Northwestern National Insurance Company of Milwaukee, Wisconsin, Cross-Appellee v. Jerry Lutz

CUMMINGS, Circuit Judge.

In June 1985, defendant Jerry Lutz signed various documents relating to the purchase of units of Plantation Oaks, a Texas limited partnership. The documents were used by Plantation Oaks to obtain a loan from the European American Bank (“Bank”), and to persuade the plaintiff, Northwestern National Insurance Company of Milwaukee, Wisconsin (“Northwestern”), to issue a financial guarantee bond to the Bank. Thereafter Lutz made no payments to the Bank under his investor note, causing the Bank to make demands for payment by Northwestern. Northwestern made payments totalling…