se . As n o te d abo ve , the “busi ness” excl usi on does notco ver“ ‘ proper ty dam age ’ ar i singou t ofo ri n c o nne ct i o n wi tha ‘ bus i ne ss ’
. . . e nga ge d in b y a n‘ins u re d ’, w h et h er or n otth e ‘ b u s i n es s’ is o wned o ro per ated by an‘ i ns ur ed’ o re m pl o y s an‘ i nsure d’. ” The excl usi on “appli es but i s not l i m ite d to an

710 N o. 12
- 1784

(
. . . c on t i nu e d) 7 en gage d i n w ork a c t i vi t i es . Thi s al l eg ed a m bi gui t y doe s no t he l p t he Fu nd s be cau se H en tz’s d u ty to safegu ard clients’ con fiden tial inform atio n in her p o ss ession d oe s no t ev ap or ate w he n she is no t activ ely p erform ing oth er ac cou ntin g activ ities. act oro m i ssi on, r ega rdl ess o fi ts nature o r ci rcum sta nces, i nv o l v i nga s e r v i c e o rdu ty r e nd e r e d, p r o mi s e d, o we d, o ri m pl i ed to be pr o vi ded be ca us e o fthe na tu r e o fthe
‘ busi ness’
. ” The F und s do not d isp u te that the F i rm i s a “b us i ne ss ” whi che m pl o y s H en tz , a nd tha t, a cc o r di ng to the state com p lai nt, H en tz ha d a du ty to safegu ard the c onfi denti ali nfo rm ati on o n the com pact di sc b ecause sh e w as an accou nt an t em p loyed by the Firm
. H en tz’s f ai l ure to safeguar d the co m pact di sc was an om i ssi on amoun tingt o a b r ea cho ftha t duty . The re f o r e, the P olic y’s “b u sin es s” ex c lu sio nap p lies
. See All s t at eIns
. Co. v. M athis , 7 06 N. E. 2d 89 3, 8 94 ( I l l
. App. Ct. 1 99 9) ( ho l di ng that a “ busi ness” excl usi on a pp l i ed w h er e th e insured f ai l ed to fulfi l la du ty dir ectly c or re l ate d to provi ding daycare services ). Ba s e d o n o urr e s o l ut i o n o fthe s e i s sues, we c o nc l ud e th at N ati onw i de has no duty t o defe nd H entz aga i nst the F und s’ st ate act i on. A cco rd ingl y, we decl i ne to add re ss the othe r ar gum ents advanced by the par ti es r el at i ngt o tha t que st i o n. Fin ally , N a t i on w id e’s d u ty to ind em n ify is o n ly t r i g g e r e d i fH e n t z i s d e t e r mi ne d t o b e l i ab l e f o rd a mag e s in t h e u n d er lyin g a c tio n . Bit um i nou s Cas
. Corp. v. Ful ke rs on , 571 N
. E
. 2d 256, 260 ( Ill
. A p p . Ct
. 1991).N o. 12
- 1784 11 Because Nati onw i de owes n o du ty to defe nd herag ai nst th e Fu nd s’ st ate act i on, N ati onw i de owes no du ty to in d em n ify h er for liab ility st em m in g fro m t h atsu it. Cru m , 620 N. E. 2 d a t 1 0 8 1 ( “ Cl e a r l y, whe r e the r e i s no duty to d efend , there w il l be n o du ty to i nd em nify .
. . . ”).

I I I . Concl usio n Be c a us e we h o l d tha tthe “ i n c a r e o f ” exclusi o n a nd , alternat ively, the “b us iness” exc lusion from H en tz’s i nsurance pol i cy apply, N at ion w i de has no duty t o defe nd H en tz aga i nst the Funds’ st ate act i on. Conseq u en tly, N ati onw i de has no duty t o i nd em ni fy Hentz sh o ul d tha t st at e ac ti o n go a gains t he r . The r efo r e, the dist ri ct c ourt ’ s j ud gm ent i s A FFI RMED .

1- 11- 13