Great Western, Inc. v. State Farm Fire & Casualty Co.

*265 MEMORANDUM **

Great Western, Inc. § 401(k) Profit Sharing Plan (“Great Western”) appeals a grant of summary judgment for State Farm Fire and Casualty Co. (“State Farm”). We affirm.

Great Western invested in mortgages and other secured instruments through the National Mortgage Company of Montana (“National”). After learning that National had mishandled several of these investments, Great Western filed suit in Montana state court, and won a default judgment against National. Great Western now claims that the default judgment should be covered by an insurance policy that National had with State Farm. That policy provides:

The policy defines “property damage” as:

The question is whether the losses Great Western suffered resulted from “physical injury to or destruction of tangible property.”

In its Montana state suit, Great Western won damages for losses in the returns it expected to receive from its investments in mortgages and other secured instruments, and for losses in foreclosure rights and other rights in collateral. Under Montana law, such losses do not constitute “physical injury to or destruction of tangible property.” See Graber v. State Farm Fire & Cos. Co., 244…