The Vons Companies, Inc.,plaintiff-Appellant v. Federal Insurance Company,opinion

SCHWARZER, Senior District Judge:

The appellant, The Vons Companies, Inc., (Vons), seeks coverage for a $10 million dollar payment it made to settle two lawsuits in which it was sued under re-spondeat superior for the tortious actions of one Gene Shirley. The lawsuits were brought by investors in a scheme who suffered losses due in part to Shirley’s fraud. We must decide, whether Vons was entitled to coverage under its employee dishonesty policy issued by Federal Insurance Company (Federal), which insured it against “direct losses ... caused by ... any employee.” The district court granted…