American Bankers Life Assurance Company of Florida v. Tri City Bank & Trust Company

In this Tennessee diversity action by an insurance company against a bank, arising from a fraudulent insurance scheme by one of the bank’s officers, the District Court after a bench trial entered judgment in favor of the defendant bank, thereby declining to shift to the bank a loss of $83,-986.00 suffered by the plaintiff insurance company as a result of the bank officer’s defalcation.

In July 1976, the defendant bank entered a master credit life group insurance agency contract with plaintiff insurance company. Under the master contract, the bank, as agent, was granted the authority to solicit…