Farmers & Merchants State Bank v. St. Paul Fire & Marine Insurance

Rogosheske, Justice.

This appeal raises the issue of whether the issuer of a bankers fidelity bond is obligated to indemnify the insured bank for legal expenses incurred by the bank in defense and settlement of a customers’ suit for damages alleging fraudulent acts on the part of the bank and three of its officer-directors. Contrary to the trial court’s determination, we hold that the stipulated facts, including the allegations of the customers’ complaint and facts dehors the complaint known to the insurer, establish that the alleged fraudulent acts were perpetrated jointly by the bank and its…