Michigan First Pleased With Fidelity Bond Case Outcome
After a seven-year legal battle, the $570 million Michigan First Credit Union said it is pleased with a court’s decision to uphold a 2009 verdict in a fidelity bond denial case.
“We are pleased with the court’s decision to side with Michigan First, and with the latest victory we consider this legal battle over,” said Michael Poulos, president/CEO of Michigan First in Lathrup Village, Mich.
Although CUNA Mutual may legally ask the United States Supreme Court to review the case, Michigan First’s law firms, Holzman Corkery PLLC in Southfield, Mich. and McAlpine and Associates of Auburn Hills, Mich., believe a review by the Supreme Court is highly unlikely, the credit union said.
In 2004, Michigan First filed a claim with CUNA Mutual Insurance Society seeking to recover losses sustained when its vice president of lending consciously disregarded the credit union’s lending policy in implementing an indirect lending program and approving loans under that program.
After an investigation of nearly one and a half years, CUNA Mutual denied the credit union’s claim. In 2005, Michigan First filed suit against CUNA Mutual, claiming breach of the bond in their refusal to pay the credit union’s claim and also seeking damages under Michigan’s Unfair Trade Practices Act.
After a trial that lasted nearly one month, a jury in January 2009 returned a verdict in favor of Michigan First for the policy limits of $5.05 million. Michigan First also prevailed on its claims under the Unfair Trade Practices Act and received additional penalty interest of nearly $2.7 million. At the conclusion of the trial, CUNA Mutual vowed to appeal.
“Every court that has reviewed this case has concluded that the credit union suffered a loss that was covered under the bond and that CUNA Mutual wrongfully denied Michigan First’s claim,” Poulos said.
CUNA Mutual has not yet responded to a request for comment.