Edwin McRory v. Catlin Specialty Insurance Com

MEMORANDUM

Edwin C. McRory and William Rade-maker, Jr., appeal the district court’s grant of summary judgment to Catlin Specialty Insurance Company (Catlin) on their claims that Catlin, the insurer on a directors and officers policy (the Policy), denied coverage and refused to defend. We affirm.

McRory and Rademaker issued personal guarantees for a loan that Washington Trust Bank made to the company for which they were directors, PFH, Inc. We agree with the district court that when the policy terms are given a “fair, reasonable, and sensible construction,” and interpreted in a manner that an average person reasonably would, the Policy does not cover the giving or breach of obligations under the individual personal guarantees in this case. In no reasonable sense could it be thought that the guarantees were encompassed by the Policy terms. The guarantees were purely individual and were not actions by McRory and Rademaker in their director capacities. Washington Trust did not sue them because they were directors; it sued them because they were guarantors.

By the same token, nothing in the Policy terms or in the claims made against McRo-ry and Rademaker by Washington Trust…