Court Opinion

ID: 857851
Source: CourtListenerOpinion
Date Created: 2013-04-11 19:17:48.189575+00
Date Added: 2024-06-11T13:08:38.892011
License: Public Domain

UNPUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT

                             No. 12-1481

LEE BENTLEY FARKAS,

                Plaintiff - Appellant,

          v.

NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA,

                Defendant - Appellee.

Appeal from the United States District Court for the Eastern
District of Virginia, at Alexandria.     Leonie M. Brinkema,
District Judge. (1:11-cv-00529-LMB-IDD)

Submitted:   March 7, 2013                 Decided:   April 11, 2013

Before SHEDD, DAVIS, and KEENAN, Circuit Judges.

Affirmed by unpublished per curiam opinion.

Craig C. Reilly, LAW OFFICE OF CRAIG C. REILLY, Alexandria,
Virginia; William B. Cummings, WILLIAM B. CUMMINGS, PC,
Alexandria, Virginia; Craig H. Kuglar, LAW OFFICE OF CRAIG
KUGLAR, LLC, Atlanta, Georgia, for Appellant.         Sylvia H.
Walbolt, Joseph Hagedorn Lang, Jr., CARLTON FIELDS, P.A., Tampa,
Florida; Caroline Turner English, Jackson D. Toof, ARENT FOX
LLP, Washington, D.C., for Appellee.

Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:

       A jury convicted Plaintiff-Appellant Lee Bentley Farkas of

bank, wire, and securities fraud arising from a multibillion

dollar scheme to hide the financial difficulties of his mortgage

company, Taylor, Bean & Whitaker Mortgage Corp. (“TBW”). * TBW

held a directors and officers liability policy (“the Policy”)

with       Defendant-Appellee         National      Union      Insurance     Company     of

Pittsburgh, Pa. (“National Union”). National Union had advanced

some defense costs to Farkas pursuant to the Policy, but ceased

doing so when the jury verdict was entered against him. National

Union       claimed     that    two   “in     fact”    exclusions      in    the   Policy

allowed it to cease payments. Those provisions excluded coverage

for claims “arising out of, based upon or attributable to” (1)

“the gaining in fact of any profit or advantage to which an

Insured was not legally entitled,” and (2) “the committing in

fact       of   any    criminal,      fraudulent      or    dishonest       act,   or   any

willful violation of any statute, rule or law.”

       Farkas         sued     National     Union,      seeking       declaratory       and

injunctive relief requiring National Union to continue advancing

defense costs through at least the conclusion of his criminal

appeal.         National     Union    filed    an     answer    and    a    counterclaim

seeking recoupment of the $928,977.59 it had advanced under the

       *
       We affirmed Farkas’s convictions. See United States v.
Farkas, 474 F. App’x 349 (4th Cir. 2012).

                                              2
Policy,    arguing       that     because    the       “in    fact”    exclusions        were

triggered, Farkas was never entitled to defense costs to begin

with.     The     district        court     denied       Farkas’s        motion     for     a

preliminary       injunction.       Later,       on     cross-motions       for    summary

judgment,        it     granted    National           Union’s     motion    and     denied

Farkas’s,        finding    that    (1)     the       “in     fact”   exclusions         were

triggered by the criminal conviction; and (2) National Union was

entitled to recoup the costs it had previously advanced. Farkas

timely appealed.

     After the case was calendared for oral argument, this Court

entered     an    order     withdrawing       it       from     the   calendar.     Having

carefully reviewed the briefs, record, and applicable law, we

affirm    for     the    reasons    stated       by    the    district     court    in    its

thorough opinion. See Farkas v. Nat’l Union Fire Ins. Co. of

Pittsburgh, Pa., 861 F. Supp. 2d 716 (E.D. Va. 2012).

                                                                                   AFFIRMED

                                             3