STANLEY J. ROSZKOWSKI, UNITED STATES DISTRICT JUDGE
This action comes before the court for ruling on cross-motions for summary judgment. For the reasons set forth herein, the court grants Plaintiff's motion for summary judgment and denies Defendant's motion for summary judgment. No dispute as to the facts surrounding this matter exists.
Plaintiff, Alpine State Bank, is a corporation incorporated under the laws of the State of Illinois and has its principal place of business in Rockford, Illinois. Defendant, Ohio Casualty Insurance Company, is a corporation incorporated in the State of Ohio and has its principal place of business in Hamilton, Ohio. Jurisdiction over this action is based upon 28 U.S.C. § 1332.
Defendant issued a financial institution bond covering Plaintiff for the period August 19, 1985 through August 19, 1988. Section (D)(1) of the bond provided that Defendant would cover Plaintiff for any loss resulting directly from forgery. Forgery was defined in Section (1)(h) of the bond as "the signing of the name of another with intent to deceive." Section (B)(1) of the bond provided that Defendant would cover Plaintiff for any "loss of property resulting directly from . . . theft, false pretenses, common law or statutory larceny, committed (sic) by a person present in an office or on the premises of the Insured, while the Property is lodged or deposited within offices or premises located anywhere." Finally, Section 2(o) of the bond dealt with exclusion provisions under the bond. This section provided that the bond did not cover:
loss resulting directly or indirectly from payments made or withdrawals from a depositor's account involving items of deposit which are not finally paid for any reason, including but not limited to Forgery or any other fraud, unless such payments or withdrawals are physically received by such depositor or representative of such depositor who is within the office of the insured at the time of such payment or withdrawal, or except when covered under Insuring Agreement (A).
From July 1, 1985 through April of 1986, Plaintiff's customer, William T. Secrest, was the owner of account number 58-070-8. Secrest was employed by Rockford Fluid Power International, Inc. (hereinafter "Rockford") as the vice-president of marketing. Secrest was also a ten percent owner of the corporation. During this time period, Rockford received numerous checks in their course of business and was the designated payee on all of the checks involved here. Secrest endorsed the checks involved in this case by using a rubber stamp which read "for deposit only-account number 58-070-8" and the checks were deposited into Secrest's own personal account. Secrest, in fact, had no authority to deposit these checks into his own account. As a result, Secrest was convicted under 18 U.S.C. § 371 of conspiring to defraud a United States agency. Plaintiff now seeks recovery under the bond from Defendant for the wrongfully deposited checks and the subsequently paid out money.
Defendant denies coverage under the bond for the loss. Defendant argues that Section (D)(1) is not applicable in this case because Plaintiff's loss is not the result of forgery as defined by the bond. Defendant contends that the rubber stamp was not a "signature" endorsement as required by the terms of the bond. Moreover, Defendant contends that Secrest's actions were not forgery in that Secrest did not sign the name of another, but rather stamped his own bank account number on the checks in question. As such, it is Defendant's position that any writing or mark that represents the person who actually executed the writing or mark cannot constitute a forgery. Defendant contends that Secrest's actions constitute a "false assumption of authority" rather than a "forgery."
Defendant further argues that Section (B)(1) is also not applicable in this case. While this section does insure against the loss of property taken through theft or false pretenses, the bond has a $ 10,000.00 deductible in this regard. Defendant states that its understanding is that the cash received by Secrest on the Plaintiff's premises did not exceed $ 10,000.00.
Plaintiff argues, on the other hand, that it is entitled to coverage under the bond for the loss sustained because a rubber stamp does constitute a "signature" within the meaning of the bond. Plaintiff cites Webster's Dictionary, the Uniform Commercial Code and common practice for the proposition that a rubber stamp is considered a "signing". Moreover, Plaintiff argues that the fact that the individual endorsing the checks was not the proper payee goes to show that a forgery occurred.
Plaintiff also argues that under Section (B)(1) of the bond, it is entitled to coverage for the loss incurred. Plaintiff contends that Secrest deposited the checks under false pretenses after stealing them from the rightful owner. Accordingly, Section (B)(1) applies and coverage should be extended to Plaintiff.
This court will not grant any summary judgment motion unless all of the pleadings and supporting documents, if any, indicate that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S. Ct. 2505, 2513, 91 L. Ed. 2d 202 (1986); Fitzsimmons v. Best, 528 F.2d 692, 694 (7th Cir. 1976). A dispute about a material fact is "genuine" if the evidence is such that a reasonable jury could return a verdict for the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S. Ct. 2505, 2513, 91 L. Ed. 2d 202 (1986). The district court, however, is not required to evaluate every conceivable inference that can be drawn from evidentiary matters, but only reasonable ones. Parker v. Federal National Mortgage Association, 741 F.2d 975, 980 (7th Cir. 1984).
Contract actions involve State-created rights. When a federal court sitting in diversity deals with State-created rights, the federal court is, "in substance only another court of the State." Bernhardt v. Polygraphic Company of America, 350 U.S. 198, 203, 100 L. Ed. 199, 76 S. Ct. 273 (1956). The contract between Alpine State Bank and Ohio Casualty Insurance Company took place in Illinois. Accordingly, Illinois law governs this case. Erie Railroad Co. v. Tompkins, 304 U.S. 64, 58 S. Ct. 817, 82 L. Ed. 1188 (1938).
The first issue the court is called upon to decide is whether the rubber stamp used by Secrest constitutes a signature endorsement within the meaning of the bond. Chapter 26 of Illinois Revised Statutes is the Illinois Commercial Code. Paragraph 3-401(2) defines "signature" as the "use of any name, including any trade or assumed name, upon an instrument, or by any word or mark used in lieu of a written signature." Paragraph 1-201(39) defines "signed" as "any symbol executed or adopted by a party with present intention to authenticate a writing." Finally, the Second District Court of Illinois in People v. Stephens, 12 Ill. App. 3d 215, 297 N.E.2d 224, 226 (1973), cited Black's Law Dictionary, 4th Ed., p. 1553 in defining signature. The definition reads: "A 'signature' may be written by hand, printed, stamped, typewritten, engraved, photographed or cut from one instrument and attached to another. . . ." With these definitions in mind, the court finds that the rubber stamp used by Secrest on the back of the checks constitutes a signature endorsement. The question then becomes whether the signature endorsement by Secrest constitutes a forgery.
In deciding the meaning of forgery as it is used in insurance policies, most courts have looked to the criminal law. Illinois Revised Statutes, chapter 38, paragraph 17-3 defines forgery as follows:
(a) A person commits forgery when, with intent to defraud, he knowingly: