United States District Court, N.D. California
June 2, 2004.
HUMBOLDT BANK, Plaintiff,
GULF INSURANCE COMPANY, Defendant.
The opinion of the court was delivered by: SAMUEL CONTI, Senior District Judge
ORDER GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT AND
DENYING PLAINTIFF'S CROSS-MOTION FOR SUMMARY ADJUDICATION OF
This dispute arises from the theft of $5.25 million belonging
to Plaintiff Humboldt Bank ("Humboldt"). Humboldt initiated the
present action claiming that this loss is covered through a bond
issued by Defendant Gulf Insurance Company ("Gulf"), and that
Gulf is liable for any unrecovered amounts. Gulf disagrees.
Presently before the Court are Gulf's Motion for Summary Judgment
or Summary Adjudication of Issues, and Humboldt Bank's
Cross-Motion for Summary Adjudication of Issues. The Court,
having reviewed the plain language of the bond along with the
submissions and arguments of the parties, finds that this money
is not covered by Humboldt's bond with Gulf. Accordingly, Gulf's
motion for summary judgment is hereby granted, and Humboldt's
cross-motion for summary adjudication is hereby denied. I. BACKGROUND
A. The Stolen ATM Currency
This case concerns a common practice in the banking industry
whereby banks allow owners of automated teller machines ("ATMs")
to use the bank's vault cash for dispensement in the ATMs in
exchange for interest and other fees on the money. In December of
2000, Tehama Bank*fn1 entered into an ATM vault cash
agreement with an Independent Sales Organization ("ISO") named
Direct Connect. The sole principal of Direct Connect was a man
named Michael Schwartz ("Schwartz") who owned or leased a number
of ATMs on the East Coast. In an effort to find cash for his
ATMs, Schwartz applied for a Cash Services Agreement with Tehama
in the latter part of 2000. As part of his application, Schwartz
supplied Tehama with tax returns, financial statements, and
submitted to on-site inspection of his business. Despite his
dubious credit history and the fact that both of his companies
were run out of his personal residence, Tehama entered into a
Cash Services Agreement ("CSA") with Schwartz on December 21,
2000. The relevant portions of the CSA are as follows:
Upon Schwartz's request, Tehama would supply
currency for use in the ATMs. The funds were to be
delivered to the ATMs by a third-party, armored
service provider. See Ex. C to Barkley Decl. at §§ 2.1, 2.2.
In exchange for use of the money, each month
Schwartz would pay Tehama 11.5% of the average
outstanding daily balance allotted to each ATM
terminal, along with various other set fees. Id. at
"Title to and the right to possession of all such
currency [supplied by Tehama], unless and until paid
to a customer lawfully withdrawing funds [from an
ATM] . . . shall at all times belong to [Tehama]."
Id. at § 2.1.
Upon termination of the agreement or the request of
Tehama, Schwartz would immediately pay Tehama the
full amount of any outstanding advances and fees. All
such amounts not so paid following demand would
thereafter bear interest at a rate of 18%. Id. at §
One aspect of the relationship between Tehama and Schwartz
warrants further discussion. Normally, banks do not deliver cash
to ISOs directly. Generally speaking, the money is wire
transferred to a correspondent bank, the money is then placed
into cassettes and picked up by an armored carrier service. The
armored carrier service then delivers the cash to the ATMs and
inserts it into the machines. All of this is done without the ISO
ever having access to the funds. See Def.'s Mot. For S.J. at 5.
In the instant case, Tehama allowed Schwartz to use his own
armored carrier service, Schwaz Armored LLC, to load his ATMs.
Schwartz was the sole owner of Schwaz Armored LLC, which shared
the same principal place of business as Direct Connect. Over the
course of this relationship, Schwaz Armored was used to transport Tehama's cash to the ATMs and load it into the machines.
Consequently, Schwartz was given direct access to the funds.
In or about April of 2001, pursuant to its merger with Tehama,
Humboldt agreed to become the servicer for Tehama's ATM program.
All contracts between Tehama and its ISOs, including Direct
Connect, were transferred or assigned to Humboldt. Complaint, ¶
12. Humboldt had a set policy against providing ISOs direct
access to the funds being lent. Ex. 20 to Valeriano Decl. As a
consequence, in or about August of 2001, Humboldt informed
Schwartz that he would either have to procure another armored
carrier to transport the cash or the relationship between
Humboldt and Direct Connect would be terminated. Id. at Ex. 21.
Humboldt's letter stated that if Schwartz decided "not to have a
third party involved, please let this letter serve as [the
bank's] 120-day notice of termination." Id. at Ex. 21. During
this 120-day period, however, Humboldt satisfied cash-requests
from Schwartz in the amount of $5.25 million. Schwartz then
absconded with the bulk of this money and was later found dead in
Florida. Gulf's Mot. For S.J. at 1. An investigation by the FBI
and local authorities recovered approximately $3.7 million of
this money which has been returned to Humboldt. Complaint, ¶ 15.
Approximately $1.3 million remains outstanding.
B. The Bond
Gulf issued a Financial Institution Bond, bond number GA0426583
(the "Bond" or the "Policy"), to Tehama effective August 23,
1999. Complaint, Ex. C. That Policy provides coverage for a
variety of risks to the bank's currency including employee dishonesty, theft in transit, loss or theft of property "on
premises", etc. Id. at p. 1-2. The policy also contains a
number of exclusions from coverage, and there is one in
particular around which this case centers. Exclusion (e) provides
in relevant part:
This bond does not cover:
(e) loss resulting directly or indirectly from the
complete or partial nonpayment of or default upon
(1) any loan, or any transaction in the nature of
a loan, including repurchase agreements, or
extensions of credit, whether or not involving the
Insured as a lender or borrower, or
(2) any false or genuine note, account, agreement,
invoice or other evidence of debt assigned or sold
to, discounted or otherwise acquired by the Insured,
whether the Insured's participation was procured in
good faith or through trick, artifice, fraud or false
pretense. . . .
Id. at p. 15 (emphasis added).
Exclusion (e) does not apply however if the loss was
perpetrated by an "employee" of the bank. There are several
categorical definitions of "employee" set forth in the Policy,
and again, there is one in particular that is relevant to the
present dispute. Subsection (g) under the definition of employee
states in relevant part:
(g) any natural person and any organization
authorized by the Insured to perform services for the Insured as electronic data processor of
checks or negotiable orders of withdrawal or other
accounting records of the Insured (hereinafter called
"Processor") while performing such services. . . . A
Federal Reserve Bank or clearing house, and customers
of the Insured, shall not be deemed to be Processors.
Id. at p. 18.
C. The Claim
On April 15, 2002, Humboldt submitted a Proof of Loss to Gulf
claiming that the unrecovered portion of the money stolen by
Schwartz was covered under the Bond. After a period of discovery
and investigation, Gulf formally denied Humboldt's claim on
January 8, 2003. Ex. Q to Fisher Decl. In asserting that no
coverage existed for this loss, Gulf argued, inter alia, that
the money given to Schwartz was a loan, in the nature of a loan,
and/or an extension of credit, and therefore was not covered
under the Policy. Id. Humboldt then initiated the present
action asserting two claims against Gulf: (1) Breach of contract;
and (2) Breach of the implied covenant of good faith and fair
dealing. Humboldt contends this money is covered under the Bond
because it was not in the nature of a loan or extension of
credit, and alternatively, that Schwaz Armored acted as a "data
processor" for Humboldt and therefore the money would be covered
even if it was deemed to be something in the nature of a loan.
With respect to its second cause of action, Humboldt argues that
Gulf's method of handling and ultimate decision on its claim
under the Policy was unreasonable and conducted in bad faith.
Complaint, ¶ 40. Gulf now moves for summary judgment or, alternatively, summary
adjudication. Gulf makes three primary arguments in its moving
papers: (1) The money supplied by Humboldt for use in the ATMs
falls within exclusion (e) and therefore is not covered under the
Policy; (2) Neither Schwaz Armored nor Schwartz acted as a "data
processor" for Humboldt; and (3) In the event that the Court does
not grant summary judgment on the issue of coverage, Gulf is
entitled to summary adjudication on the question of bad faith
because its construction of the Policy language and treatment of
Humboldt's claim was reasonable as a matter of law. Humboldt has
filed a cross-motion for summary adjudication on the question of
whether exclusion (e) applies to the loss which is the subject of
this action. Having reviewed the parties' submissions, and for
the reasons articulated below, the Court finds as a matter of law
that: (1) Exclusion (e) is applicable to the loss which forms the
basis of this action; (2) Neither Schwaz Armored nor Schwartz
acted as a "data processor" for Humboldt; and (3) Gulf's handling
of Humboldt's claim was reasonable and not conducted in bad
faith. Accordingly, Humboldt's motion for summary adjudication is
hereby denied, and Gulf's motion for summary judgment is hereby
II. LEGAL STANDARD
A. Summary Judgment
A party moving for summary judgment bears the burden of
persuasion that there is no triable issue of material fact and
they are entitled to judgment as a matter of law. Aguillar v.
Atlantic Richfield Co., 25 Cal.4th 826, 850 (2001). There is no "genuine" issue concerning the facts if a reasonable fact finder
could only come to one conclusion. Matsushita Elec. Indus. Co.
v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986). The moving
party has the initial burden to demonstrate the absence of a
genuine issue of material fact. Celotex Corp. v. Catrett,
477 U.S. 317, 323 (1986). Once the moving party has met its burden,
the nonmoving party "must do more than simply show that there is
some metaphysical doubt as to the material facts." Matsushita
Elec. 475 U.S. at 586. The nonmoving party has the burden of
producing operative facts, and the "mere existence of a scintilla
of evidence in support of the plaintiff's position will be
insufficient; there must be evidence on which a jury could
reasonably find for the plaintiff." Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 252 (1986). However, any inferences from the
underlying facts must be viewed in the light most favorable to
the party opposing the motion. Matsushita Elec., 475 U.S. at
Where the material facts are undisputed, the interpretation of
an insurance policy is a question of law for the court. Blue
Ridge Ins. Co. v. Stanewich, 142 F.3d 1145, 1147 (9th Cir.
1998); Ray v. Farmers Ins. Exch., 200 Cal.App.3d 1411, 1415-16
(1988). As we explain below, in the case before us the material
facts appear undisputed. This case turns on the purely legal
question of the proper application of the Policy to the facts of
this case. Therefore, summary judgment is the appropriate vehicle
to resolve this dispute.
B. Interpretation of Insurance Policy
Construction of an insurance policy is governed by state law. The principles by which insurance contracts are interpreted under
California law are well worn, but nonetheless bear repeating.
Under California law, to resolve a question of insurance policy
interpretation, the court performs an independent review, looking
first to the language of the policy in order to ascertain its
plain meaning as a layperson would understand it. Waller v.
Truck Ins. Exchange, Inc., 11 Cal.4th 1, 18? (1995). Insurance
policies are contracts and the goal of contractual interpretation
is to determine and give effect to the mutual intention of the
parties. See Safeco Ins. Co. of American v. Robert S.,
26 Cal.4th 758 (2001). Such intent is to be inferred, if possible,
solely from the written provisions of the contract. The "proper
initial focus for resolving a question of insurance coverage is
on the language of the insurance policy itself . . ." Garriott
Crop Dusting Co. v. Superior Court, 221 Cal.Ap.3d 783, 790
(1990). The provisions in a policy are interpreted in their
"ordinary and popular" sense, unless used by the parties in a
technical sense or a special meaning is given to them by usage.
"Thus, if the meaning a layperson would ascribe to contractual
language is not ambiguous, we apply that meaning." AIU Ins. Co.
v. Superior Court, 51 Cal.3d 807, 822 (1990).
Where there is an ambiguity however, it is generally resolved
by interpreting the ambiguous provisions "in accordance with the
objectively reasonable expectations of the insured." Farmers
Ins. Exch. v. Knopp, 50 Cal.App.4th 1415, 1417 (1996). A policy
provision is ambiguous if it is susceptible to "two or more
reasonable constructions." Safeco, 26 Cal.4th at 763.
Ambiguity cannot be found in the abstract; rather, "[language in a contract
must be construed in the context of that instrument as a whole,
and in the circumstances of that case. . . ." Bay Cities Paving
& Grading, Inc. v. Lawyers' Mut. ins. Co., 5 Cal.4th 854
(1993). "Policies of insurance, like other contracts, must be
read as a whole with each part being read in conjunction with
other portions thereof." Hartford Accident and Indemnity CO. v.
Sequoia Ins. Co., 211 Cal.App.3d 1284, 1298 (1998).
"Merely because a word or term is not specifically defined does
not mean we strictly construe it against the insurer."
Fibreboard Corp. v. Hartford Acc. & Indem. Co.,
16 Cal.App.4th 492, 509 (1993). Rather, "the meaning of words . . . is always
subordinate to the meaning derived from the context, or from the
circumstances under which the word is used." Hollingsworth v.
Commercial Union Ins. Co., 208 Cal.App.3d 800, 807 (1989).
Therefore, whereas a "reliance on [the] common understanding of
language is bedrock," "[e]qually important are the requirements
of reasonableness and context." Bay Cities, 5 Cal.4th at 867;
Nationwide Mutual Insurance Co. v. Dynasty Solar, Inc.,
753 F. Supp. 853, 856 (N.D.Cal. 1990).
"An insurance company can choose which risks it will insure and
which it will not, and coverage limitations set forth in a policy
will be respected." Fidelity & Deposit Co. v. Charter Oak Fire
Ins. Co., 66 Cal.App.4th 1080, 1086 (1998) (citing Legarra v.
Federated Mutual Ins. Co. 35 Cal.App.4th 1472, 1480 (1995).
However, it is also true that coverage clauses are generally
interpreted broadly in favor of coverage, whereas coverage exclusions are interpreted narrowly. See London v. Medical
Underwriters of California, 2001 WL 1250104 at *4; MacKinnon v.
Truck Ins. Exchange, 3 Cal.Rptr.3d 228, 238 (2003). Moreover, an
exception to an exclusion is "somewhat analogous to coverage
provisions and . . . [construed] broadly in favor of the
insured." National Union Fire Ins. Co. v. Lynette C.,
228 Cal.app.3d 1073, 1082 (1991).
A. Does Exclusion (e) Apply?
Exclusion (e) of the Bond excludes all losses "resulting
directly or indirectly from the complete or partial nonpayment of
or default upon any loan, or any transaction in the nature of a
loan . . . or extensions of credit. . . ." We find that this
exclusion is unambiguous and therefore will apply it according to
its terms. In doing so, we conclude that the loss sustained by
Humboldt falls squarely within the category of risk elided from
coverage by exclusion (e).
As we have explained, it is the court's function to interpret
policy language as a matter of law where, as here, there is no
dispute as to the words used in the policy. In making such
interpretation, the court is required to do so through the eyes
of a reasonable lay person. Here, a reasonable lay person looking
at Humboldt's ATM Cash Program would conclude that the money
given to Schwartz which forms the basis of this action was "in
the nature of a loan" or an "extension of credit." As we have
detailed, Humboldt agreed to let Schwartz make a productive use
of its money in exchange for a fixed rate on the amount of money used in
addition to other set fees and charges. See Ex. C to Barkley
Decl. Schwartz was required to fill out an application that asked
for many of the same materials requested in Humboldt's Business
Loan Application. See Exs. 39, 40 to Valeriano Decl. Upon
termination of the agreement or the request of Humboldt, Schwartz
agreed to immediately return the full amount of any outstanding
advances or pay interest at a rate of 18% on such amounts.
Looking at these factors, as well as the relationship as a whole,
it appears commonsensical that this money was, at the very least,
"in the nature of a loan" or an "extension of credit."
"It is well settled that in order to construe words in an
insurance policy in their `ordinary and popular sense,' a court
may resort to a dictionary." Jordan v. Allstate Ins. Co.,
11 Cal.Rptr.3d 169, 177 (2004) (citing Scott v. Continental Ins.
Co. 44 Cal.App.4th 24, 29 (1996); Stamm Theatres, Inc. v.
Hartford Casualty Ins. Co. 93 Cal.App.4th 531 (2001). The basic
dictionary definition of "loan" is as follows: "money lent at
interest," or "something lent for the borrower's temporary use on
condition that it or its equivalent be returned," or "the grant
of temporary use made by a lender." Webster's Third New
International Dictionary, G&C Merriam Co. 1976, p. 1326.
"Credit" is defined as "the balance in a person's favor in an
account; an amount or limit to the extent of which a person may
receive goods or money for payment in the future," or "an amount
or sum placed at a person's disposal by a bank. . . ." Id. at
p. 532. Finally, a court that has considered exclusion (e) has
stated that a loan is "a contract by which one delivers a sum of money to another and the latter
agrees to return at a future time a sum equivalent to that which
he borrows." IBM Poughkeepsie Employees Federal Credit Union vs.
Cumis Insurance Society, 590 F. Supp. 769, 775 (S.D.N.Y. 1994).
Applying such definitions to the facts of this case, the Court
finds that the CSA between Direct Connect and Humboldt was
structured in the "nature of a loan" or an "extension of credit."
The Court's decision here is also consistent with the
underlying intent and purpose of exclusion (e). As one
commentator has stated, financial bonds in general allocate the
risks of loss between an insurer and the financial institution:
It is a compromise between insuring against certain
risks and providing that coverage at a reasonable
premium. To achieve this, credit risks (a natural
result of lending money) stay with the financial
institution. The loan exclusion accomplishes this
goal by sweeping away all loan losses caused by
fraud, no matter how pervasive the fraud, unless the
loss falls within one of the narrow exceptions to the
Karen Kohler Fitzgerald, Financial Institution Bonds 293 (Clore
ed.2d ed. 1998 American Banking Association "ABA"). In
discussing exclusion (e), the ABA has also stated that:
Losses from non-payment of loans or other extensions
of credit are often connected with false pretenses
used when the loan or credit was obtained. However,
Section 2(e) excludes such losses unless they are
covered by employee dishonesty or forgery insuring agreements.
ABA "Digest of Bank Insurance," 6th ed. 1991. Thus, it seems
clear that exclusion (e) is intended to eliminate coverage for
losses caused by bad loans or credit extensions. Exclusion (e) is
in place because the writer of a bond does not want to be
responsible for the actions of third-party borrowers. Here,
Humboldt entrusted a third-party with temporary use of its money
and suffered a loss when that person defaulted on the obligation
to repay. We find that this is within the category of risk
exclusion (e) meant to eliminate from coverage under the Bond.
Humboldt advances two primary arguments to convince the Court
that this money does not fall within exclusion (e). First,
Humboldt argues that a review of its internal accounting and
financial reporting procedures demonstrates that Humboldt did not
view or ever treat this transaction as a loan. See Humboldt's
Opp. at 8, 13. Humboldt asserts that it never reported the
revenue from the ATM Program as loan income, but rather, listed
it in the general ledger as a cash entry. Further, Humboldt
claims that its treatment of the ATM Program as a non-loan
investment is consistent with standard practices in the banking
industry, and that, "A determination that these programs
constitute a loan would be completely contrary to the manner in
which they are viewed, handled and reported to regulators by the
banking industry." Id. at 13.
While this argument is somewhat compelling, we do not think it
of such force to override the plain meaning of exclusion (e). Exclusion (e) is written broadly to include much more than just a
"loan" as defined by banking industry standards. It also includes
everything "in the nature of a loan" or an "extension of
credit." Ex. C to Barkley Decl. (emphasis added). Moreover,
"whether a particular transaction falls within [exclusion (e)] is
determined by its economic substance, not by the labels attached
to it by the insured and third party dehors the insuring
agreement." Resolution Trust Corp. v. Aetna Casualty and Surety
Co., 25 F.3d 570, 578 (7th Cir. 1994). For the reasons discussed
above, we find that the economic substance of this transaction
has enough characteristics of a loan or an extension of credit to
make exclusion (e) applicable. Exclusion (e) is written clearly
and broadly to shift the risk to the insured for losses resulting
from the default of any loan or transaction that functions as a
loan. We cannot and will not rewrite the terms of the Bond to
conform to the expectations of the banking industry.
Second, Humboldt argues that this transaction cannot be
considered a loan because Humboldt always maintained, pursuant to
the CSA, exclusive ownership and control of the subject funds.
While it is true that the CSA grants Humboldt title and control
over the money, this element does not preclude the Court from
finding that this transaction was "in the nature of a loan."
There is no authority for the proposition that a bank must
relinquish possession or control over funds before exclusion (e)
can apply. This is merely one of several factors considered by
the Court, and in the end we determine that the overriding
substance of this transaction is such that exclusion (e) is applicable. Moreover, Humboldt's argument here is belied by the
fact that regardless of what the CSA states, it allowed Schwartz
a significant amount of physical control and possession over the
money. For all of these reasons, we find this argument
B. Was Schwartz or Schwaz Armored LLC an Employee of
In an effort to reinstate coverage, Humboldt tries to invoke an
exception to exclusion (e) by arguing that Schwaz Armored was an
"employee" of Humboldt.*fn2 Complaint, ¶ 26. Essentially,
Humboldt claims that Schwaz Armored acted as an "electronic data
processor . . . of accounting records" because it was required to
prepare and send to Humboldt an Inventory Summary each time it
replenished the ATMs with cash. To prepare the Inventory Summary,
Schwaz Armored would review the tapes inside the ATMs and report
how much money had been taken out and/or replenished. See Ex. B
to Ambrosini Decl. This form was then faxed to Humboldt. Humboldt
claims that this function makes Schwaz Armored an employee of the
bank under the "electronic data processor" definition. The Court disagrees, finding that it would be
illogical to read this provision so broadly.
In addressing Humboldt's claim the Court again starts with the
plain language of the Policy as understood by a reasonable
layperson. The subsection of the definition of employee that
Humboldt attempts to invoke here is as follows:
(g) any natural person and any organization
authorized by the Insured to perform services for the
Insured as electronic data processor of checks or
negotiable orders of withdrawal or other accounting
records of the Insured (hereinafter called
"Processor") while performing such services. . . . A
Federal Reserve Bank or clearing house, and customers
of the Insured, shall not be deemed to be Processors.
Complaint, Ex. C. After reviewing this provision, we find
Humboldt's interpretation implausible. Schwaz Armored simply was
not engaged in the "processing" of electronic data. As explained
above, Schwaz Armored merely recorded the balances for particular
ATMs on a standard form and faxed that form to Humboldt. This was
at best a subsidiary function for Schwaz Armored, whose primary
responsibility was to safely transport currency. The Court cannot
find that this reporting duty is tantamount to "data processing",
as that term is used in this section. If the Court were to adopt
Humboldt's position then every person who supplied the bank with
accounting information would qualify as an employee under the
Policy. It is readily apparent that the Policy is not so broad.
Properly understood in the context of this section and the Policy as a whole, the Court finds that preparation of an Inventory
Summary form does not convert Schwaz Armored into an "electronic
data processor of . . . accounting records. . . ."
C. Claim for Breach of Implied Covenant of Good Faith and Fair
We now turn to Gulf's motion for summary judgment on Humboldt's
claim for breach of the implied covenant of good faith and fair
dealing. Gulf argues that its interpretation of the Policy and
its handling of Humboldt's claim was reasonable as a matter of
law and therefore it is entitled to summary judgment on this
"While the reasonableness of an insurer's claims handling
conduct is ordinarily a question of fact, it becomes a question
of law where the evidence is undisputed and but one inference can
be drawn from the evidence." Carlton v. St. Paul Mercury Ins.
Co., 30 Cal.App.4th 1450, 1456 (1994). "The key to a bad faith
claim is whether or not the insurer's denial of coverage was
reasonable. Under California law, a bad faith claim can be
dismissed on summary judgment if the defendant can show that
there was a genuine dispute as to coverage. . . ." Guebara v.
Allstate Insurance Company, 237 F.3d 987, 992 (9th Cir. 2001).
As stated by the court in Hubka v. Paul Revere Life Insurance
The genuine issue rule . . . allows a district court
to grant summary judgment when it is undisputed or
indisputable that the basis for the insurer's denial
of benefits was reasonable for example, where even
under the plaintiff's version of the facts there is a genuine issue as to the insurer's liability under
California law. . . . On the other hand, an insurer
is not entitled to summary judgment as a matter of
law where, viewing the facts in the light most
favorable to the plaintiff, a jury could conclude
that the insurer acted unreasonably.
215 F.Fupp.2d 1089, 1092 (S.D.Cal. 2002).
In the instant case we find it is indisputable that Gulf's
denial of coverage was reasonable. The Court finds that Gulf's
interpretation of the Policy and its handling of Humboldt's claim
was reasonable as a matter of law and, accordingly, summary
judgment will be granted in favor of Gulf on this claim.
Based on the foregoing discussion, Humboldt's motion for
summary adjudication is HEREBY DENIED and Gulf's motion for
summary judgment is HEREBY GRANTED.
IT IS SO ORDERED.