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Civil Procedure Keyed to Yeazell
Aetna Casualty & Surety Co. v. Cunningham
Citation:
224 F.2d 478 (5th Cir. 195ApFacts
Defendant was hired as the main contractor to construct a building. Defendant took out an insurance policy with Plaintiff. Under the policy, Plaintiff would provide funds for the project owner/developer to complete the project if Defendant was unable or unwilling to complete the construction. Defendant failed to complete the project, so Plaintiff stepped in and the project was completed with Plaintiff’s money. Plaintiff subsequently sued Defendant to recover the expended funds. At trial, two claims: 1) Defendant violated its contractual obligation to indemnify Plaintiff for the loss, and 2) Defendant had committed fraud in applying for the insurance policy, which led to Plaintiff’s loss. The district court found for Plaintiff on the contract claim, awarding Plaintiff all of its requested damages, but ruled that Defendant had not committed fraud. Because a judgment based only on the contract claim may be dischargeable if Defendant applied for bankruptcy, Plaintiff appealed the denial of the fraud claim. Defendant also appealed.
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