Latest 2 Cases: Federal Insurance Co. v. Axos Clearing LLC (Insurance Law), Tile Shop Holdings, Inc. v. Allied World National Assurance Co. ...

What Trump’s Pardons Reveal about Him and His Misunderstanding of Executive Clemency

AUSTIN SARAT

Austin Sarat—Associate Provost and Associate Dean of the Faculty and William Nelson Cromwell Professor of Jurisprudence & Political Science at Amherst College—describes how President Trump’s pardons reveal his “superficial and distorted” understanding of American values. Professor Sarat points out that for someone who claims to value the clemency power, President Trump has granted clemency fewer times than any President since William McKinley, who served from 1897 to 1901, and when Trump has granted clemency, he has used it to reward people whose crimes show their contempt for the rule of law.

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Federal Insurance Co. v. Axos Clearing LLC

Docket: 18-2653

Opinion Date: December 7, 2020

Judge: James B. Loken

Areas of Law: Insurance Law

After Federal issued a Financial Institution Bond to COR, COR paid $2,080,000 to settle claims by investors that a former COR registered representative had conspired with others to defraud investors by carrying out a "pump-and-dump" scheme in a risky penny-stock called VGTel. COR then filed a claim with its liability insurer for VGTel and other settlement payments, which it later settled for $3,625,000 above the policy's deductible. COR also filed a claim under Federal's Bond to recover its losses for the VGTel settlements. Federal denied coverage and filed a declaratory judgment action. The Eighth Circuit agreed with the district court that Auto Lenders Acceptance Corp. v. Gentilini Ford, Inc., 854 A.2d 378 (N.J. 2004), stands for the proposition that, under New Jersey law, COR's payments to settle third-party liability claims based on an employee's dishonest acts directed at the third parties were not a direct loss under Insuring Clause 1.B of the Bond. Furthermore, the district court did not err in dismissing COR's Clause 1.D counterclaim because COR failed to show that admissible evidence would be available at trial to prove that the employee personally committed a covered dishonest act. Accordingly, the court affirmed the district court's judgment.

Tile Shop Holdings, Inc. v. Allied World National Assurance Co.

Docket: 19-2404

Opinion Date: December 7, 2020

Judge: Stras

Areas of Law: Insurance Law

Tile Shop Holdings settled multiple lawsuits with its shareholders and then sought indemnification under its directors-and-officers insurance policies. Allied World, Tile Shop's excess insurer, denied coverage. The Eighth Circuit held that Allied is neither liable for the losses from the prior acts it has excluded in its own policy nor those excluded under the primary policy. Under the first prior-acts exclusion, Tile Shop's wrongful acts started well before August 20, 2012, the policy's retroactive date, which made any losses from them excludable under the relation-back clause.