Palm Desert National Bank v. Federal Insurance

ORDER DENYING PALM DESERT’S MOTION FOR PARTIAL SUMMARY JUDGMENT AND GRANTING FEDERAL’S MOTION FOR SUMMARY JUDGMENT

This case comes before the Court on Plaintiff Palm Desert National Bank (“PDNB”) and Defendant Federal Insurance Company’s (“Federal”) motions for partial summary judgment and summary judgment, respectively. The parties have filed a stipulation of undisputed facts (“Joint Stip”), which both parties admit forms the core of the facts necessary to resolve the cross-motions.

I. BACKGROUND

PDNB is a bank, headquartered in Palm Desert, California, that engages in the business of supplying “vault cash” to automated teller machines (“ATMs” or “ACMs”) throughout the country. Federal is an insurance company that contracted (in the form of a financial institution bond) with PDNB to insure it against certain losses associated with this business. PDNB made the claim of loss involved here when it discovered that the armored car company that serviced its various ATMs, Tri-State Armored Services, Inc. (“Tri-State”) had stolen approximately $50 million dollars. Because the process involved in servicing ATMs are critical to resolving the issues of contractual interpretation raised…