The opinion of the court was delivered by: Honorable Ronald E. Bush U. S. Magistrate Judge
MEMORANDUM DECISION AND ORDER
Currently pending before the Court is Defendant Continental Casualty Company's Motion to Dismiss Pursuant to Fed. R. Civ. P. 12(b)(6) (Dkt. 20). For the reasons discussed below, this motion is denied.
Plaintiff Idaho Trust Bank ("Idaho Trust") has filed a complaint against Defendants Continental Casualty Company ("CNA") and BancInsure, Inc. ("BancInsure") alleging that both Defendants failed to fully indemnify and defend Idaho Trust from claims brought by Inland Storage, Inc. ("Inland Storage") and James Hutchens ("Hutchens") related to Idaho Trust's alleged breach of a settlement agreement by wrongfully refusing to extend credit to Hutchens in 2010 ("2010 Dispute"). The complaint was initially filed in the District Court of the Fourth Judicial District of the State of Idaho, in and for the County of Ada on December 23, 2011 (Dkt 1-1). BancInsure removed this matter to this Court on January 24, 2012 (Dkt. 1).
1. Inland Storage Dispute
On August 3, 2009, Inland Storage filed a third-party complaint against Idaho Trust over its refusal to extend financing that it had allegedly promised for Inland Storage's planned construction of an RV and Boat Storage Facility in San Antonio, Texas in 2008. (Compl., Dkt. 1-1, ¶¶ 13-14.) On or about February 25, 2010, Inland Storage entered into a settlement agreement ("Settlement") with Idaho Trust. Included in the Settlement were terms for loans to Hutchens and Inland Storage that, if completed, would result in the mutual release of claims between Idaho Trust and Inland Storage. (Id. ¶ 19). A dispute arose regarding the funding of a loan for Inland Storage to purchase the steel for the Proposed RV Storage Facility. (Id.) As a result, Inland Storage filed a second amended third-party complaint on July 27, 2010 to add claims, alleging a breach of the Settlement by failing to extend the 2010 steel loan. (Id.)
On November 2, 2010, the Ada County District Court entered an order granting Idaho Trust summary judgment on Counts 1-4 of the Second Amended Third-Party Complaint, including Inland Storage's claims for Breach of Contract, Breach of Duty of Good Faith and Fair Dealing, Estoppel and Detrimental Reliance. Each of the dismissed claims related to Idaho Trust's alleged breach of its commitment to finance the proposed RV Storage Facility in 2008. The court did not grant summary judgment on Inland Trust's claims that Idaho Trust breached the 2010 Settlement by failing to make the steel loan, finding there were genuine issues of material fact. (Id. ¶ 20; Reply, Ex. 3, Dkt 30-1.)
2. Allegations against Defendants
Idaho Trust's Complaint alleges that both CNA and BancInsure failed to defend and fully indemnify it from claims brought by Inland Storage. (Compl. ¶¶ 31-55). Idaho Trust had a liability insurance policy with BancInsure for the policy period August 30, 2008 through August 30, 2010 and a liability insurance policy with CNA for the policy period August 30, 2009 through September 30, 2011. (Id. at ¶¶ 2-3).
In 2009, Idaho Trust tendered the defense of the Inland Storage litigation to BancInsure (Id. ¶¶ 2-4). On December 28, 2009, BancInsure accepted the tender and defended Idaho Trust from the claims related to the 2008 refusal to finance. (Id. at ¶ 18). However, after Idaho Trust notified BancInsure that it obtained partial summary judgment on the 2008 refusal to finance claims, BancInsure notified Idaho Trust on November 11, 2010, that it was no longer providing coverage for the Inland Storage litigation. (Id. at ¶ 21).
Idaho Trust also provided notice and tendered a claim to CNA pursuant to that policy. In a letter dated February 9, 2011, CNA informed Idaho Trust that it was denying coverage for Idaho Trust's claim. (Id. at ¶ 29).
CNA issued a "Miscellaneous Professional Liability Policy" number 287426661 to Idaho Trust for a policy period of August 30, 2009 through September 30, 2011 ("CNA policy"). (Compl. ¶ 24.) Under this provision, CNA agreed to "pay on behalf of [Idaho Trust] . . . all Loss resulting from any Claim first made against [Idaho Trust], during the Policy Period . . . for a Wrongful Act by [Idaho Trust] . . . provided that such Wrongful Act was committed on or subsequent to the Retroactive Date." (Motion to Dismiss, Dkt. 20-1, Ex. 1 at 35). Loss is defined as "damages, settlements, judgments . . . and Defense Costs for which [Idaho Trust] is legally obligated to pay on account of a covered Claim." (Id.) A "Claim" is defined as "a written demand by a Borrower, received by [Idaho Trust] for monetary damages or non-monetary relief arising out of a Wrongful Act, in the performance of Professional Services." (Id. at 44.) Wrongful Act is defined as "any actual or alleged error, misleading statement, act, omission, neglect, or breach of duty committed or attempted by [Idaho Trust] in its performance of Professional Services." (Id. at 36.)
Other pertinent definitions include "Professional Services" which includes "Lender Services" defined as "those services performed by or on behalf of [Idaho Trust] for a third party client of [Idaho Trust] pursuant to a written contract with such client for consideration inuring to the benefit of [Idaho Trust], including, without limitation, any Lending act." (Id. at 44.) A "Lending Act" means "a Wrongful act of [Idaho Trust] relating to an extension of credit, a refusal to extend credit or an agreement to extend credit to a Borrower." (Id.) Borrower is "any person or entity unaffiliated with [Idaho Trust] and to which an extension of credit or an agreement to extend credit was made or negotiated, or to which a refusal to extend credit was made." (Id.)
The CNA policy also provides for certain exclusions that are applicable to all Loss. (Id. at 36.) The parties are in disagreement over three of these exclusions. First is the ...