Transamerica Premier Insurance Company v. Ray Miller Earl Robert Brown, Jr.

Transamerica Premier Insurance Company (“Appellant”) appeals from a district court’s affirmance of a bankruptcy court’s summary judgment holding Appellant liable to the customers of an escrow agent to whom Appellant had issued a bond. We affirm.

FACTS AND PRIOR PROCEEDINGS

E. Robert Brown and his wife, Montana residents, owned an escrow business named Guaranty Escrow Services, Inc. (“GES”). GES purchased insurance through Cogswell Agency and agent Bill Gue. GES had a blanket fidelity bond from 1982-85 covering employee theft. GES dropped this bond in 1985. In 1985 Brown told Gue he wanted some insurance allowing him to say he “was bonded.” Brown wanted each escrow account to be covered. He wanted to protect his customers and believed Gue had authority to get insurance that would do so.

Gue assigned Brown’s request to John Leaf, another Cogswell agent. Leaf obtained Appellant’s bond from Western States Bonding Agency, through agent Thomas Sauer. The bond read as follows, in pertinent part:

Appellant supplied the bond, a form contract. No schedule naming the owner or owners was ever attached. The bond became effective November 15, 1985, for a one-year term, and was…