St. Paul Fire & Marine Insurance v. American Bank

CANBY, Circuit Judge:

St. Paul Fire and Marine Insurance Co. (St. Paul) appeals the district court’s judgment in favor of its insured, American Bank, (American) in a coverage dispute. Because there is no coverage under the terms of the policy, and because the district court clearly erred in finding that St. Paul is estopped from denying coverage, we reverse.

THE UNDERLYING LITIGATION

In the underlying action, Northern Line Layers (NLL), a customer, sued American Bank and two of its officers for fraud, bad faith, and negligent misrepresentation arising out of the Bank’s seizure of funds in NLL’s…