Universal Mortgage Corp. v. Wurttembergische Versigherung AG

Dist. Ct. did not err in granting defendant's motion for summary judgment in action by plaintiff seeking to collect on bond issued by defendant that insured plaintiff against financial loss resulting from misconduct by plaintiff's employee. Instant misconduct arose out of scheme in which employee received kickbacks for causing plaintiff to fund non-conforming mortgages that plaintiff eventually sold to third-parties. Bond, though, required that plaintiff establish direct-loss, which plaintiff failed to establish where instant losses arose out of plaintiff's obligation to repurchase mortgages from third-parties. Moreover, instant bond specifically barred coverage for losses resulting from loan-repurchase obligations.