Obtained a defense verdict in the U.S.D.C. for the Southern District of New York. ​Our insurance company client adjusted a burglary loss of roughly $1.3 million and wired the proceeds directly to the insured rather than to the bank named as a loss payee on the policy. The bank had a security interest in the stolen inventory and was owed more than $2 million by the insured. Upon receipt of the proceeds, the principal of the insured abandoned his business (and his wife, who was a co-guarantor of the insured’s indebtedness to the bank) took the money and fled the country. With prejudgment interest, the case presented a $1.5 million extra-contractual exposure to the insurance company. The primary issue was whether an ambiguous one-line email message sent by a bank employee to the insured, and forwarded by the insured to the insurer, constituted a waiver of the bank’s right to receive the insurance proceeds. The burden was on the insurer to prove that: (1) the bank employee who sent the email knew sufficient facts about the adjustment of the loss to waive the bank’s rights; (2) her email was intended by her to be a waiver of the bank’s rights; and either (3) she had actual authority to send that message (notwithstanding that she was fired for sending it), or (4) the bank cloaked her with apparent authority to waive its rights, and, also, (5) the insurer’s reliance on her email message, as forwarded by the insured, was reasonable. The court ruled in our favor.