The opinion of the court was delivered by: Harold A. Ackerman, District Judge.
This is a declaratory judgment action in which the plaintiff,
Oritani Savings & Loan Corporation, ("Oritani"), seeks a ruling
that the defendant, Fidelity & Deposit Company of Maryland,
("Fidelity"), is obligated to indemnify it under a Savings and
Loan Blanket Bond. Presently before the Court is a motion by
Fidelity for partial summary judgment dismissing the Third Count
of plaintiff Oritani's Amended Complaint, or in the alternative
seeking leave to file a Third-Party Complaint against John Rowe.
I will decide this matter on the papers without oral argument as
permitted by Federal Rule of Civil Procedure 78.
The parties have twice previously appeared before this Court.
On July 9, 1990, the Court denied Fidelity's motion for summary
judgment, holding, inter alia, that Oritani's complaint could be
said to have asserted a claim under Insuring Agreement (A) and
that as a question of fact existed as to whether Insuring
Agreement (A) provided coverage in the matter, summary judgment
was inappropriate.*fn1 Oritani Savings & Loan Association v.
Fidelity & Deposit Company of Maryland, 741 F. Supp. 515, 524
(D.N.J. 1990.) The parties again appeared before the Court in
October, 1990 on Fidelity's motion for reconsideration of this
Court's June, 1990 decision denying their motion for summary
judgment, and on the Oritani Cross-Motions for summary judgment
and leave to amend the Complaint to unambiguously assert a claim
under Insuring Agreement (A) of the bond. Fidelity asserted three
grounds in support of its motion for reconsideration, including,
that the Court had erred in finding that a question of fact
exists as to whether coverage is afforded under Insuring
Agreement (A) of the blanket bond. Fidelity contended that the
Court had misapplied the case of National Newark & Essex Bank v.
American Insurance Co., 76 N.J. 64, 385 A.2d 1216 (1978) in
interpreting Insuring Agreement (A) of the Oritani bond because
the language in National Newark differs from that of Insuring
Agreement (A). Specifically, the bond in National Newark lacked
the definition of "Dishonest and Fraudulent Acts" present in
Insuring Agreement (A) of the Oritani bond. This Court rejected
Fidelity's first two grounds for reconsideration, and about the
contention that the Court misapplied National Newark, concluded
In light of the difficulty of the issue, the absence
of controlling authorities, and the fact that it is
wholly unnecessary for me to decide it, (since I have
already decided that there is coverage under section
(B)), I decline to rule on this issue at this time.
Oritani, 744 F. Supp. at 1316. Consequently, the Court denied
Fidelity's motion for reconsideration, granted Oritani's motion
for partial summary judgment, and granted Oritani's motion for
leave to amend. Oritani Savings and Loan Association v. Fidelity
& Deposit Company of Maryland, 744 F. Supp. 1311 (D.N.J. 1990).
Presently, the Court has once again been asked to consider
Fidelity's motion for summary judgment holding that no coverage
is afforded under Insuring Agreement (A) of the blanket bond. In
light of what counsel for Fidelity have correctly pointed out to
be the misapplication of National Newark & Essex Bank v.
American Insurance Co., in my prior opinion (See Oritani,
supra, 741 F. Supp. at 524), and for the reasons set forth below,
I find that summary judgment in favor of Fidelity, the defendant,
is appropriate. I have no need to discuss the factual background
out of which these claims arise, as it
has been completely set forth in this Court's July 1990 opinion.
See Oritani, supra, 741 F. Supp. at 517-519.
Fidelity's Motion for Partial Summary Judgment
Fidelity, the defendant, is moving for partial summary judgment
on Count Three of the plaintiff's Amended Complaint, in which the
plaintiff seeks recovery under Insuring Agreement (A). The issue
to be decided is whether the "Dishonest or Fraudulent Acts"
clause of this blanket bond, including its definition of
dishonest and fraudulent acts, covers the loss resulting from an
act by an employee which complies with all company policies and
was undertaken without the intent to cause loss to the bank or to
financially benefit himself. The clause, contained in Insuring
Agreement (A), provides:
Loss resulting directly from dishonest or fraudulent acts of an
Employee committed alone or in collusion with others.
Dishonest or fraudulent acts as used in this Insuring Agreement
shall mean only dishonest or fraudulent acts committed by such
Employee with the manifest intent
(a) to cause the Insured to sustain such loss, and
(b) to obtain financial benefit for the Employee or
for any other person or organization intended by the
Employee to receive such benefit, other than
salaries, commissions, fees, bonuses, promotions,
awards, profit sharing, pensions or other ...