Minnesota Life Insurance Company v. Columbia Casualty Company
Annotate this CaseThe Circuit Court granted summary judgment in favor of Columbia Casualty Company and Continental Casualty Company, finding there was no wrongdoing in denying coverage to four former insureds (Ex-Agents) and Minnesota Mutual Life Insurance Company. The trial court also denied the Ex-Agents’ and Minnesota Life’s motion to strike certain affidavits and exhibits submitted by Columbia in support of its motions for summary judgment and in defense of the Ex-Agents’ and Minnesota Life’s summary judgment motions. The dispute arose over the Agents' purchase of Errors & Omissions insurance coverage. The Agents sold Minnesota Life insurance products, and found that one of their colleagues was embezzling funds from their agency. The Mississippi Secretary of State’s office began investigating the records of the Agency and, from that investigation, determined that an agent had misappropriated client funds. Cases were filed against the agent, the Agency, Minnesota Life, and the Ex-Agents. Each complaint alleged that the wrongful acts occurred while the Ex-Agents were employed by Minnesota Life. Each complaint alleged causes of action for breach of fiduciary duty, misrepresentation and concealment, breach of implied covenant of good faith, continuing breach of contract, negligence, negligent infliction of mental and emotional distress, misrepresentation, and malpractice. As to Minnesota Life, each complaint specifically alleged that Minnesota Life participated in and/or had knowledge of the intentional taking of monies. As to the Ex-Agents, the complaints specifically alleged that they should have known that Minnesota Life and/or the colleague were misappropriating funds. The agents and Minnesota Life made a claim on their E&O insurance policy to defend the suit. Upon review, the Supreme Court found that the trial court properly denied the motion to strike and properly granted summary judgment in favor of Columbia as to Minnesota Life’s claim but erred in granting summary judgment as to the Ex-Agents’ claims. Therefore, the Court affirmed in part and reversed in part and remanded.
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