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Insurance — bank bonds

By: WISCONSIN LAW JOURNAL STAFF//March 28, 2012//

Insurance — bank bonds

By: WISCONSIN LAW JOURNAL STAFF//March 28, 2012//

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United States Court of Appeals For the Seventh Circuit

Civil

Insurance — bank bonds

A false certificate of origin is not a counterfeit document under an insurance bond.

“A denial of coverage for the Bank’s loss in this case corresponds with the rationale we described earlier: ‘[A] bank can easily verify through minimal investigation if a fake document purports to be something that never was in existence. On the other hand, verifying the authenticity of a duplicate or imitation of a genuine document is unlikely to result in discovery of the fraud . . . .’ Nat’l City Bank, 447 N.W.2d at 179. The parties’ bond is intended to cover the risk of reliance on an imitation of a genuine document; it is not intended to cover the risk of reliance on a document that purports to be something that has never existed.”

“In sum, under the plain language of the insurance bond, Ott’s certificate of origin is not ‘a Written imitation of an actual, valid Original which is intended to deceive and to be taken as the Original.’ Consequently, the Bank’s loss as a result of Ott’s fraudulent certificate does not qualify as a loss resulting from reliance on a ‘Counterfeit.’ Progressive is entitled to judgment as a matter of law.”

Affirmed.

11-2082 North Shore Bank, FSB, v. Progressive Casualty Ins. Co.

Appeal from the United States District Court for the Eastern District of Wisconsin, Goodstein, Mag. J., Manion, J.

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