Tandem Fund II, L.P. v. Scottsdale Insurance Company

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

TANDEM FUND II, L.P., Case No. 23-cv-02810-VC

Plaintiff,

ORDER GRANTING MOTION TO

v. DISMISS

SCOTTSDALE INSURANCE Re: Dkt. Nos. 7,

COMPANY,

Defendant.

Scottsdale’s motion to dismiss is granted, and dismissal is with prejudice. As alleged in the complaint (and as discussed in the arbitral decision, of which the Court takes judicial notice), Tandem loaned Cuff, a subsidiary in dire straits, $1,701,441.81 based on representations about Cuff’s customer commitments. In 2019, an arbitral panel found that Cuff and its CEO, Deepa Sood, had intentionally and materially misrepresented the state of Cuff’s affairs to induce the loans. The panel ordered Cuff and Sood jointly and severally liable for the $1,701,441.81 that Tandem had loaned Cuff, plus lender expenses, interest, and arbitration fees. Since then, Tandem has acquired Cuff’s rights under a Scottsdale insurance policy, which includes coverage for director and officer liability. But Scottsdale has refused to pay. Tandem thus brings this action for breach of contract.1 Awards for restitution are uninsurable under…