Manifest Intent Archives : Fidelity Blog

Hantz Financial Services: U.S. District Court applies “Direct Means Direct” Approach in Finding No Coverage for Third-Party Losses under Financial Institution Bond

In Hantz Financial Services, Inc. v. National Union Fire Insurance Company of Pittsburgh, PA., the U.S. District Court for the Eastern District of Michigan held that a Financial Institution Bond did not provide coverage to a financial services firm in respect of frauds perpetrated by an employee upon the firm’s clients. The decision is notable in that the Court applied the “direct means direct” approach to loss causation under the Bond. The Court also made some interesting comments with respect to the manifest intent requirement for coverage, and whether a defaulter can manifestly intend a loss to the insured in

KeyBank: New York Appellate Division denies Summary Judgment in Mortgage Lien Release case due to Material Issues of Fact as to Bank Employee’s Intent

On January 22, 2015, the New York Supreme Court, Appellate Division, released its decision in KeyBank National Association v. National Union Fire Insurance Company of Pittsburgh, Pa. The decision highlights the difficulties which sometimes arise in assessing manifest intent in financial institution losses. The Facts The insured, KeyBank, loaned a developer some $20 million for a condominium project. The loan was secured by, inter alia, mortgage liens on the condominium units. As individual condo units were sold, a percentage of the proceeds was to be used to pay down the loan, and to release the liens on those individual units.