Hofco, Inc. v. National Union Fire Insurance Co. of Pittsburgh

LAVORATO, Justice.

The issue here is whether a liability insurance policy covers an excise tax levied against an employer because of a transaction between the employer and its employee profit sharing plan and trust. Because we think the “tax” is a penalty and therefore not a loss as defined by the policy, we affirm the district court’s grant of summary judgment to the insurer.

I. Factual Background.

The following undisputed facts are gleaned from the summary judgment record.

In 1979 James Wieder purchased all the stock of Hofco from the Hockenberg family and became the company’s president,…