Fear Not Law Articles: AUGUST ENTERTAINMENT, INC v. PHILADELPHIA INDEMNITY INSURANCE COMPANY PART II

AUGUST ENTERTAINMENT, INC v

AUGUST ENTERTAINMENT, INC v. PHILADELPHIA INDEMNITY INSURANCE COMPANY

Filed 1/8/07

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION ONE

AUGUST ENTERTAINMENT, INC.,

Plaintiff and Appellant,

PHILADELPHIA INDEMNITY INSURANCE COMPANY,

Defendant and Respondent.

B184276

(Los Angeles County

Super. Ct. No. BC322754)

STORY CONTINUED FROM PART Iâ€¦â€¦

A similar analysis applies in this case. If we accept August Entertainment's line of reasoning, D& O insurers could be held liable for corporate debts based on the way in which an officer signs a contract on behalf of the corporation, for example, by failing to include â€

Description	Directors and officers liability policy does not cover a breach of contract claim where an officer entered into a contract without stating that he was acting on behalf of the corporation. Where payment of the underlying debt is not insured by the policy, failure to pay it is not a wrongful act to which coverage applies.
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