American National Insurance v. Citibank, N.A.

WOOD, Circuit Judge.

Many rules of commercial law allocate risk among different parties to transactions. Sometimes, however, it is impossible to impose responsibility for losses on the party that caused them. People disappear with ill-gotten gains, or they spend someone else’s money on fleeting pleasures. At that point, all that can be done is to allocate loss to one or another relatively innocent party. This is such a case: the real wrongdoer, Robert Carter, will never be able to restore the money he embezzled from his employer, National Accident Insurance Underwriters (“Underwriters”). So we…