Abifadel

Defendant and appellant Cigna Insurance Company appeals from a judgment after a court trial in favor of its insureds in a declaratory relief action. The lawsuit arose out of Cigna’s denial of coverage for the indemnity and defense of two lawsuits under a “claims made” directors and officers liability policy issued to the Bank of Northern California. Cigna contends there is no substantial evidence that a claim was made during the policy period, and, therefore, the trial court erroneously found coverage under the policy. We reverse.

Facts and Procedural Background

Formation of the Bank

The Bank was formed in 1983 and was a member of the Federal Deposit Insurance Corporation (the FDIC). Plaintiff and respondent Orange Bancorp, the Bank’s majority shareholder, held 51.3 percent of the Bank’s outstanding common stock. The remaining 48.7 percent of the Bank’s stock was held by various Northern California investors. Plaintiffs and respondents Jack G. Abifadel, Rudolph C. Baldoni, Martha S. Bhathal, John C. Brown and Edward H. Downer (the former directors) were members of the Bank’s board of directors and also Bank officers. The former directors were also members of Orange…