Nordstrom, Inc. v. Chubb & Son, Inc.

Federal Insurance Company and its managing agent, Chubb & Son, Inc., (collectively, “Federal”) appeal the district court’s grant of summary judgment in favor of Nordstrom, Inc. (“Nordstrom”) in an insurance coverage dispute. In 1990, various groups of Nord-strom shareholders brought class action suits alleging securities fraud against Nordstrom and its directors and officers. These suits were consolidated, and the parties eventually reached a $7.5 million settlement. Federal, which had issued Nordstrom a policy covering “all loss” stemming from the wrongful acts of corporate directors and officers (the “D & 0 policy”), consented to the settlement. Federal, however, only agreed to fund half of the settlement and half of the defense costs because both individual directors and officers of Nordstrom (insured entities) and the corporation (an uninsured entity) were named as defendants in the underlying suit. Nord-strom subsequently brought this diversity action in federal district court, claiming that the policy covered the entire settlement sum. The district court granted Nordstrom’s motions for summary judgment. Nordstrom, Inc. v. Chubb & Son, Inc., 820 F.Supp. 530, 537…