U.S. Specialty Insurance v. Bridge Capital Corp.

ORDER GRANTING PLAINTIFF AND COUNTERCLAIM DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT AND DENYING DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT

I. INTRODUCTION

This case arises out of the rescission of two director and officer liability insurance policies issued by Plaintiff U.S. Specialty Insurance Company (“U.S.Specialty”) to Defendants Bridge Capital Corporation (“Bridge Capital”), Bridge Capital Leasing, Inc. (“Bridge Leasing”), Mohammad Ahmari a/k/a Mike Ahmari, and Payam C. Beheehti a/k/a Paul Behechti (collectively, “Defendants”). U.S. Specialty argues that the rescission was proper because Defendants failed to disclose material facts, rendering the policies void ab initio. Defendants contend that their disclosure was proper under their reading of the insurance application, and that U.S. Specialty’s rescission was improper and in bad faith. The Court finds that Defendants knowingly withheld material information from U.S. Specialty, and that the policies were void ab initio. Accordingly, U.S. Specialty’s motion is GRANTED, and Defendants’ motion is DENIED.

II. FACTUAL BACKGROUND

Defendants sought director and officer and employment practices liability insurance from U.S. Specialty…