Court Opinion

ID: 9754270
Source: CourtListenerOpinion
Date Created: 2023-08-28 19:53:00.100425+00
Date Added: 2024-06-11T07:27:51.359474
License: Public Domain

BECK, Judge,
concurring.
I concur in the result. I write separately to address the issue of what quantum of evidence, including both subjective and objective (or external) evidence, is necessary to satisfy the requirement of manifest intent.
An employee may be found to have acted with manifest intent where the loss to the insured was substantially certain to result from the employee’s action, whether the employee desired such a result or not. It would be insufficient to show merely that the resultant loss to the insured or the benefit to the employee or others was the probable result of the employee’s conduct. Thus, poor judgment alone will not give rise to *297a finding of manifest intent. See Federal Deposit Ins. Corp. v. United Pacific Ins. Co., 20 F.3d 1070, 1077-78 (10th Cir.1994). While direct evidence of the employee’s subjective intent, if available, is relevant, all external indicia of intent must also be considered.
First National Bank of Louisville v. Lustig, 961 F.2d 1162, 1166 (5th Cir.1992) (citations omitted) instructs:
To determine intent to cause a loss we do not inquire solely into the subjective motive or purpose of the employee. Thus, the claim by an errant employee that no loss to the bank was intended will seldom be conclusive. When an employee obtains fraudulent loans with reckless disregard for a substantial risk of loss to the bank, a jury may infer from his reckless conduct and surrounding circumstances that he intended to cause that loss. The bank need not produce any direct evidence of the employee’s intent, but may rebut an insurer’s motion for summary judgment with circumstantial evidence from which a reasonable jury could infer the intent to cause a loss. The jury should be instructed that in answering the question of intended loss it should consider the range of evidentiary circumstances, including the relationship between the borrowers and the employee, the employee’s knowledge of the likelihood that the loans would not be repaid, and all the other surrounding circumstances bearing on the employee’s purpose.
Mr. Rice did not act with the requisite manifest intent and therefore the bank’s alleged losses are not covered by the bond. The record reveals no more than the exercise of poor business judgment by Mr. Rice in his management of the trucking industry loans made by the bank.