CUNA Mutual to Appeal Sperry Associates FCU Bond Coverage Decision
The latest court decision that ruled in favor of Sperry Associates Federal Credit Union in a bond coverage case will be appealed by CUNA Mutual Group.
“The trial court's decision is unfortunate, and represents an overly broad interpretation of who is covered under the bond's employee dishonesty coverage. But in cases involving complex legal issues like this one, it is often up to the appellate courts to render a final decision, and we intend to seek appellate review in this case,” wrote Phil Tschudy, CUNA Mutual media relations manager, in a statement to Credit Union Times.
CUNA Mutual is the parent company of CUMIS, the firm that provided a fidelity bond to the $307 million Sperry in Garden City Park, N.Y. The credit union, along with several others, suffered losses tied to CU National Mortgage, which was subsequently charged with fraud for the unauthorized sales of mortgages to the secondary market.
Ken Pagliughi, an attorney representing Sperry, said the March 1 decision from the U.S. District Court of New Jersey could set the tone for other credit unions including the $278 million Picatinny FCU, which has a matter currently pending in the U.S. District Court of New Jersey, and the $878 million Suffolk FCU, which has a matter pending in the U.S. District Court for the Eastern District of New York.