City Savings & Loan Ass'n v. General Insurance Co. of America

This is an action by three savings and loan companies against their respective bonding companies for loases which plaintiffs allegedly sustained by reason of the non-payment of certain certificates of deposit and commercial accounts by the now defunct San Francisco National Bank. The threshold issue is whether the bonds issued to plaintiffs by defendants cover losses of this nature. Defendants seek to introduce evidence of negotiations bet ween the American Surety Association and the Savings and Loan League from. 1938 until the present and an interpretation of the bonds by the Surety Association to demonstrate that the bonds do not cover these losses. Plaintiffs object to this evidence. Pursuant to a pretrial order of this court all parties have filed briefs on the admissibility of extrinsic evidence relating to the interpretation of the bonds in question and defendants have submitted an offer of proof.

FACTS

Plaintiffs allege in their complaint that their losses were the result of fraud, dishonesty, or illegal acts of one or more officers, directors, or employees of the San Francisco National Bank and other persons. The only provision of the Savings and Loan Blanket…