AUTHENTIC TITLE SERVICES, INC. v. GREENWICH INSURANCE COMPANY

Filing 55

OPINION. Signed by Judge Katharine S. Hayden on 11/17/2020. (sm)

Case 2:18-cv-04131-KSH-CLW Document 55 Filed 11/17/20 Page 1 of 15 PageID: 1146
NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
AUTHENTIC TITLE SERVICES, INC.,
Civil No.: 18-4131 (KSH) (CLW)
Plaintiff,
v.
GREENWICH INSURANCE COMPANY,
WESTERN LITIGATION, AMERICAN
INSURANCE PROFESSIONALS INC., AND
JOHN DOES 1-10,

OPINION

Defendants.
Katharine S. Hayden, U.S.D.J.
I.

Introduction
In this insurance coverage dispute, plaintiff Authentic Title Services, Inc. seeks coverage

under its errors and omissions policy with defendant Greenwich Insurance Company for losses
relating to an email spoofing scheme in which Authentic was duped into sending real estate loan
proceeds to a fraudulent account. The parties have filed cross-motions for summary judgment.
For the reasons set forth below, summary judgment will be granted in favor of Greenwich.
II.

Background
The relevant facts are undisputed. Authentic is an agent for title insurance policies

underwritten by Fidelity National Title Insurance Company. (D.E. 46-3, Pls.’ 56.1 Stmt. in
Response ¶ 1.) Its president is Mark Maryanski, a licensed attorney who is also the company’s
only full-time employee. (Id. ¶¶ 2-3.) Greenwich insured Authentic under a Title Professional
Liability Errors and Omissions insurance policy for the period of May 25, 2015 to May 25, 2016.
(Id. ¶ 6.)

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In March and April 2016, Authentic acted as title agent and settlement agent for a real
estate transaction for a property in South Orange, New Jersey. (Id. ¶ 29.) Quicken Loans was
the mortgage lender, and it and transferred the loan proceeds to Authentic on March 30, 2016,
the day before the originally scheduled closing date. (Id. ¶¶ 31-32.) Authentic deposited the
funds into a settlement account at TD Bank. (Id. ¶ 33.) Although they had been deposited into
Authentic’s settlement account, the funds remained the property of Quicken. (Id. ¶ 35.) The
closing was postponed, and emails ensued between Authentic’s Maryanski and Quicken’s
Brittany Clark and others concerning return wire instructions for Authentic to use in sending the
loan proceeds back. (Id. ¶¶ 37-42.)
On April 4, 2016, Maryanski received an email from “[e-mail]”
(an email address different from Clark’s legitimate email address by one letter), with what
appeared to be wiring instructions for the return of the funds. (Id. ¶¶ 43-45.) The email was
actually from an unknown third party posing as Clark, and it directed Maryanski to transfer the
funds to a specified account at Chase Bank (the “Fraudulent Account”) and to confirm only by
email. (Id. ¶¶ 43, 46.) The email also copied two spoofed email addresses that were very similar
to legitimate email addresses used by other Quicken employees involved with the real estate
transaction. (Id. ¶ 47.)
On April 5, 2016, Maryanski received an email from yet another spoofed email address,
purporting to be from yet another Quicken employee, Aloria Harris, and which was one letter off
from her legitimate email address. (Id. ¶ 48.) The email again requested that Maryanski wire the
funds to the Fraudulent Account. (Id.) That same day, Maryanski transferred the Quicken loan
proceeds of $480,750.96 to the Fraudulent Account. (Id. ¶ 49.) He sent email confirmation to
the spoofed email address for Ms. Harris, and received an acknowledgement in response from

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what the parties refer to as the “fraudster.” (Id. ¶¶ 51-52.)
By April 12, 2016, it became clear to both Maryanski and Quicken that the funds had
been diverted to the Fraudulent Account. (Id. ¶¶ 53-55.) Around April 14, 2016, Maryanski
reported the incident to Authentic’s bank, TD Bank. (Id. ¶ 56.) He also reported it to Fidelity,
which issued title insurance for the real estate transaction, to the FBI, and to JP Morgan Chase
Bank. (Id. ¶¶ 56-59.) The diverted funds were withdrawn by an unknown party and never
recovered. (Id. ¶¶ 60, 62.)
Maryanski filed a claim with Greenwich on April 18, 2016. (Id. ¶¶ 9, 63.) Receipt was
acknowledged on April 21, 2016. (Id. ¶ 68.) Quicken was indemnified by Fidelity for the loss
and provided new funds for the transaction, which closed. (Id. ¶¶ 70-71.)
On May 3, 2016, Fidelity contacted Greenwich, copying Maryanski, advising it of the
claim it received from Quicken and that it had retained legal counsel to pursue the funds, and
asserting a claim against Authentic for which it requested immediate payment. (Id. ¶¶ 72-73.)
The next day, Greenwich notified Authentic that it was denying the claim. (Id. ¶ 74.) In that
May 4, 2016 letter, Greenwich invoked an exclusion providing that the policy did not apply to
any claim:
14. based on or arising out of:
a. the commingling, improper use, theft, stealing, conversion, embezzlement or
misappropriation of funds or accounts[.]
(Id. ¶ 74; D.E. 45-4, Seery Decl. ¶ 14 & Ex. L at 3-4.) The letter continued:
This claim arises from a theft, stealing, conversion and/or misappropriation of
funds. As such, the claim is not covered by the policy as it arises from conduct
clearly excluded under this Policy. Consequently, [Greenwich] is therefore
denying defense and indemnity coverage for this matter.
(Id. at 4.) Under a heading entitled “Additional Coverage Issues,” the letter went on to refer to

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several additional exclusions, the first excluding coverage for any claim
8. based on or arising out of alleged criminal, intentionally wrongful, fraudulent
or malicious acts or omissions. However, this exclusion shall not apply to defense
expenses or the Company’s duty to defend a claim unless and until there is an
admission by, finding of fact, or final adjudication against any Insured as to such
conduct, at which time the Insured shall reimburse the Company for all defense
expense incurred.
Additionally, this exclusion will not apply to any Insured who:
a.

did not participate or acquiesce in such act, error or omission;

b.
and

had no knowledge of or reason to suspect such an act, error or omission;

c.
immediately notified the Company in writing after obtaining knowledge
of such act, error or omission.
(Id.)1 Greenwich then stated it “reserve[d] its right to deny defense and indemnity coverage for
this matter in its entirety” to the extent any insured “may be involved in any criminal,
intentionally wrongful, fraudulent or malicious act or omission.” (Id.)2 Greenwich also stated it
“reserve[d] its rights to deny defense and indemnity coverage for this matter in its entirety based
on the foregoing exclusions.” (Id. at 5.)
In a July 25, 2016 letter to Greenwich, Authentic’s counsel challenged the denial of
coverage and Greenwich’s interpretation of the policy. (Pls.’ 56.1 Stmt. in Response ¶ 75 &
Seery Decl. Ex. M.) Greenwich reiterated its coverage denial in an August 5, 2016 letter. (Pls.’
56.1 Stmt. in Response ¶ 76.)

1

Bolded terms are defined in the policy.
2
The letter also stated that the policy did not apply to any claim “based on or arising out of the
intentional or willful breach or disregard of any oral or written underwriting or binding
authority,” or “based on or arising out of the intentional or willful failure to follow any escrow or
closing instructions, or out of the intentional or wilful [sic] disregard of any escrow or closing
instructions.” (Id. at 4-5.) Neither party relies on these provisions in seeking summary
judgment, and they are not relevant to resolving the dispute before the Court.
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On March 27, 2017, Fidelity demanded payment directly from Authentic in the amount
of $520,107.87. (Id. ¶¶ 77-78 & Seery Decl. Ex. O.) It has not filed suit against Authentic for
payment. (Pls.’ 56.1 Stmt. in Response ¶ 80.) On June 28, 2017, Authentic’s counsel again
wrote to Greenwich to demand coverage for the Fidelity claim; Greenwich reiterated its denial
on July 18, 2017. (Id. ¶¶ 81-82.)
On February 26, 2018, Authentic filed suit in Essex County Superior Court against
Greenwich, along with Western Litigation, Inc., which Authentic alleged was Greenwich’s
counsel, and American Insurance Professionals, LLC (“AIP”), Authentic’s insurance broker.
(D.E. 1-2, Compl.)3 Authentic’s complaint sought coverage from Greenwich for Fidelity’s claim
(count 1), and asserted claims against Greenwich for breach of the duty of good faith and fair
dealing (count 2), breach of contract for denying coverage (count 3) and for denying Authentic
legal representation (count 4), negligence for failing to participate in the claims negotiation
process (count 5), and breach of fiduciary duty for failing to advise Authentic of the availability
of additional coverage for cyber fraud (count 6). Authentic also asserted additional claims for
negligence and malpractice (counts 7 and 8), and breach of fiduciary duty (count 9). Western
Litigation removed the action to this Court on March 23, 2018, on the basis of diversity
jurisdiction. (D.E. 1.) Authentic subsequently dismissed its claims against Western Litigation
and AIP. (D.E. 16, 35.) It also dismissed the claims in counts 2, 5, 6, 7, 8, and 9 against
Greenwich, leaving only counts 1, 3, and 4 remaining for disposition. (D.E. 17.) Thus, all that
remains for disposition are Authentic’s claims against Greenwich seeking a declaration of

3

The complaint also named ten unidentified John Does. As discovery is closed, these fictitious
defendants will be dismissed. Blakeslee v. Clinton Cnty., 336 F. App’x 248, 250-51 (3d Cir.
2009); Fed. R. Civ. P. 21.
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coverage and for breach of contract for denying it coverage and legal representation. Greenwich
answered on July 25, 2018. (D.E. 18.)
Greenwich has now moved for summary judgment, relying on exclusion 14(a) of the
policy, which, as noted earlier, excludes from coverage claims “based on or arising out of . . . the
commingling, improper use, theft, stealing, conversion, embezzlement or misappropriation of
funds or accounts.” (D.E. 45-3, Def.’s Moving Br. 4-5, 11; see also D.E. 50, Def.’s Reply Br.)
Greenwich also relies on the policy’s definition of “damages” as excluding “the loss of or
unauthorized removal of funds” from the insured’s account. (Id. at 11-12.) Authentic has
opposed Greenwich’s motion and also cross-moves for summary judgment in its favor, arguing
that a different exclusion, exclusion 8, is the more appropriate one on the facts, and because it
doesn’t apply, Greenwich is required to provide coverage for the claim. (See D.E. 46-1, Pl.’s
Opp. Br.) Authentic further argues that Greenwich’s proposed interpretation of section 14(a)
would render the policy ambiguous and illusory, and that that ambiguity should be resolved in its
favor.
III.

Standard of Review
A. Summary Judgment Standard
Summary judgment is proper where the movant demonstrates that there is no genuine

dispute as to any material fact and that it is entitled to judgment as a matter of law. Fed. R. Civ.
P. 56(a). In ruling on the motion, the Court views the evidence in the light most favorable to the
nonmoving party and draws all inferences in favor of that party. Auto-Owners Ins. Co. v. Stevens
& Ricci, Inc., 835 F.3d 388, 402 (3d Cir. 2016). A factual dispute is “genuine” if the evidence
would permit a reasonable jury to find for the non-movant. Jutrowski v. Twp. of Riverdale, 904
F.3d 280, 289 (3d Cir. 2018). A fact is “material” if it “might affect the outcome of the suit

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under the governing law.” Burton v. Teleflex Inc., 707 F.3d 417, 425 (3d Cir. 2013). At the
summary judgment stage, the Court is not permitted to make credibility determinations or weigh
the evidence. Id. at 428-29.
The same standard applies when cross-motions for summary judgment are filed. Id.
“When both parties move for summary judgment, ‘[t]he court must rule on each party’s motion
on an individual and separate basis, determining, for each side, whether a judgment may be
entered in accordance with the Rule 56 standard.’” Auto-Owners, 835 F.3d at 402 (quoting 10A
Charles Alan Wright et al., Federal Practice & Procedure § 2720 (3d ed. 2016)). Cross-motions
for summary judgment are a particularly appropriate vehicle for deciding insurance coverage
disputes such as this one, in which the parties do not contest the basic facts underlying the
dispute. See Wimberly Allison Tong & Goo, Inc. v. Travelers Prop. Cas. Co. of Am., 559 F.
Supp. 2d 504, 510 (D.N.J. 2008) (Simandle, J.) (“Under New Jersey law, ‘[t]he interpretation of
an insurance contract on undisputed facts is a question for the court to decide as a matter of law
and can be the basis for summary judgment.’” (citation omitted)), aff’d, 352 Fed. App’x 642 (3d
Cir. 2009).
B. Interpretation of Insurance Policies
“An insurance policy is a contract that will be enforced as written when its terms are clear
in order that the expectations of the parties will be fulfilled.” Flomerfelt v. Cardiello, 202 N.J.
432, 441 (2010).4 Policy language is interpreted “according to its plain and ordinary meaning.”
Id. (citation and internal quotation marks omitted). Terms that are not clear, but ambiguous, are
construed in favor of the insured and against the insurer. Id. “If the language is clear, that is the
end of the inquiry.” Chubb Custom Ins. Co. v. Prudential Ins. Co. of Am., 195 N.J. 231, 238

4

There is no dispute that New Jersey law governs.
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(2008). “[I]n the absence of an ambiguity, a court should not ‘engage in a strained construction
to support the imposition of liability’ or write a better policy for the insured than the one
purchased.” Id. (citation omitted); see also Flomerfelt, 202 N.J. at 441. “If the terms of the
contract are susceptible to at least two reasonable alternative interpretations, an ambiguity
exists,” and in that event, “a court may look to extrinsic evidence as an aid to interpretation.”
Chubb, 195 N.J. at 238.
Generally, policy exclusions are narrowly construed, and it is the insurer’s burden to
“bring the case within the exclusion.” Flomerfelt, 202 N.J. at 442 (citation and internal quotation
marks omitted). “[I]f there is more than one possible interpretation of the language, courts apply
the meaning that supports coverage rather than the one that limits it.” Id. But “far-fetched
interpretation[s]” do not create ambiguity, and “courts must be careful not to disregard the ‘clear
import and intent’ of a policy’s exclusion.” Id. “Rather, courts must evaluate whether, utilizing
a ‘fair interpretation’ of the language, it is ambiguous.” Id.
IV.

Discussion
The parties do not dispute the key facts; accordingly, the question before the Court on

these cross-motions is whether either party is entitled to judgment as a matter of law. Answering
that question begins with the language of the policy, which provides for coverage as follows:
B. WHAT IS COVERED
Subject to all terms and conditions of this policy, the Company will pay on the
Insured’s behalf damages and defense expenses arising out of a claim first made
against the Insured during the policy period, and reported to the Company in
writing during the policy period, by reason of an actual or alleged negligent act
or omission or personal injury, in the performance of professional services that
are alleged to have occurred on or after the retroactive date of this policy.
(Seery Decl., Ex. B, Policy § B.) The policy defines the term “Damages” as “a monetary
judgment or monetary award which the Insured is legally obligated to pay . . . . However,

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damages do not include . . . g. the loss of or unauthorized removal of funds from any Insured’s
account.” (Policy § A.4.)
Among the “terms and conditions” of the policy is a series of exclusions, including
exclusion 14(a), which provides as follows:
This insurance does not apply to any claim:
...
14. based on or arising out of:
a. the commingling, improper use, theft, stealing, conversion, embezzlement or
misappropriation of funds or accounts;
b. sums received by any Insured or credited to any Insured’s account; or
c. fees, premium, taxes, claims, commissions or brokerage monies.
(Policy § H.14.)
Greenwich contends, and the Court agrees, that exclusion 14(a) directly addresses
the factual scenario here. The exclusion’s plain language – the indisputable starting point
for the Court’s analysis under New Jersey law – states that no coverage is provided for
claims “based on or arising out of” the theft, stealing, conversion, or misappropriation of
funds. The New Jersey Supreme Court has defined the phrase “arising out of” to mean
“originating from, growing out of or having a substantial nexus.” Flomerfelt, 202 N.J. at
454 (citation and internal quotation marks omitted); see also Am. Motorists Ins. Co. v. LC-A Sales Co., 155 N.J. 29, 35-36 (1998). Fidelity’s claim against Authentic and
Authentic’s consequent claim for coverage under its policy with Greenwich undeniably
originated from, grew out of, or had a substantial nexus to funds belonging to Quicken
that were transferred into the Fraudulent Account and then were withdrawn by a person
or entity other than Quicken and were never recovered.

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The parties’ debate is with whether that scenario involved the “theft,” “stealing,”
“conversion,” or “misappropriation” of Quicken’s funds. Greenwich argues that these
are clear terms that involve wrongfully depriving another of its property, which happened
here. Conversion, for example, is defined as the “wrongful exercise of dominion and
control over property of another without authorization and to the exclusion of the owner’s
rights in that property.” Chicago Title Ins. Co. v. Ellis, 409 N.J. Super. 444, 456 (App.
Div. 2009). “Misappropriation” involves the “application of another’s property or money
dishonestly to one’s own use.” Black’s Law Dictionary (11th ed. 2019). “Theft” is
commonly defined as “the wrongful taking and removing of another’s personal property
with the intent of depriving the true owner of it.” Black’s Law Dictionary (11th ed.
2019). So construed, the terms undoubtedly apply to the Quicken funds that Maryanski
erroneously sent to the fraudulent account; it does not matter, in other words, who
committed the theft or other prohibited act, the insured or another party; if the claim arose
from such an act (and it cannot reasonably be disputed that it did), the plain and ordinary
meaning of the language in exclusion 14(a) supports Greenwich’s denial of coverage.
Authentic argues that the terms theft, stealing, misappropriation, and conversion
are ambiguous because they could be interpreted to include conduct by both the insured
and by third parties, and that because they are ambiguous, they must be interpreted in
favor of it, the insured, and against Greenwich, the insurer. In this context, that means
interpreting the terms to reach only conduct by the insured, and not by other actors.
Adopting this argument would, of course, result in exclusion 14(a) not applying to the
spoofing incident involving Authentic’s loss of the Quicken funds.

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The Court declines to do so. Although Authentic is correct that ambiguous terms are to
be construed in favor of the insured, see Flomerfelt, 202 N.J. at 441, these terms are not
ambiguous. Authentic’s argument to the contrary relies on several unpersuasive premises. First,
it is based on a faulty application of the interpretive maxim noscitur a sociis, which provides that
a general term is given a more restrictive meaning by virtue of its association with more specific
terms. See Sealed Air Corp. v. Royal Indem. Co., 404 N.J. Super. 363, 380-81 (App. Div. 2008)
(explaining noscitur a sociis to mean that “‘a word is known from its associates. Words of
general and specific import take color from each other when associated together, and thus the
word of general significance is modified by its associates of restricted sense.’” (quoting Bertrand
v. Jones, 58 N.J. Super. 273, 283, 156 (App. Div. 1959)). That is not what Authentic has
proposed; instead, it contends some of the terms (theft, stealing, misappropriation, and
conversion) are capable of reaching first- and third-party conduct, while others (commingling,
improper use, and embezzlement) reach only first-party conduct. To make the policy clear,
Authentic posits, all of the terms should be interpreted as applying to only to first-party conduct;
i.e., conduct by the insured. As explained above, noscitur a sociis calls for using the more
specific to circumscribe the more general, not simply slotting terms into definitional groups and
picking one.
Moreover, as the New Jersey Supreme Court has explained, “‘[a] genuine
ambiguity arises only where the phrasing of the policy is so confusing that the average
policyholder cannot make out the boundaries of coverage.’” Passaic Valley Sewerage
Com’rs v. St. Paul Fire & Marine Ins. Co., 206 N.J. 596, 608 (2011) (quoting
Progressive Cas. Ins. Co. v. Hurley, 166 N.J. 260, 274 (2001)). One need look no further
than Maryanski’s own report of the potential claim to Greenwich to see that the term

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“misappropriation,” for example, has a clearly understood meaning that includes thirdparty conduct. (See Pls.’ 56.1 Stmt. in Response ¶ 65 (excerpting claim report in which
Maryanski describes potential claim as “involving misappropriated wire funds”).) The
terminology in exclusion 14(a) is clear as written; it is Authentic’s proposed
interpretation, which would engraft a limitation absent from the text, that would introduce
confusion, and the Court declines the invitation to rewrite the policy in this manner. See
id. (“If the policy terms are clear, we interpret the policy as written and avoid writing a
better insurance policy than the one purchased.”).
Authentic also attempts to depict exclusion 14(a) as ambiguous, and therefore
subject to an interpretation that favors it over the insurer, by invoking the language of
exclusion 8. That provision states that the insurance policy does not apply to claims
“based on or arising out of alleged criminal, intentionally wrongful, fraudulent or
malicious acts or omissions,” but exempts from the exclusion insureds who “did not
participate in or acquiesce in such act, error or omission,” had no knowledge or reason to
suspect it, and immediately gave Greenwich written notice after learning of it. (Policy
§ H.8.) Authentic contends that this exclusion “provides” coverage to it in the event of a
crime committed by someone other than the insured, and that interpreting exclusion 14(a)
as Greenwich proposes would take away that coverage, placing the exclusions in “direct
conflict” and rendering the policy “hopelessly ambiguous” and “illusory.” (Pl.’s Opp. Br.
2-3.) As an initial matter, exclusion 8 does not “provide” coverage; if it does not apply,
coverage is simply not excluded on the basis of the conditions specified in it. The
inapplicability of one exclusion does not negate the applicability of all other exclusions.
(See Policy § B (“Subject to all terms and conditions of this policy, the Company will

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pay . . . damages and defense expenses . . . .”).) See also Weedo v. Stone-E-Brick, Inc.,
81 N.J. 233, 247-48 (1979) (“exclusion clauses subtract from coverage rather than grant
it,” and each exclusion is read independently of each other).
Moreover, Authentic’s invitation to read exclusion 14(a) in the context of the policy as a
whole helps Greenwich’s position rather than its own. Authentic argues that exclusion 14(a)
must be read to reach only conduct by the insured. But the language of other exclusions suggests
that when Greenwich intended that result, it expressly said so. Exclusion 8, for example,
includes the carve-out language discussed above. Exclusions 11, 15, and 16 also expressly refer
to conduct by the insured. Exclusion 14(a) does not. As Greenwich argues, this indicates that the
company intended it to apply to conduct regardless of whether the insured was involved; in other
words, this is the intended result of the language, rather than an unintended ambiguity in it. (See
Def.’s Reply Br. 7 (“[W]hat Authentic describes as ambiguity is, in fact, the only reasonable
interpretation of Exclusion 14 under the plain meaning of the language used.”).)
Although neither party has pointed to an authoritative interpretation of the disputed
policy language under New Jersey law, and neither suggests that the Greenwich form is a
standardized one,5 Greenwich has cited several decisions from other jurisdictions in which courts
were confronted with similar policy language and found it to be unambiguous and to reach thirdparty conduct. In Accounting Resources, Inc. v. Hiscox, Inc., 2016 WL 5844465, at *1 (D. Conn.
Sept. 30, 2016), for example, the district court, presented with policy language and arguments
markedly similar to those presently before this Court, concluded that a misappropriation-of-funds

5

See Chubb Custom Ins. Co. v. Prudential Ins. Co. of Am., 195 N.J. 231, 238 (2008) (“Although
not a canon of construction, courts frequently look to how other courts have interpreted the same
or similar language in standardized contracts to determine what the parties intended, especially
where rules in aid of interpretation fail to offer a clear result.”)
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exclusion unambiguously precluded coverage for a third party’s misappropriation or theft of
funds using a spoofing scheme to dupe the vendor, a bookkeeping company, into paying
fraudulent invoices. The policy provided that the insurer had “no obligation to pay any sums . . .
for any claim . . . based upon or arising out of the actual or alleged theft, misappropriation,
commingling, or conversion of any funds, monies, assets, or property.” Id. at *1. The court
rejected the vendor’s argument that this language only applies to conduct by parties other than
the insured or its employees, observing that “[t]he policy’s wording says nothing about who must
engage in the theft or misappropriation of funds,” and the “absence of limitation bespeaks
breadth.” Id. at *2. The court found support for its conclusion, as this Court does here, in the
existence of a separate “intentional acts” exclusion that expressly limited its operation to acts of
the insured. See id. at *3. The language of that exclusion closely tracks the language of
exclusion 8 in the Greenwich policy.6
In sum, the plain language of exclusion 14(a) dictates its applicability to the spoofing
scheme underlying this lawsuit. Review of the exclusion in the context of the policy as a whole,
and paying particular attention to exclusion 8 given Authentic’s heavy reliance on it, does not
change that conclusion. Hiscox and other cases cited by Greenwich provide further support to
the Court’s conclusion. The language is not ambiguous,7 and the Court rejects Authentic’s

 Although the language of the “intentional acts” exclusion was not excerpted in the Connecticut

6

district court’s opinion, Greenwich has supplied the policy as an exhibit to its reply certification.
(See D.E. 50-6, Ex. S to Seery Supp. Decl.)
7

Although this result is consistent with Magistrate Judge Waldor’s earlier ruling (D.E. 42) that
the word “theft” in the exclusion is unambiguous, the Court does not rely on the law of the case
doctrine to reach it. (Cf. Def.’s Moving Br. 17.) The question before Judge Waldor was far
narrower, involved resolution of a discovery dispute, and did not implicate the merits. See, e.g.,
Speeney v. Rutgers, 369 F. App’x 357, 359-61 (3d Cir. 2010); Krys v. Aaron, 106 F. Supp. 3d
472, 480-81 (D.N.J. 2015) (Simandle, J.); Lesende v. Borrero, 2014 WL 4199095, at *4 (D.N.J.
Aug. 22, 2014) (Debevoise, J.) (all discussing and declining to apply law of the case doctrine). 
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arguments to the contrary, including its resort to the doctrine of the insured’s reasonable
expectations8 and its reliance on decisions that found ambiguity in policy language bearing no
resemblance to the Greenwich policy before the Court.
Finally, Greenwich alternatively relies on the policy’s definition of “damages” as a basis
to deny coverage. As discussed above, the policy provides that, subject to the terms and
conditions therein, Greenwich will pay certain “damages” and defense expenses; “damages” do
not include “the loss of or unauthorized removal of funds” from the insured’s account. (Policy
§§ B, A.4.) In view of the clear applicability of exclusion 14(a), the Court declines to reach the
issue of whether the transfer constituted a “loss” of the funds or whether it involved an
“unauthorized” removal under these facts.
V.

Conclusion
Greenwich’s motion for summary judgment is granted, and Authentic’s cross-motion for

summary judgment is denied. An appropriate order will issue.
/s/ Katharine S. Hayden
Katharine S. Hayden, U.S.D.J.

Date: November 17, 2020

8

Oxford Realty Group Cedar v. Travelers Excess & Surplus Lines Co., 229 N.J. 196, 208 (2017)
(doctrine applies when language is ambiguous, or terms and conditions are misleading)
15