Federal Deposit Insurance v. Fidelity & Deposit Co. of Maryland

MEMORANDUM *

In this case involving claims for payment under Great American Bank’s (“GAB”) fidelity bonds, the Federal Deposit Insurance Corporation (“FDIC”) appeals the district court’s orders of December 12, 2000, January 18, 2001, and January 29, 2001, granting partial summary judgment to defendants Fidelity & Deposit Insurance Company, National Union Insurance Company of Pennsylvania, Travelers Casualty & Surety Company, and Certain Underwriters at Lloyd’s of London.

I.

Discovery of Dianne Lowe’s Dishonesty

We agree with the district court that Fidelity & Deposit, National Union, and Travelers were entitled to summary judgment on the question of whether GAB discovered during the first bond period information concerning Dianne Lowe’s dishonesty that would lead it to believe that it *141 had or would suffer a covered loss. We explained in Gulf USA Corp. v. Federal Insurance Co., 259 F.3d 1049 (9th Cir.2001), relying on the Supreme Court’s decision in American Surety Co. v. Pauly, 170 U.S. 133 , 18 S.Ct. 552 , 42 L.Ed. 977 (1898), that the standard in deciding whether a covered loss has been “discovered” during a bond period is both objective and subjective: “[A] loss is…