Luna

Background Luna purchased the policy for his business, Alberto’s Auto Sales (Alberto’s), with a coverage period of December 1, 2009-December 1, 2010. Among its terms was the provision at issue, contained in the “TRUTH IN LENDING ERRORS AND OMISSIONS COVERAGE.” In paragraph A(1) of this endorsement Praetorian promised to pay up to $300,000 for “sums the ‘insured’ legally must pay as damages solely by operation of Section 130, Civil Liability, of Title 1 (Truth in Lending Act) of the Consumer Credit Protection Act (Public Law 90-321-82 Stat. 146 et seq. and as amended) because of error or omission in failing to comply with the Act shown above. Such act or omissions must occur during the policy period.” Paragraph A(2) acknowledged the insurer’s “right and duty to defend any suit asking for damages because of such error or omission. However, we have no duty to defend suits for errors or omissions not covered by this policy.” The provision specifically excluded from coverage “any obligation for which the ‘insured’ may be held liable due to any dishonest, fraudulent, criminal or intentional act or acts committed by you, your partners, officers, employees or your agents, or any party in…