UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 01-20106

PARKANS INTERNATIONAL LLC,

Plaintiff-Counter Defendant-Appellee,

VERSUS

ZURICH INSURANCE CO.

Defendant-Counter Claimant-Appellant.

Appeal from the United States District Court

for the Southern District of Texas

August 5, 2002

Before DUHÉ, BARKSDALE, and DENNIS, Circuit Judges.

DUHÉ, Circuit Judge:

Defendant Zurich Insurance Company issued plaintiff Parkans

International, L.L.C., a Commercial Package Policy of primary

insurance including crime coverage, and an excess Custom Cover

Policy (“CCP”). After suffering a loss caused by the fraud of a

third party, Parkans submitted a claim under the crime coverage of

the primary policy. Zurich denied coverage, and Parkans sued under

both the primary policy and the CCP seeking coverage and damages.

After a jury trial, the district court entered judgment for

Parkans. For the following reasons, we reverse and render.
2

I. BACKGROUND AND PROCEDURAL HISTORY

Parkans agreed to purchase scrap metal from Adusa Export,

promising payment with an irrevocable letter of credit to be issued

by a bank of Parkans’ choice and confirmed by a bank of Adusa’s

choice. Parkans chose Marine Midland which issued the letter of

credit. Payment would occur at sight upon presentation of certain

non-negotiable documents. Using fraudulent documents, Adusa

obtained payment, despite never having shipped the scrap metal.

Wells Fargo (the confirming bank) paid Adusa under the letter of

credit, and Marine Midland withdrew funds from Parkans’ account to

pay Wells Fargo. Parkans, having sustained almost a million-dollar

loss because of the fraud, notified its insurance broker, who said

the loss was not covered. The perpetrators remain at large.

After filing a claim for indemnity under the primary policy,

Parkans brought this action alleging that Zurich breached its

contracts by failing to indemnify Parkans under both the primary

policy and the CCP. Parkans also asked for tort damages against

Zurich, alleging bad faith and violations of the Texas Insurance

Code and Deceptive Trade Practices Act (DTPA). Zurich denied

coverage under both policies and denied any wrongdoing. 

Parkans moved for partial summary judgment on the primary

policy, arguing that the crime coverage for forgery applied.

Zurich moved for summary judgment on both policies and on the

damage claims. The court granted Parkans’ motion finding coverage

under the primary policy and denied Zurich’s motion. 
3

The remaining issues went to trial by jury. After having

been instructed that the loss was covered under the primary policy

and that Zurich’s failure to pay the claim was a breach of the

primary policy, the jury found that Zurich failed to comply with

the CCP. The jury also found that Zurich knowingly engaged in

unfair and deceptive practices. The jury awarded $1.34 million for

breach of contract, $1.29 million on the tort claims, and $350,000

for attorneys’ fees at trial. The district court entered final

judgment against Zurich only on the breach of contract award and

attorneys’ fees, awarding interest and statutory damages as well.

Zurich appeals.

II. PRIMARY COVERAGE AND THE PARKANS LOSS

The crime coverage at issue under the primary policy provides:

We will pay for loss involving Covered Instruments resulting

directly from the Covered Causes of Loss.

1. Covered Instruments: Checks, drafts, promissory notes,

or similar written promises, orders or directions to pay

a sum certain in “money” that are: 

a. Made or drawn by or drawn upon [the insured]; 

b. Made or drawn by one acting as [the insured’s] agent;

or that are purported to have been so made or drawn. 

2. Covered Causes Of Loss: Forgery or alteration of, on or

in a Covered Instrument. 

Finding coverage under the foregoing provisions, the district

court determined on summary judgment that Adusa obtained payment on

the letter of credit by presenting “forged documents” to Wells

Fargo, including forged certificates and a forged bill of lading.
1 This Court will review a denied motion for summary judgment

(as an exception to the general rule) if the district court granted

the opposing party's summary judgment motion. See, e.g., Ranger

Ins. Co. v. Estate of Mijne, 991 F.2d 240, 241 (5th Cir. 1993). In

this case both Parkans and Zurich moved for summary judgment on the

primary policy, though Parkans’ motion was for partial summary

judgment on that single issue and Zurich’s was more extensive.

Thus we will review the cross motions on coverage under the primary

policy de novo, and review Zurich’s remaining assignments of error

on a post-trial basis. Cf. Black v. J.I. Case Co., Inc., 22 F.3d

568, 570 n.3 (5th Cir. 1994) (no review of pretrial denial of

summary judgment, with certain exceptions, if final adverse

judgment follows full trial on the merits), cert. denied, 513 U.S.

1017, 115 S. Ct. 579, 130 L. Ed. 2d 494 (1994).

4

This court reviews de novo the trial court’s decision on summary

judgment. Mid-Continent Cas. Co. v. Chevron Pipeline Co., 205 F.3d

222, 225 (5th Cir. 2000).1

The summary judgment evidence establishes that the irrevocable

letter of credit was payable at sight upon the presentation of

certain documents, namely, a commercial invoice, a packing list, a

certificate of weight, a quality and weight certificate from a

qualified surveying firm, on board bills of lading issued to the

order of Marine Midland by the shipper, and Adusa’s signed

statement certifying that one set of non-negotiable documents was

sent by courier to Parkans immediately after shipment. Adusa

presented documents purporting to be those documents required by

the letter of credit, most on its own letterhead, with an

inspection quality and weight certificate ostensibly from Alfred H.

Knight (a surveying firm) and bills of lading ostensibly from

Crowley American Transport (a shipping company), although all the

documents were fraudulent. 
5

Zurich contends that even if forgeries occurred, they were not

covered because they were not forgeries of “covered instruments.”

To be a “covered instrument,” a document must be a check, draft,

promissory note, or similar written promise, order or direction to

pay “Made or drawn by or drawn upon [Parkans]; Made or drawn by one

acting as [Parkans’] agent; or [] purported to have been so made or

drawn.” Even if we view the letter of credit as a “similar . . .

promise[] to pay,” it cannot be a “covered instrument” because it

was neither made by, drawn by, or drawn upon Parkans or its agent,

nor purported to have been so made or drawn. 

The district court recognized that Parkans “may not have been

the ‘technical’ drawee in the transaction,” but treated Parkans as

such simply because it was the party who “ultimately suffered the

loss.” The district court quoted from and embraced the reasoning

of Omnisource v. CNA, 949 F. Supp. 681, 690 (N.D. Ind. 1996), which

held Omnisource to be the “drawee” “[i]n the sense of ‘to draw’ as

to withdraw, to call on funds, or to get from a source.”

Omnisource quoted from Black’s Law Dictionary, American Heritage

Dictionary and Webster’s New Universal Unabridged Dictionary, in

order to define “drawee”.

A contextual analysis of the contract is the proper approach

to determine the meaning of contractual terms. See Gulf Metals

Indus., Inc. v. Chicago Ins. Co., 993 S.W.2d 800, 805-06 (Tex.

App.-Austin 1999, pet. denied). The policy uses the term “drawn”

in the context of the specific listed instruments and “similar
6

. . . promises, orders, or directions to pay.” In the commercial

paper context the phrases “drawn by” and “drawn upon” are not

ambiguous and have a definite legal meaning. A contract term that

can be given a definite or certain legal meaning is not ambiguous.

National Union Fire Ins. Co. v. CBI Indus., Inc., 907 S.W.2d 517,

520 (Tex. 1995). We will not therefore interpose multiple

dictionary usages. 

The letter of credit itself identifies the drawee as the

“Advising Bank,” i.e., Marine Midland and not Parkans. Neither the

letter of credit nor any of the fraudulent documents presented by

Adusa were made or drawn by or drawn upon Parkans. Nor were any of

those documents made or drawn by or drawn upon one acting as

Parkans’ agent. In the letter of credit transaction, Marine

Midland acted as principal for itself not as agent for Parkans.

See Republic Nat’l Bank v. Northwest Nat’l Bank, 578 S.W.2d 109,

114 (Tex. 1978). Finally, none of the documents were “purported to

have been . . . made or drawn” by or drawn upon Parkans within the

meaning of the policy. The remaining documents were all ostensibly

made by Adusa or legitimate enterprises, not Parkans. Adusa’s

direction to Wells Fargo to pay via wire transfer, even if we

consider it a forgery, was not drawn upon Parkans. Accordingly,

none of the documents in this case are “covered instruments.” We

therefore reverse the partial summary judgment in favor of Parkans

and render judgment for Zurich, finding no coverage under the

primary policy.
2 We will not review the pretrial denial of Zurich’s motion for

summary judgment on this issue since final judgment was entered

adverse to the movant on the basis of a subsequent full trial on

the merits. See Ranger, 991 F.2d at 241 and n.1 above.

3 We disagree with Parkans’ contention that the Texas Amendatory

Endorsement replaces the quoted language in the CCP. The quoted

language is the first sentence of item A of Coverage Part A-1. The

endorsement provides:

1. The first sentence of Item A. of the Insuring

Agreements of Coverage Part A-1 is replaced by the

following:

2. The first sentence of Item A. of the Insuring

Agreements of Coverage Part B-1 is replaced by the

following:

We will pay to the insured those sums the insured becomes

legally obligated to pay or assumes under an insured

contract that are in excess of the Retained Limit

specified in the Declarations of our policy or any valid

and collectible other insurance.

We interpret the blank after the first numbered paragraph of the

foregoing endorsement as making no change to the first sentence of

item A pertaining to Coverage Part A-1.

7

III. EXCESS COVERAGE UNDER THE CCP

Zurich moved for judgment as a matter of law that no coverage

existed under the CCP. We review denial of a motion for judgment

as a matter of law using the same standard as the district court;

factual issues are reviewed only for the presence of substantial

evidence supporting the verdict, and legal issues are reviewed de

novo.2 Heller Fin., Inc. v. Grammco Computer Sales, Inc., 71 F.3d

518, 523 (5th Cir. 1996).

The CCP applies “excess of, but in the same manner and on the

same basis as the primary insurance shown on our Schedule A as

applying to Coverage Part A-1.”3 Even if the crime coverage in the

primary policy is intended to be included in the meaning of the
8

foregoing clause, the loss in this case is excluded because, as

discussed above, the documents involved are not “covered

instruments” as defined in the primary policy. 

Parkans has alternatively argued that CCP provides a gapfilling function, and thus applies here regardless of underlying

coverage. Parkans points to no provision in the CCP, however,

specifying drop-down coverage if primary insurance does not apply.

To the contrary, the CCP has a maintenance provision, requiring

that “the primary insurance must continuously: provide no less

coverage than written on our Schedule A at inception of our

policy.” Furthermore, if the primary coverages listed in Schedule

A are not maintained, the CCP coverage “will apply in the same

manner as if the primary insurance were still in effect, maintained

and collectible.” We hold that these provisions in the CCP

preclude drop-down coverage by showing the intention that the CCP

serve only as an excess layer above that insurance listed in

Schedule A, none of which is applicable to the Parkans loss. Cf.

Commercial Union Ins. Co. v. Walbrook Ins. Co., 7 F.3d 1047, 1050,

1053 (5th Cir. 1993) (drop-down coverage implicated by clause

providing a self-insured retention “for each occurrence not covered

by the specified underlying [policy]”).

IV. THE TORT CLAIMS 

The jury also found that Zurich engaged in an unfair or

deceptive act or practice that caused damage to Parkans, and did so
4 The jury answered “yes” to the following question:

Did Zurich engage in any unfair or deceptive act or practice

that caused damages to Parkans?

“Unfair or deceptive act or practice” means any of the

following: 

Failing to affirm or deny coverage of a claim within a

reasonable time, or

Refusing to pay a claim without conducting a reasonable

investigation of the claim, or

Failing to provide promptly to Parkans a reasonable

explanation of the factual and legal basis in the policy

for an insurer’s denial of the claim, or

Failing to attempt in good faith to effectuate a prompt,

fair, and equitable settlement of a claim when the

insurer’s liability has become reasonably clear, or 

Making or causing to be made any statement

misrepresenting the terms, benefits, or advantages of an

insurance policy, or 

making any misrepresentation relating to an insurance

policy by:

a. failing to state a material fact that is

necessary to make other statements not

misleading, considering the circumstances under

which the statements are made; or

b. making any statement in such a manner as to

mislead a reasonably prudent person to a false

conclusion of a material fact, or

Representing that the Custom Cover Policy had or would

have characteristics that it did not have, which

representation Parkans relied on to its detriment, or

Representing that an agreement confers or involves rights

that it did not have or involve, which representation

Parkans relied on to its detriment.

The jury also answered “yes” to the next question, whether Zurich

engaged in the conduct “knowingly.” That question defined

“knowingly” as having actual awareness at the time of the conduct

“of the falsity, deception, or unfairness of the conduct in

question.”

9

knowingly.4 Zurich had moved for judgment as a matter of law on

those claims, so we review legal issues de novo and factual issues

for substantial evidence in support of the verdict. Heller Fin.,

71 F.3d at 523. 

On these claims Zurich is entitled to judgment as a matter of
5 The verdict form contained the same line items of damages for

the tort claims (question 5 on the verdict) as for the breach of

contract claims (question 4), and the jury awarded less for each

item on the tort question. Even with the additional damages

awarded for “knowing” misconduct (question 6), the total tort award

was less. Entering judgment the district court disregarded the

tort damages ($1.29 million total awarded in questions 5 and 6 on

the verdict) as included in the breach-of-contract award ($1.34

10

law, because it had a reasonable basis for denial of coverage. See

Transportation Ins. Co. v. Moriel, 879 S.W.2d 10, 18 (Tex. 1994)

(insured claiming bad faith must prove that insurer had no

reasonable basis for denying or delaying payment of the claim).

This shields Zurich whether the tort claims are common-law or

statutory. Id. (common-law breach of duty of good faith and fair

dealing); Higginbotham v. State Farm Mut. Auto Ins. Co., 103 F.3d

456, 460 (5th Cir. 1997) (claims under DTPA and § 21.21 of the Texas

Insurance Code require same predicate for recovery as a bad faith

cause of action); see also Emmert v. Progressive County Mut. Ins.

Co., 882 S.W.2d 32, 36 (Tex. App.—Tyler 1994, writ denied) (insurer

will not be faced with a tort suit for challenging a claim of

coverage if there was any reasonable basis for denying coverage)

(violations of Texas Insurance Code, claims under Texas Deceptive

Trade Practices Act, and common-law tort) (citing Lyons v. Millers

Cas. Ins. Co., 866 S.W.2d 597 (Tex. 1993)). Since there was a bona

fide dispute justifying the insurer’s failure to pay, the insurer,

as a matter of law, did not act in bad faith.

Moreover, the jury essentially found no tort injuries

independent of the contract damages.5 There can be no recovery for
million total awarded question 4 of the verdict).

11

extra-contractual damages for mishandling claims unless the

complained of actions or omissions caused injury independent of

those that would have resulted from a wrongful denial of policy

benefits. Provident American Ins. Co. v. Castaneda, 988 S.W.2d

189, 198-99 (Tex. 1998) (claims of Insurance Code violations and

under DTPA).

V. OTHER ITEMS AWARDED PARKANS

Since plaintiff does not prevail under our ruling, no

attorneys’ fees or statutory damages are due. Tex. Ins. Code art.

21.55 § 6 (right to statutory damages and attorneys’ fees

predicated on insurer’s liability on claim); Tex. Ins. Code art.

21.21 § 16(b) (right to attorneys’ fees and other relief for

plaintiff “who prevails”); Mancorp, Inc. v. Culpepper, 802 S.W.2d

226, 230 (Tex. 1990)(under the DTPA actual damage award is

prerequisite to attorneys' fees); Tex. Civ. Prac. & Rem. Ann. §

38.001 (West 1997) (reasonable attorneys’ fees recoverable “in

addition to the amount of a valid claim”). 

VI. CONCLUSION

Because no covered instrument was made or drawn by or drawn

upon Parkans, the crime coverage for forgery under the primary

policy does not apply. Zurich not Parkans was entitled to summary

judgment on coverage under the primary policy. The CCP provides

only excess and not drop-down coverage, so it does not apply to
12

fill the gap in primary coverage. There is no basis for recovery

under the tort claims. No attorneys’ fees or statutory damages are

due plaintiff. 

The judgment previously entered in favor of Parkans is

reversed, and judgment is rendered for Defendant Zurich Insurance

Company denying all relief to Parkans. 

REVERSED and RENDERED.
13

DENNIS, Circuit Judge, dissenting:

To the detriment of the insured, the majority gives the terms

of this insurance policy their technical, rather than popular,

meaning. Because this method of interpretation contravenes

established canons of Texas insurance law, I respectfully dissent.

I.

The threshold question is whether Parkans’s letter of credit

is a “covered instrument.” The policy defines covered instruments

as:

Checks, drafts, promissory notes, or similar written

promises, orders or directions to pay a sum certain in

“money” that are: 

3. Made or drawn by or drawn upon [Parkans];

4. Made or drawn by one acting as [Parkans’s]

agent;

or that are purported to have been so made or drawn.

Because the policy provision refers to “checks,” “drafts,” and

“promissory notes,” the majority argues that the word “drawn” must

be read in context according to its meaning under the UCC. It

therefore concludes that the phrase “drawn by or drawn upon” limits

coverage to transactions in which the insured is the actual

“drawee” under Texas commercial paper law. Since Midland Bank was

technically the drawee in this transaction, the court holds that

the letter of credit was not “drawn upon” Parkans and therefore was

not a covered instrument.

The majority’s interpretation conflicts with basic principles

of Texas insurance law. When interpreting an insurance contract,
6 Puckett v. U.S. Fire Ins. Co., 678 S.W.2d 936, 938 (Tex. 1984)

(“[I]t is the court’s duty to give the words used their plain

meaning.”); Ramsay v. Md. Amer. Gen. Ins. Co., 533 S.W.2d 344, 346

(Tex. 1976) (“With no definition in the policy, we must first

determine whether the term has a readily ascertainable meaning in

the plain, ordinary and popular sense of the words themselves.”);

see also 45 Tex. Jur. § 109, at 130-31 (3d ed. 1995) (“Contracts of

insurance must be construed, as other contracts, according to the

terms that the parties have used, to be taken and understood, in

the absence of ambiguity, in their plain, ordinary, and popular

sense, unless there are other provisions indicating a contrary

intention of the parties. Thus, if the insurance policy does not

define the terms used, they are to be given their plain, ordinary,

and generally accepted meaning.”).

7 Puckett, 678 S.W.2d at 938 (“It is well established that

insurance policies are strictly construed in favor of the insured

in order to avoid exclusion of coverage.”); Ramsay, 533 S.W.2d at

349 (“When the language of a policy is susceptible of more than one

reasonable construction, the courts will apply the construction

which favors the insured and permits recovery.”).

8 The American Heritage Dictionary 561 (3d ed. 1992) (defining

“draw” as “To withdraw (money).”); Black’s Law Dictionary 494-95

(7th ed. 1999) (“To take out (money) from a bank, treasury, or

other depository.”); IV Oxford English Dictionary 1026 (2d ed.

1989) (“To take, receive, or obtain (money, salary, revenue, etc.)

from a source of supply.”).

14

Texas courts will read its terms in their plain, ordinary, and

popular sense unless the policy defines a term in some other way.6

Texas courts disfavor interpretations that limit coverage, and they

construe ambiguities in favor of the insured.7 Under these

principles, Parkans was covered for its loss. 

In the present context, the relevant popular definition of

“draw” is “to withdraw” or “to take or receive money from a source

of supply.”8 Under this plain-language reading, the letter of

credit was “drawn upon” Parkans because the funds stolen in this
9 See Omnisource v. CNA/Transcontinental Ins. Co., 949 F.Supp.

681, 688-90 (N.D. Ind. 1996) (applying this plain-language

construction of the phrase “drawn upon” and finding coverage for a

similar loss under a similar policy).

10 993 S.W.3d 800 (Tex. App.–Austin 1999, pet. denied).

11 Id. at 803.

12 Id. at 805.

13 Id.

15

transaction were ultimately drawn from Parkans’s account.9 And, to

the extent that it is unclear whether the policy requires that

Parkans be the technical drawee of the instrument, we are compelled

to construe this ambiguity in favor of coverage.

The majority rejects this plain reading of the policy in favor

of a more technical one. Relying on Gulf Metals Industries, Inc.

v. Chicago Insurance Co.,

10 the majority argues that the policy must

be read in the commercial paper context and according to UCC

definitions. The majority’s reliance on Gulf Metals is, however,

misplaced. At issue in Gulf Metals was the meaning of the phrase

“sudden and accidental” as it appeared in an insurance policy.11

The district court held that the term “sudden” adds a temporal

element, meaning “abrupt” or “brief.”12 The insured disagreed,

arguing that “sudden” does not necessarily carry a temporal

meaning. Citing various dictionary definitions, the insured argued

that the word can also mean “unexpected,” and that this uncertainty

of meaning proves that the policy is ambiguous.13
14 Id. at 806.

15 Id. at 805.

16

The Texas appeals court rejected the insured’s argument.14

Noting that the word “sudden” appeared in conjunction with the word

“accidental,” the court reasoned that “sudden” must add a temporal

requirement. “Because ‘accidental’ describes an unforeseen or

unexpected event,” the court held that “to ascribe the same meaning

to ‘sudden’ would render the terms redundant and violate the rule

that each word in a contract be given effect.”15 Thus, both of the

proffered interpretations were ordinary, or popular; the court was

not rejecting a plain-language interpretation in favor of a

technical one. Rather, the court held that, in context, “sudden”

was clearly being used in its popular temporal sense.

Contextual arguments like the one used in Gulf Metals are

useful for interpreting terms that have multiple common meanings,

but not for choosing a technical interpretation over a reasonable

common interpretation. In this case, for instance, the phrase

“drawn upon” cannot mean that the instrument must be “sketched” or

“illustrated” upon Parkans’s corporate headquarters, because the

policy clearly uses the phrase in the context of monetary

withdrawals. But there is nothing in the context of the policy

that limits the word “drawn” to its technical meaning under the

UCC. The term is not specifically defined, and the policy makes no

reference to the Texas Business and Commerce Code. Under Texas
16 See W. Reserve Life Ins. Co. v. Meadows, 261 S.W.2d 554, 557

(Tex. 1953) (stating that the terms of an insurance contract “are

to be given their plain, ordinary and generally accepted meaning

unless the instrument itself shows them to have been used in a

technical or different sense”); 45 Tex. Jur. § 109, at 131 (“[I]f

the insurance policy does not define the terms used, they are to be

given their plain, ordinary, and generally accepted meaning.”).

17 Mescalero Energy, Inc. v. Underwriters Indem. Gen. Agency,

Inc., 56 S.W.3d 313, 320 (Tex. App.–Houston [1st Dist.] 2001, pet.

denied) (quoting Nat’l Union Fire Ins. Co. v. CBI Indus., Inc., 907

S.W.2d 517, 521 n.6 (Tex. 1995)).

18 Emsco Screen Pipe Co. v. Heights Muffler Co., 420 S.W.2d 179,

182 (Tex. Civ. App.–Houston [14th Dist.] 1967, no writ) (“Usage or

custom is admissible to determine the terms of a contract where

parties have not defined them, provided such usage or custom is so

well established and generally known as to raise a presumption that

the parties knew of it and contracted with reference to it.”);

Trinity Universal Ins. Co. v. Rogers, 215 S.W.2d 349, 355-56 (Tex.

Civ. App.–Dallas 1948, no writ) (stating that a party cannot be

bound by a custom or usage unless the party knows of and has

accepted the usage); see also 45 Tex. Jur. § 120, at 143-44 (“The

general rule is that usage in a particular place, or of a

particular class of persons, may not be binding on other persons

unless they are acquainted with and adopt it.”).

17

insurance law, if Zurich intended for the term to have a definition

other than an ordinary one, it was required to define the term

accordingly.16

Texas courts will sometimes interpret a term in an insurance

policy according to its usage within a particular “vocation, trade,

or industry.”17 Reliance on trade usage is, however, only

appropriate when the insured is acquainted with and has adopted the

usage.18 For example, in Mescalero Energy, Inc. v. Underwriters

Indemnity General Agency, Inc., a Texas appellate court applied the

trade usage of the term “foundation” when interpreting a “Blowout
19 56 S.W.3d at 319.

20 Id. at 315-16.

21 Id.

18

Insurance Policy.”19 The insured in Mescalero was an oil and gas

drilling contractor engaged in the practice of drilling horizontal

wells.20 The policy was specifically designed to insure contractors

against blowouts, which are common hazards associated with

horizontal drilling.21 Thus, the insured was acquainted with the

industry usage, and it was reasonable to assume that the parties

intended to incorporate that usage into this industry-specific

policy.

In contrast to Mescalero, there is no evidence in the present

case that Parkans was familiar with commercial paper terminology or

that the parties intended to incorporate UCC definitions. Parkans

recycles scrap metal; it does not provide banking or legal

services. There is no reason to assume that the company’s

officials were familiar with the technical terminology of

commercial paper law. Furthermore, Parkans’s policy covers general

commercial liability including bodily injuries, property damage,

and other generic losses that most businesses incur; it is not

specific to banking-related losses. Thus, there is nothing in the

record to suggest that the parties intended to incorporate a more

specialized meaning.

In short, I would find coverage under the primary policy.
19

Under a plain reading of the policy, the letter of credit was

“drawn upon” Parkans in the sense that the money was ultimately

drawn from Parkans’s account. There is no valid contextual or

trade usage argument for reading the policy in a specialized

commercial-law sense.

II.

Because I disagree with the majority’s conclusion that there

is no coverage under Parkans’s primary policy, I also disagree with

its conclusion that there is no coverage under the umbrella policy.

The umbrella policy applies in “excess of, but in the same manner

and on the same basis as the primary insurance listed in Schedule

A . . . .” Schedule A lists Parkans’s CGL policy as one of the

primary policies covered by the umbrella policy. Thus, since the

provisions at issue in this case fall under the CGL policy, Parkans

was also covered under its umbrella policy.

III.

For the foregoing reasons, I would affirm the district court’s

ruling. Under a proper, plain reading of Parkans’s primary and

umbrella policies, this loss was covered.