Michael Keeley

Experience

• Currently represents insurer in lawsuit in federal court involving allegations that the former head of the board of trustees of a university in Turkey conspired to steal $18 million from the university.
• Currently represents insurer in claim seeking recovery of over $30 million from an employee’s alleged conspiracy with outside contractors.
• Currently represents insurers in multiple lawsuits through out the United States seeking tens of millions of dollars resulting from alleged employee thefts.
• Currently represents insurer in federal court in Virginia involving a hacking claim resulting from a well-known Russian cyber-crime group that sent phishing emails to the bank, leading to millions of dollars of withdrawals from ATMs around the world. The National Bank of Blacksburg v. Everest National Insurance Co.; No. 7:18-cv-00310-GEC (W.D. Virginia).
• Currently represents insurers in a vendor fraud lawsuit in state court in which the insured seeks computer fraud coverage resulting from fraudulent invoices sent via emails. Westlake Chemical Corp. v. Berkley Regional Insurance Co. and Zurich American Insurance Co.; No. 2017-43569 (Harris County, Texas).
• Successfully represented insurer in appeal of significant employee dishonesty loan loss case. In Renasant Bank v. St. Paul Mercury Insurance Co., 17-60168, 2018 U.S. App. LEXIS 2903 (5th Cir. Feb. 6, 2018), the Fifth Circuit Court of Appeals was asked to rule that the financial benefit requirement of the Financial Institution Bond issued to the bank was unenforceable because the bond was a “statutory bond” that failed to comply with a Depression-era Mississippi statute requiring bank employees to obtain a surety bond against acts of dishonesty without any conditions to coverage. In a noteworthy opinion for the insurance industry, the Fifth Circuit disagreed, relying upon a number of articles written by Mr. Keeley in concluding that the requirements of the policy helped to preserve the distinction between fidelity insurance and credit insurance. The opinion also is significant because only three other decisions had previously addressed this issue.
• On the eve of trial in federal court in Los Angeles, Mr. Keeley and a team of lawyers in Strasburger’s Insurance Practice Group obtained summary judgment in a complicated and hard-fought lawsuit in which Strasburger’s insurance client had denied coverage for a significant claim on the basis of the War Exclusion of the policy. NBCUniversal was in the process of filming a television show in Israel when an extended military conflict erupted between Israel and Hamas. NBCUniversal moved filming to Croatia and New Mexico, and sought coverage under a media insurance policy for loss due to imminent peril. NBCUniversal argued its losses were covered because the conflict involved terrorism, not War. Keeley and his team were able to side step the many political implications of the case and persuade the court that the conflict amounted to a War, resulting in a complete defense judgment. While the case was not one of first impression, there are very few cases in the history of American jurisprudence involving the War exclusion, so the lawsuit presented challenging legal issues in addition to a true battle with NBCUniversal and its counsel. UCP, et al. v. Atlantic Specialty Insurance Co., No. 2:16-cv-04435-PA (C.D. Cal. June 2, 2017).
• Represented the Surety & Fidelity Association of America as Amicus Curiae in helping to persuade the Fifth Circuit to reverse and render for the insurer following the trial court’s erroneous decision to grant summary judgment that the insured’s losses were covered under the Computer Fraud Insuring Agreement of a commercial crime insurance policy. Apache Corp. v. Great American Ins. Co., 662 F. App’x 252 (5th Cir. 2016). This decision has since been the subject of numerous legal articles and has been relied on by courts in holding that losses for similar social engineering claims are not covered under commercial crime policies. For example, see Am. Tooling Ctr., Inc. v. Travelers Cas. & Sur. Co. of Am., No. 16-12108, 2017 U.S. Dist. LEXIS 120473 (E.D. Mich. Aug. 1, 2017).
• Represented commercial crime insurer in several-week trial in New York state court involving investment advisors’ claims for significant losses resulting from Bernie Madoff Ponzi scheme, as well as bad faith claims, resulting in a complete defense verdict. U.S. Fire Ins. Co. v. Nine Thirty FEF Investments, LLC, 17 N.Y.S.3d 118 (N.Y. App. Div. 2015). Mr. Keeley successfully handled the appeal of the trial court’s decision.
• Represented insurers in complex coverage lawsuit filed by over thirty banks in Minnesota involving multi-million dollar Louis Pearlman Ponzi scheme, obtaining summary judgment that was affirmed by the Minnesota Court of Appeals: Alerus Financial National Association v. St. Paul Mercury Ins. Co., No. A11-680 (Minn. App. 2012).
• Represented insurer in commercial general liability coverage litigation in California in which plaintiffs sought in excess of $100 million in damages involving identity theft and Ponzi scheme, obtaining summary judgment on both duty to defend and duty to indemnify and recovering several million in defense costs previously advanced, with decision being affirmed by the California Court of Appeals: Chicago Title Ins. Co. v. St. Paul Mercury Ins. Co., No. B221489 (Cal. App. 2011).
• Represented insurers in class action lawsuit filed in state court alleging multiple violations of the Texas non-subscriber statue and seeking to invalidate coverage under 73 separate insurance policies involving coverage of hundreds of millions of dollars. Successfully argued issues of first impression in order to remove lawsuit to federal court under the Class Action Fairness Act despite non-diverse defendants and non-federal question jurisdiction and defeated putative class plaintiffs’ multiple efforts to remand case to state court, leading to a de minimus settlement of entire lawsuit.
• Represented fidelity bond insurers in litigation in New York involving claims by investors in the Bernie Madoff Ponzi scheme, obtaining partial summary judgment on coverage and bad faith issues.
• Represented insurer in complicated and far reaching employee dishonesty claim involving the alleged purchase of illegal tax credits in Sao Paulo, Brazil, with numerous depositions taken in Brazil and Argentina.
• Represented excess insurer in complicated coverage lawsuit filed by a bank in Tennessee seeking over $50 million in damages arising from a massive Ponzi scheme involving fraudulent warehouse loans, obtaining summary judgment that was affirmed by the Sixth Circuit. Union Planters Bank, N.A. v. Continental Casualty Co., 478 F.3d 759 (6th Cir. 2007).
• Represented insurer in litigation involving technology errors and omissions policy, obtaining summary judgment which was affirmed by Fifth Circuit. SingleEntry.com, Inc. v. St. Paul Fire & Marine Ins. Co., 330 F. Supp. 2d 827 (W.D. Tex. 2003), aff’d, 117 Fed. Appx. 933 (5th Cir. 2004).
• Represented insurer in litigation inn Florida filed by Taylor, Bean & Whitaker Mortgage Corp. seeking to recover alleged losses arising out of massive fraudulent scheme alleging involving Lee Farkas.
• Represented a fidelity bond insurer in obtaining a cost of defense settlement resulting from a complex and far-reaching fidelity bond scheme in Aberdeen, Scotland.
• Represented the primary fidelity bond insurer in lawsuit in federal court in connection with the fidelity bond claim submitted by Enron Corporation.
• Represented D&O insurers in HealthSouth, Enron and WorldCom claims.
• Represented insurer in employee dishonesty scheme involving the alleged theft of titanium from company based in England.
• Represented primary insurer in multi-party litigation in Nevada involving alleged fraudulent scheme by 1031 Tax Exchanger to embezzle exchanger funds for alter ego’s own personal use.
• Represented architects’ and engineers’ insurer in rescission action in U.S. District Court in Phoenix, Arizona, involving a construction project at Phoenix Sky Harbor International Airport.
• Represented surety in a lawsuit in state court in San Antonio, Texas, in which the estate of a mother and child killed in an automobile accident is suing various parties, including the firm’s client, as the completing surety.
• Represented insurer in a complex coverage dispute in which the bank allegedly lost multi-millions of dollars resulting from an employee embezzlement scheme involving Chinese nationals.
• Represented sureties in various performance and payment bond disputes throughout Texas, including an alleged default involving the Ellis County Courthouse in Waxahachie, Texas, as well as other governmental projects throughout the state.
• Represented surety in prosecuting a qui timet and exoneration claim against principal and indemnitors in a large performance bond dispute in Bexar County, San Antonio, Texas.
• Represented the American Insurance Association in preparing an amicus brief and successful appeal by surety, leading to an opinion that a surety does not owe a duty of good faith and fair dealing to its principal. Associated Indem. Corp. v. C.A.T. Contracting, 964 S.W.2d 276 (Tex. 1998).
• Represented insurer in obtaining important opinion that generic notice by the Federal Deposit Insurance Company does not comply with the notice provisions of a directors and officers insurance policy. McCullough v. Fid. & Dep. Co. of Maryland, 2 F.3d 110 (5th Cir. 1993).
• Represented insurer in landmark decision ruling that regulatory and insured v. insured exclusions of a directors and officers liability policy do not violate public policy. Fid. & Dep. Co. of Maryland v. Conner, 973 F.2d 1236 (5th Cir. 1992).
• Represented insurer in obtaining important decision that constructive notice does not suffice under a directors and officers insurance policy. FDIC v. Barham, 995 F.2d 600 (5th Cir. 1993).
• Represented insurer in obtaining important decision that majority shareholders and directors of a bank do not have standing to seek recovery for losses under a financial institution bond. Warfield v. Fid. & Dep. Co., 904 F.2d 322 (5th Cir. 1990).
• Represented fidelity bond insurer in obtaining ruling that Kansas law does not recognize a tort for bad faith refusal to pay a fidelity bond claim. RTC v. Fid. & Dep. Co. of Maryland, 885 F. Supp. 228 (D. Kan. 1995).
• Represented insurer in successfully obtaining a summary judgment finding that, despite fact that the bank’s president had made un-creditworthy loans to friends and family members under suspicious circumstances, the president did not have the manifest intent to cause the bank to sustain a loss. Progressive Cas. Ins. Co. v. First Bank, 828 F. Supp. 473 (S.D. Tex. 1993).

Books Edited

• Editor. The Financial Institution Bond and Commercial Crime Policy: Principles and Annotations (ABA Press 2023)
• Editor. Handling Fidelity Bond Claims, 3d ed. (ABA Press 2019)