Source: http://ace-insurance-litigation.com/document/us-bank-national-association-et-al-v-ace-american-insurance-company-complaint
Timestamp: 2019-04-25 18:06:09+00:00

Document:
0864−3396582.) Filed by U.S. Bank National Associataion, U.S. Bancorp.
Magnuson. Signed by Senior Judge Paul A. Magnuson on August 13, 2012.
04/18/2013 8 SUMMONS Returned Executed by U.S. Bank National Association, U.S.
04/18/2013 9 DOCUMENT FILED IN ERROR−INCORRECT EVENT−WILL REFILE.
04/19/2013 10 SUMMONS Returned Executed by U.S. Bank National Association, U.S.
accordance with Local Rule 83.5 (d) or (e).
Complaint on or before June 10, 2013. Signed by Magistrate Judge Janie S.
05/24/2013 14 MOTION for Admission Pro Hac Vice for Attorney Raymond A. Mascia, Jr..
05/24/2013 15 MOTION for Admission Pro Hac Vice for Attorney William G. Passannante.
Association. Approved by Magistrate Judge Janie S. Mayeron on 5/24/2013.
$ 100, receipt number 0864−3582938 by Indian Harbor Insurance Company.
$ 100, receipt number 0864−3582949 by Indian Harbor Insurance Company.
Vice of Attorney James Sandnes for Indian Harbor Insurance Company.
Vice of Attorney Tammy Yuen for Indian Harbor Insurance Company.
Date to Respond to Complaint by ACE American Insurance Company, U.S.
06/20/2013 29 MOTION for Admission Pro Hac Vice for Attorney Tiffany Saltzman−Jones.
Company. Approved by Magistrate Judge Janie S. Mayeron on 6/20/2013.
06/24/2013 33 ANSWER to Complaint by ACE American Insurance Company.
06/25/2013 34 MOTION for Admission Pro Hac Vice for Attorney Edward P. Gibbons.
Vice of Attorney Edward P Gibbons for ACE American Insurance Company.
Pretrial Conference held on 8/27/2013. Pretrial Scheduling Order to be issued.
ACE American Insurance Company, Indian Harbor Insurance Company.
Stay Discovery filed by U.S. Bancorp, U.S. Bank National Association.
02/21/2014 52 LR7.1/LR72.2 WORD COUNT COMPLIANCE CERTIFICATE by U.S.
on February 28, 2014 before Magistrate Judge Janie S. Mayeron. (45 pages).
Transcriber: Carla Bebault (E−mail: Carla_Bebault@mnd.uscourts.gov.
03/12/2014 57 MOTION for Protective Order Limiting Deposition Subpoenas by U.S.
Deposition Subpoenas filed by U.S. Bancorp, U.S. Bank National Association.
Protective Order Limiting Deposition Subpoenas filed by U.S. Bancorp, U.S.
03/12/2014 62 MOTION to Compel by U.S. Bancorp, U.S. Bank National Association.
03/12/2014 64 MEET and CONFER STATEMENT re 62 Motion to Compel filed by U.S.
03/12/2014 65 MEMORANDUM in Support re 62 MOTION to Compel filed by U.S.
03/17/2014 67 ORDER denying 41 Motion to Stay. Signed by Magistrate Judge Janie S.
Limiting Deposition Subpoenas filed by Indian Harbor Insurance Company.
Hearing set for 3/26/2014 09:30 AM before Magistrate Judge Janie S.
Insurance Company. (Beck, Alec) Modified text on 3/20/2014 (MMP).
Indian Harbor Insurance Company. Jointly Signed by U.S. Bancorp, U.S.
Bank National Association, and ACE American Insurance Company.
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).
03/25/2014 86 LR7.1/LR72.2 WORD COUNT COMPLIANCE CERTIFICATE by U.S.
National Association, Defendants' Cross Motion for A Protective Order.
Request due 4/22/2014. Redacted Transcript Deadline set for 5/2/2014.
Pleadings , 46 MOTION for Judgment on the Pleadings filed by All Plaintiffs.
Judgment on the Pleadings filed by ACE American Insurance Company.
under advisement Docket Nos. 57 and 62 and if it does not, why it does not.
07/28/2014 112 Defendant ACE American Insurance Company's Motion for 28 U.S.C.
08/05/2014 115 ORDER re 113 Joint Letter Request. Signed by Magistrate Judge Janie S.
SUPREME COURT filed by ACE American Insurance Company.
08/18/2014 118 AMENDED NOTICE OF HEARING ON 109 MOTION FOR 28 U.S.C.
Certification of the Courts Order on Motion for Judgment on the Pleadings.
SUPREME COURT filed by U.S. Bancorp, U.S. Bank National Association.
Summary Judgment filed by U.S. Bancorp, U.S. Bank National Association.
for Summary Judgment filed by ACE American Insurance Company.
Summary Judgment filed by Indian Harbor Insurance Company.
Certificate)(Gilinsky, Marshall) Modified text on 10/16/2014 (MMP).
10/16/2014 141 REPLY re 125 MOTION for Summary Judgment filed by U.S. Bancorp, U.S.
12/16/2014 148 33 ORDER GRANTING 125 MOTION for Summary Judgment filed by U.S.
Judgment filed by U.S. Bancorp, U.S. Bank National Association.
Motion to Amend the Judgment (Doc. No. 150) will be taken on the papers.
Alter/Amend/Correct Judgment filed by ACE American Insurance Company.
Judgment (Partial Opposition) filed by Indian Harbor Insurance Company.
Opposition to Motion filed by Indian Harbor Insurance Company.
01/27/2015 160 REPLY re 150 MOTION to Alter/Amend/Correct Judgment filed by U.S.
Insurance Company. Jointly Signed by U.S. Bank National Association, U.S.
on the Pleadings,,, 149 Judgment by Indian Harbor Insurance Company.
Request due 5/12/2015. Redacted Transcript Deadline set for 5/22/2015.
on the Pleadings, 149 Judgment by ACE American Insurance Company.
Notice of Appeal to 8th Circuit 176 . (lmb) Modified text on 5/19/2015 (lmb).
J udgment on the Pleadings. For the reasons that follow, the Court denies the Motions.
overcharging overdraft fees to its customers.
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.
district litigation in the Southern District of Florida.
deductible but less than the total $35 million liability limit, or $30 million plus defense costs.
See In re Checking Account Overdraft Litig., No. 1:09-md-02036-J LK (S.D. Fla.).
lease or extension of credit by [U.S. Bank]” (the “Extension-of-Credit Provision”).
embraced by the pleadings.” Saterdalen v. Spencer, 725 F.3d 838, 840-41 (8th Cir. 2013).
limitation of coverage.” Penn Mut. Life Ins. Co. v. Oglesby, 695 A.2d 1146, 1149 (Del.
against the insurer who drafted it. Id.
before trial, there is no final adjudication in that action. See Clarendon Am. Ins. Co., No.
decision in Level 3 Communications, Inc. v. Federal Insurance Co., 272 F.3d 908 (7th Cir.
to disgorge profits that allegedly were improperly obtained. Id. at 911-12.
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.
overdraft-fee dispute. Though the issues are complicated, the facts are straightforward.
additional transactions until they deposit funds to cover the overdrafts.
post before smaller transactions, the opposite will occur.
To illustrate, take this example. A customer has $200 in her checking account.
litigation in the Southern District of Florida.
with a $20 million liability limit, subject to a $25 million deductible. (Gilinsky Aff.
liability limit. (Gilinsky Aff. Ex. 5.) The policies grant coverage for “Loss which [U.S.
12, 2009); and Brown v. U.S. Bank, N.A., No. 2:10-cv-356 (RMP) (E.D. Wash. filed Oct.
See In re Checking Account Overdraft Litig., No. 1:09-md-2036 (J LK) (S.D. Fla.).
pay the $55 million into a fund to be allocated among the class members. (Id.) But U.S.
each Claim . . . in each Policy Period . . . made against [it] for Wrongful Acts . . .
loan, lease or extension of credit by [U.S. Bank]” (the “Extension-of-Credit Provision”).
reversal. They first sought reconsideration of the decision, which the Court denied.
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.
genuine if the evidence could cause a reasonable jury to return a verdict for either party.
party’s favor. Marlowe v. Fabian, 676 F.3d 743, 746 (8th Cir. 2012).
settlement is a loss turns on the interpretation of the policies’ definition of loss.
policyholder can understand the scope and limitation of coverage.” Penn Mut. Life Ins.
insurer who drafted it and for the insured. Id.
Provision or the Extension-of-Credit Provision and thus is not a loss.
1. Is Restitution Insurable Under Delaware Law?
would need to examine whether restitution is insurable under Delaware law.
Delaware courts would simply follow the lead of other States that prohibit coverage.
restoration of an ill-gotten gain.” (citation and quotation marks omitted)).
uninsurable under Delaware law, it is obviously not a covered loss under the policies.
2. If Not, Does the Settlement Constitute Restitution?
not whether restitution is insurable, but whether the settlement constitutes restitution.
connected to a claim resulting from money to which U.S. Bank “is not legally entitled . . .
ordering the disgorgement of those gains? The policies choose the second answer.
underlying action determined is restitution.
constitutes restitution but is not a final adjudication determining restitution.
the costs and benefits of continued litigation. That is exactly what this settlement was.
3. Are Any of the Insurers’ Counterarguments Availing?
Uninsurable Provision on five noteworthy grounds.
a final adjudication in the underlying action, and has determined here that there was not.
granted coverage for a payment that is merely alleged to be restitution.
is an exclusion to a claim.
could trigger a loss exception. Hence, a claim exclusion can affect a loss exception.
were finally adjudicated. In short, according to the Insurers, it is irrelevant whether U.S.
resolved claims alleging wrongdoing and seeking relief that is restitutionary.
because restitution can only occur if that which is being returned was wrongfully taken.
be restitution because U.S. Bank is legally entitled to those fees.
Underwriters at Lloyd’s of London, No. 06-16852 (Ill. Cir. Ct. Ch. Div. Dec. 3, 2010).
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.
2013 WL 4039414, at *3-4 (N.D. Ga. Aug. 7, 2013).
ensure that a payment truly fits within a category of matters that are legally uninsurable.
conclusion is consistent with public policy.
consenting to the settlement. The policies require that the Insurers consent before U.S.
later contest coverage in avoidable litigation.
prevent the settlement from being a loss.
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.
was paid as the result of a fee. The second scenario describes this case.
assessed against positive account balances.
heard and a decision has been rendered.
U.S. Bank’s Motion for Summary J udgment (Docket No. 125) is GRANTED.
Appeal, review the applicable federal civil and appellate procedure rules and statutes.
4. Fourteen days after the date on which a previously timely Notice of Appeal was filed.
shown for failing to file a timely Notice of Appeal.
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.
repeat only the facts that are relevant to this Motion.
from Indian Harbor with a $20 million liability limit, subject to a $25 million deductible.
desire to settle them, it had “agreed to settle [the class actions] for $55 million.” (Id.
amended version on J uly 2, 2013. (Stanford Decl. ¶¶ 14-15, Ex. 5; Saltzman-J ones Aff.
On December 16, 2014, this Court granted summary judgment in favor of U.S.
interest under Minn. Stat. § 60A.0811, subd. 2(a).
(2) the propriety of prejudgment interest, and (3) the amount of prejudgment interest.
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.
that the law of Delaware, as designated in the policies’ choice-of-law provision, governs.
rate for prejudgment interest in a breach-of-insurance-policy case at 10%); with 6 Del. C.
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).
(Minn. App. 1989). The choice-of-law provision here does not so state.
as a procedural matter for conflict-of-law purposes.
by its highest court in a decision.” Erie, 304 U.S. at 78.
Cedar Co. v. PPG Indus., Inc., 223 F.3d 873, 876 (8th Cir. 2000).
doctrine and what is substantive for the purposes of conflict of laws”).
affect a defense—it assumes that the insured already prevailed on its existing claim.
(Minn. App. 1990); Schwan’s Sales Enters., Inc. v. SIG Pack, Inc., 476 F.3d 594 (8th Cir.
procedural and therefore calculated under Minnesota law. Id. at 549-51.
use of his money . . . and (2) to promote settlement.’” Id. at 549 (quoting Burniece v. Ill.
. . . and is unrelated to the merits of the case.” Id.
statute, which is to encourage settlements.” Id.
Minnesota law.” Id. at 597.
insured, it relates to the insured and insurer as litigants and not to the merits of the case.
law in deciding prejudgment interest.
coverage obligation has not yet been triggered.
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.
which the statute starts and stops accruing the prejudgment interest.
the issue. See Marvin Lumber, 223 F.3d at 876.
the policy limits, and for good reason. See Owatonna Clinic—Mayo Health Sys. v. Med.
that § 60A.0811 permits prejudgment interest in excess of a policy limit).
its provisions. In re Welfare of J .J .P., 831 N.W.2d 260, 264 (Minn. 2013).
the insured is liable on the claim.
the insurer of the loss. No. 13-cv-900 (SRN/J J G), 2014 WL 4829184, at *23 (D. Minn.
binding settlement agreement and was therefore legally obligated to pay the settlement.
enters judgment on this Motion specifying the amount to which each Insurer is liable.
each Insurer owed, its Order did more than declare the parties’ rights and obligations.
J udgment, or December 16, 2014.
April 17, 2013 for ACE American, and stopping on December 16, 2014 for both Insurers.
$3,326,027.40 and ACE American owes $1,665,753.42.
incurred after April 17, 2013 as calculated starting on the date the costs were incurred.
U.S. Bank National Association and U.S.
on the date the costs were incurred if after then, and stopping on December 16, 2014.
Motion to Amend the J udgment, entered on March 19, 2015 (Dkt. #162).
the Memorandum and Order granting PlaintiIIs` Motion to Amend the Judgment, entered on March 19, 2015 (Dkt. #162).
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