The opinion of the court was delivered by: Joan B. Gottschall United States District Judge
MEMORANDUM OPINION AND ORDER
Plaintiffs Aldridge Electric, Inc., Aldridge Electric, Inc. Profit Sharing Plan, Kenneth Aldridge, and Kevin Breen (collectively "Aldridge") filed suit against defendant Fidelity and Deposit Company of Maryland ("Fidelity"), alleging breach of contract under two alternative theories. Presently before the court are Aldridge's motion for summary judgment or, in the alternative, for summary judgment as to liability alone and Fidelity's cross-motion for summary judgment. For the reasons set forth below, Aldridge's alternative motions for summary judgment are denied and Fidelity's cross-motion for summary judgment is granted.
The facts in this case are not in dispute. Aldridge Electric, Inc. ("Aldridge Electric") is an Illinois electrical contracting corporation that maintains an employee benefits plan, the Aldridge Electric, Inc. Profit Sharing Plan (the "Plan"). The Third Party Administrator of the plan at all times relevant to this case was Reed-Ramsey, Inc. ("Reed-Ramsey"). On February 3, 2005, Fidelity issued a Commercial Crime Coverage Policy, No. CCP 0000695B, (the "Policy") to Aldridge, insuring it for up to $500,000 against any occurrence of employee dishonesty. The Policy also specified a $2,500 dollar deductible for each occurrence of employee dishonesty.
More specifically, coverage under the Policy applied to money, securities, and property other than money and securities. "Employee dishonesty" is defined under the Policy as:
[D]ishonest acts committed by an "employee", whether identified or not, acting alone or in collusion with persons except you or a partner, with the manifest intent to:
(1) Cause you to sustain loss; and also
(2) Obtain financial benefit (other than employee benefits earned in the normal course of employment, including: salaries, commissions, fees, bonuses, promotions, awards, profit sharing or pensions) for:
b. Any person or organization intended by the "employee" to receive that benefit.
Pl.'s LR 56.1 St. of Material Facts, Ex. K. The policy also defines an "occurrence" of employee dishonesty as: "[A]ll loss caused by, or involving, one or more 'employees', whether the result of a single act or series of acts." Id.
Evelyn Lopez ("Lopez") was employed by Aldridge Electric as a payroll clerk and, from 1994 to 1998, as an executive assistant; a small portion of her time was spent acting as the in-house administrator of the Plan. Pl.'s LR 56.1 St. of Material Facts ¶ 11. Lopez had broad responsibilities with respect to this latter duty, including communicating with Reed-Ramsey, intake of employee data, assisting employees with loans, distributing participant account statements, maintaining the Plan checking account (including the drafting of checks), and other administrative tasks. Id. at ¶ 12.
Between 1995 and 2003, Lopez wrongfully diverted monies, eventually totaling approximately three and a half million dollars, from the Plan to herself. Id. at ¶ 61. Lopez perpetrated this embezzlement scheme via two distinct methods. In one, she engineered a false loan application and promissory note from a Plan participant and drew up a check for the loan amount, either forging the signature on the check or wrongfully using a signature stamp to which she had access. Id. at ¶ 48. Lopez then directed the amount of the loan to herself, sometimes paying the loan back and sometimes allowing it to default. Id. Lopez then altered the Reed-Ramsey participant statements to reflect the amount that would have been in the participant's account had the "loan" not been taken out. Id. In the second scheme, Lopez falsely reported to Reed-Ramsey that a Plan ...