Universal Mortgage Corp. v. Württembergische Versicherung AG

How courts have described this case

Verbatim parenthetical descriptions written by other courts when citing this decision. Ranked by citation-network relevance.

• holding that even if insured suffered loss when it funded fraudulent loans, it “recouped that loss in full when it resold the ... loans to investors” and was actually trying to recover for later losses due to investor repurchase demands
• holding that even if insured suffered loss when it funded fraudulent loans, it “recouped that loss in full when it resold the . . . loans to investors” and was actually trying to recover for later losses due to investor repurchase demands
• finding that losses suffered by mortgage loan originator due to an obligation to repurchase loans fraudulently issued below warranted standards because of employee dishonesty did not result “directly” from employee misconduct
• no direct loss where insured’s losses were due to buy-back provisions in sales contracts for fraudulent loan packages, not employee dishonesty in making sub-standard loans
• “Insurance covers the liability of the insureds to a third-party, while fidelity bonding covers the loss of property owned by the 9 Inc., 246 A.D.2d 202, 210 (1st Dept 1998
• “[W]hen an insured incurs liability to a third party—whether in contract or tort—as a result of employee misconduct, financial loss resulting from that liability is not ‘directly’ caused by the employee misconduct and therefore is not covered by fidelity bonds containing direct-loss language.”

Source: CourtListener parenthetical corpus (CC0).