Bill Barr, Lenhard Johnson, Robert Corkle, Ed Crawley, Ken Thaxton, Harold Kelloff, John Shuster, Dale Duncan, and George Pennington, Plaintiffs-Appellants, v. Colorado Insurance Guaranty Association and Western Guaranty Fund Services, a Colorado corporation, Defendants-Appellees., 926 P.2d 102

Summary

The directors approved a loan for the purchase of grocery stores, without first researching the borrower's background. The borrower defaulted on the loan, causing the corporation to file for bankruptcy. The corporation brought claims on behalf of the corporation against the directors for the losses that arose from the loan. The directors were insured under a liability policy. After the loan was made, the insurance agency was declared insolvent. The directors settled the claims before trial. Thereafter, each director made a claim to the insurance company to recover his individual loss. The insurance company denied the claims and the directors filed an action. The trial court ruled that the directors' claims were one covered claim pursuant to the Colorado Insurance Guaranty Association Act (Act), Colo. Rev. Stat. § 10-4-503(4) obligating the insurance company to pay only the statutory limit for the one claim. The court affirmed and held that because the policy clearly stated that a ...