Klein v. Fidelity & Deposit Co. of America

SALMON, Judge. . The major challenge presented in this case is to interpret correctly the meaning of the term “claim” as used in a “claims made” directors’ and officers’ liability insurance policy. 1 ³¹⁹ The dispute that gives rise to this issue had its origin in the 1985 Savings and Loan debacle, which ultimately cost Maryland taxpayers over $125,000,000. 2 One of the largest Maryland savings and loan associations that suffered severe financial difficulties in 1985 was the Merritt Commercial Savings & Loan Association (“Merritt”), formerly known as Merritt Savings and Loan, Inc. At all times here relevant, Merritt was a wholly owned subsidiary of Middle States Financial Corporation (“Middle States”). Gerald S. Klein (“Klein”) held all outstanding shares of stock in the holding company that owned Middle States. Klein, in turn, controlled numerous other corporations and partnerships in Maryland, many of which were subsidiaries of Merritt.

In 1983, Fidelity Deposit Company of Maryland (“Fidelity”) issued a $3,000,000 “Directors and Officers Liability Insurance Policy” (“D & O policy”) to Merritt. The D & O policy covered two of Merritt’s subsidiaries, Institutional Service Corp. and Merritt Capital Corp., along with some twenty-two subsidiaries of either Institutional Services Corporation or Merritt Capital Corporation. The policy was for “claims made” during the period between August 12, 1983, and October 14, 1986. 3 Under Paragraph 6 of the D & O policy, if the insured received a notice of contemplated claim within the policy period and gave notice of the potential claim to the insurer, that potential claim was to be treated as covered in ³²⁰ the event that a claim was later made against directors or officers of the insured. Klein, one of the appellants, was the President of Merritt and the Chairman of Merritt’s Board of Directors at the time Fidelity’s D & 0 policy was issued.

He continued as an officer and director until November 26, 1984. Thereafter, he asserted personal control over most of the important aspects of Merritt’s operations. Due to “extreme liquidity pressures” and because depositors had lost confidence in privately insured savings and loans associations in Maryland, Merritt entered into a voluntary conservatorship effective May 13,1985. The Maryland Deposit Insurance Fund Corporation (“MDIF”) was appointed by the court to be Merritt’s conservator.

The conservator immediately limited withdrawals to $1,000 per account per month. On June 20, 1985, the Circuit Court for Baltimore City eliminated all withdrawals from Merritt to continue until September 20,1985, or until changed by the court. A. THE FOUR NOTICE LETTERS In regard to the crisis at Merritt, Fidelity received four letters that are important to our narrative. Of the four letters, only the first, the Trice letter, was sent to any of the appellants. 1.

The Trice Letter In 1985, Paul Trice was a Senior Vice President of Maryland Savings Share Insurance Corporation (“MSSIC”), the predecessor of MDIF. He wrote a letter to Klein on May 2, 1985, and complained about a number of serious problems his office had found with scores of loans made by Merritt. Mr. Trice complained, for example, that Merritt had lent Delmarva Venture Corporation (“Delmarva”) a total of $9,240,710, even though Klein indirectly owned Delmarva through a holding company and was a “controlling person” within the meaning of Maryland Code Annotated, Financial Operations section 9-323(e)(3). That section, in 1985, required that loans to a “controlling person” must be approved by the Division Di ³²¹ rector of the Division of Savings and Loan Associations.

No such approval was in Mr. Trice’s files, and he demanded a complete explanation for the “violation of section 9-323(e)(3) ... along with a plan for the immediate removal of these loans from Merritt with no loss thereto.” After listing many other violations, or purported violations, of banking laws or regulations by Merritt, Mr. Trice concluded his fifteen-page letter by saying: In summary, the nature and volume of the items noted above is of paramount concern to this Corporation. Underlying these comments, obviously, are numerous major issues such as the question of independence of Merritt Commercial’s board of directors from influence by its stockholder; the apparent lack of adequate internal controls and adequate underwriting in major investments; the concentration of large dollar investments — direct or by loans — in three (3) geographic locations and the timely recovery of these funds without loss to Merritt in the current economy; the ability of Merritt Commercial to complete funding and effect recovery of its major loans and investments in the current environment and marketplace (vis-a-vis Merritt’s current and near term liquidity and borrowing posture, savings flows, etc.); the apparent disregard for various statutes and regulations designed to maintain safety and soundness, thereby affording a degree of protection of the saving public’s monies and enabling maintenance of integrity and viability in the MSSIC insured industry; etc. In view of the magnitude of all the above, we are compelled to require that you, the board of directors of Merritt and its senior management officers such as Dennis Finnegan present yourselves in the offices of the Corporation on May 13, 1985 at 10:00 A.M. for the purpose of presenting for our preliminary review, your written responses to each of the matters noted herein. There can not and will not be any further extensions for this meeting or written response to these issues. ³²² 2. The Robinson Letter Zelig Robinson, Esquire, wrote to Fidelity on July 9, 1985, on behalf of the current and former directors and officers of Merritt, including Klein.

His letter concerned “potential claims, which may arise under” Merritt’s D & 0 policy. Mr. Robinson said: This notice, including the Exhibits, describes certain events and transactions in which Merritt and/or its direct and indirect wholly or partially owned subsidiaries (“subsidiaries”) engaged, and in which some or all of the insureds were involved, which could possibly result in claims against the insureds on the basis that such events and transactions gave rise to .the occurrences referred to above. ... it is conceivable that, with the benefit of hindsight, claims may be made by frustrated depositors, creditors, or others against the insureds based upon the following as well as other transactions, events and circumstances, most of which are set forth in the following Exhibits, for the reasons specified, among others. Accordingly, we believe that under the terms of the above-referenced policy we are obligated to call your attention to any such potential claims. In view of the occurrences beginning in May 1985, we hereby notify you pursuant to Section 6 of the policy that claims, including those referred to above, may be made against the insureds in respect of one or more of the transactions set forth in the following Exhibits.

This submission, however, is not and shall not be construed as an admission of any wrongdoing or irregularity; this submission is made solely for the purpose of notifying you, in accordance with the terms of the policy, of the possibility that claims may be made against the insureds. (Emphasis added.) Mr. Robinson’s letter goes on to summarize, in broad outline form, numerous claims that the writer believed might be brought by others against his client. ³²³ 3. The Thieblot Letter Robert J. Thieblot, Esquire, special counsel for the conservator for Merritt, wrote a letter that was addressed to Melvin Brown, Director of the MDIF. It was dated September 18, 1985, and a copy was sent to Fidelity on September 20, 1985, by a partner of Mr. Thieblot.

The copy was sent pursuant to Paragraph 6 of Fidelity’s policy dealing with notice of potential claims. Mr. Thieblot’s letter was blunt. He wrote the letter to call [Mr. Brown’s] attention to various matters which, in our opinion, could give rise to a civil law suit against Gerald S. Klein, and possibly others, relating to gross mismanagement of Merritt and other wrongful conduct. We do not intend at this point to attempt to provide a complete catalogue of transactions, acts, and circumstances which we believe may give rise to liability.

Rather, we will provide a broad outline of what we believe to have been Mr. Klein’s wrongful conduct, with some specific examples. Mr. Thieblot continued: We believe he may have practiced extensive self-dealing, taken unreasonable fees and dividends, diverted corporate opportunities, exerted undue and in fact total control over the officers and directors of Merritt, forced Merritt to enter highly speculative transactions without Merritt having sufficient (and in some cases any) basis for believing they were sound, and procured unsound appraisals for the purpose of inducing Merritt to enter transactions it should have avoided, and to lend sums in excess of regulatory limits. We also believe that Klein may have committed legal malpractice in connection with his representation of Merritt. We believe that the net effect of Klein’s activities was to transform Merritt into an aggressive vehicle which he used to finance his speculative investments, to the detriment of Merritt.

We believe Klein’s wrongful activities will cost Merritt, and ultimately its depositors or those who have or may undertake to make the depositors whole, millions of dollars. ³²⁴ Mr. Thieblot next proceeded to list numerous: 1) “statutory and regulatory violations” by Klein; 2) examples of “undue influence by Klein”; 3) examples of “self dealing by Klein,” including examples of loans by Merritt to entities, which were already on shaky ground, that Klein controlled; and 4) numerous examples of business practices that Mr. Thieblot thought “may be improper.” He concluded his letter by stating: The Maryland statutory and regulatory provisions that may govern cases of this kind are not free from confusion. There are gaps in the law and some inconsistencies. Operative provisions are capable of varying interpretations. Documents and facts have been under the control of Klein and those he directs.

Yet I think we now are on notice of facts and circumstances sufficient to permit an informed judgment, and that is that Klein at least, and very possibly others, are liable for Merritt’s very substantial losses. If part of the Chase Agreement with Klein (if there is such an agreement) is to be to release him of past liabilities, then that is of course part of the business deal and general settlement with him. If[,] however, that for any reason does not go through, then I advise that suit papers be prepared and filed promptly. The “Chase agreement with Klein” referred to in the September 18, 1985, letter concerned the purchase of all shares of stock in Merritt by the Chase Bank of Maryland (hereinafter “Chase”) and will be discussed in detail infra. 4.

The Frierson Letter By letter dated October 3, 1985, Robert deV. Frierson, on behalf of the MDIF, gave notice to Fidelity of a potential claim MDIF had against Merritt and its officers and directors. Mr. Frierson said, in pertinent part: Pursuant to paragraph 6 of the policy, you are hereby given notice of events, transactions, and circumstances that may give rise to a claim against Merritt that have not already been given to you. During the period of your policy’s coverage, Merritt may have or may be alleged to have acted or failed to have acted ³²⁵ with respect to various transactions and matters in a manner that may give rise to a claim that Merritt engaged in deceit, fraud, misrepresentation, neglect, self-dealing, breach of fiduciary duties, unjust enrichment, violation of the Maryland and United States securities acts, violation of the Maryland Consumer Protection Act, violation of Merritt’s rules, regulations and bylaws, violation of the Maryland Financial Institutions Article, violation of the former MSSIC’s rules and regulations, and other violations of state and federal law, the common law, and various rules and regulations.

The claims may be asserted against Merritt by depositors and creditors of Merritt, by members of the public (either directly or indirectly through a State agency), by others who have had business dealings with Merritt, by or on behalf of Merritt and its conservator, officers, directors and agents, and by MDIF as successor corporation to MSSIC. The factual basis of potential claims is set forth in greater detail in letters dated September 18, 1985 from Robert J. Thieblot, Esquire to Melville S. Brown and May 2, 1985 from Paul V. Trice, Jr. to Gerald S. Klein, attached hereto and incorporated by reference. Further notification has been previously given by letter and appendix dated July 8, 1985 from Robert J. Thieblot on behalf of MDIF as conservator of Merritt and this notification is incorporated by reference in letter. (Emphasis added.) B. THE CHASE AGREEMENT Fearing suits for civil liability due to matters mentioned in the aforementioned letters, Klein, on behalf of Merritt, undertook negotiations with Chase and MDIF for Chase to purchase all Merritt stock.

The negotiations were fruitful, and Chase bought Merritt’s stock in an agreement that was concluded on October 14, 1985. Chase was paid $25 million by the MDIF for its assumption of control over Merritt, and as part of the bargain, the MDIF agreed to forebear from suing ³²⁶ Klein until Klein paid Chase for various divestments of Merritt property made pursuant to the Chase sale. 4 Klein, by use of various corporations he controlled, incurred approximately $500,000 in expenses in order to complete the sale of Merritt’s stock to Chase. These expenses included fees paid to lawyers, accountants and other professionals for tax returns, tax advice, liquidation of subsidiaries, lobbying, and preparation of financial statements, and tax returns. The Policy Exclusions Fidelity’s policy contained the following exclusions: (a) Except insofar as the [insured] may be required or permitted by law to indemnify the Directors and Officers, the Company [Fidelity] shall not be liable to make payment for Loss in connection with any claim made against the Directors and Officers: (2) based upon or attributable to their gaining in fact any personal profit, remuneration or advantage to which they were not legally entitled; (4) brought about or contributed to by the dishonesty of the Directors and Officers.

However, notwithstanding the foregoing, the Directors and Officers shall be protected under the terms of this policy as to any claims upon which suit may be brought against them by reason of any alleged dishonesty on the part of the Directors and Officers unless a judgment or other final adjudication thereof adverse to the Directors and Officers shall establish that acts of active and deliberate dishonesty committed by any of the Directors and Officers with actual dishonest purpose and intent were material to the cause of action so adjudicated. ³²⁷ Appellants’ Claim Against Fidelity In February 1987, Klein, through counsel, presented a claim to Fidelity under its D & 0 policy for reimbursement of the monies spent in the negotiations of the sale of Merritt’s stock to Chase. Klein’s counsel wrote: [Y]ou will recall that you have had conversations with Mr. Klein and myself relative to the expenditure by Mr. Klein of substantial sums related to the acquisition of Merritt Commercial Savings & Loan Association by Chase Bank of Maryland. A very substantial part of those negotiations involved and culminated in the agreement by the Maryland Deposit Insurance Fund to forebear any civil action against Merritt’s Officers and Directors at least until all debts to Chase are paid. In addition to providing potential limitations problems, the structure of that transaction provided very substantial defenses to any claims against Officers and Directors of Merritt which are probably dispositive and would at least facilitate a very favorable settlement.

Needless to say, this undertaking by Mr. Klein has resulted in substantial savings to your company far in excess of the amounts expended by Mr. Klein in obtaining these agreements from which you directly benefit[ed]. On March 24,1987, Fidelity advised Klein’s counsel: Any legal or other professional expenses which may have been incurred by or on behalf of Mr. Klein in connection with the acquisition of Merritt by Chase Bank of Maryland would not have been amounts which Mr. Klein was legally obligated to pay for a claim or claims made against him for a Wrongful Act. Accordingly, these expenses would not constitute Loss under the Policy, and there would be no coverage under the Policy for such expenses. Approximately six years later, on January 4, 1993, Fidelity again denied Klein’s request for coverage for the Chase transactional expenses, stating, “It is the position of Fidelity ... that the Policy does not in any way cover other legal fees and expenses notwithstanding the fact that the expenses incurred may have avoided certain claims.” Klein, on January ³²⁸ 14, 1993, acknowledged in writing that his claim had been denied, stating: It is not my purpose to perpetuate this discourse, although I admit it has been stimulating over the years.

I was distracted by more pressing matters and had hoped that there would be some kind of reconciliation of our opposing views. That, now, appears to be impossible, and, therefore, I take your letter as a declination of the claim. It is my expectation that I will authorize counsel to enter suit shortly to enforce the claim. Klein wrote to Fidelity’s representative on February 9, 1993, stating: To be frank, I was disappointed that my last letter did not generate an invitation from you to meet in order to air, once and for all, our disagreements on this subject.

Such a meeting would, at a minimum, afford you the opportunity to get specific about what the problem is here, insure that both sides have exhausted the negotiations before suit is filed. In any event, I want you to know that in the absence of communications, I have instructed Jim Ulwick, Esquire of Kramon & Graham to begin drafting our action. The coverage issue was not resolved, yet appellants never filed the “action” mentioned in the February 9, 1993, letter. On February 22, 1996, more than three years after Klein acknowledged Fidelity’s “declination of the claim,” Fidelity brought a declaratory judgment action in the Circuit Court for Baltimore City, seeking a declaration that it was under no duty to indemnify either Klein or Middle State’s Holding Company, Inc. for “any sums which [they] may have incurred and paid as a result of incurring fees, costs and expenses associated with the sale of Merritt’s stock” to Chase.

A bench trial was held on the matter on August 12, 1996, Judge Joseph Kaplan presiding. In a written opinion dated August 15,1996, Judge Kaplan ruled: 1) No “claim” was made against Klein, as that term is used in the policy, and thus Fidelity had no duty to indemni ³²⁹ fy either Klein or Middle States for monies expended in the sale of Merritt to Chase; 2) The insured suffered no “loss” as that term is defined under the policy; 3) That even if the insureds had both a “claim” and a “loss” under the D & 0 policy, any cause of action Klein or Middle States had was barred by the statute of limitations; 4) The defendants were not entitled to recover against Fidelity under the theory of unjust enrichment. ISSUES PRESENTED Appellants raise four issues in this appeal, but we need to address only two, which we have rephrased: 5 1. Did the letters, received by Fidelity in 1985, threatening possible litigation against Klein and others, constitute a “claim” under Fidelity’s Policy? 2.

Are the appellants entitled to recovery against Fidelity under an “unjust enrichment” theory? We answer both these questions in the negative and affirm the judgment entered in favor of Fidelity. ³³⁰ ISSUE I Fidelity’s policy says, in pertinent part: If during the policy period, any claim or claims are made against the Directors and Officers, individually or collectively, for a Wrongful Act, the company will pay, in accordance with the terms of the policy, on behalf of the Directors and Officers or any of them, their heirs, legal representatives or assigns all Loss which the Directors and Officers or any of them shall become legally obligated to pay or as to which the Association shall be required or permitted by law to indemnify the Directors and Officers for a claim or claims made against the Directors and Officers for Wrongful Act(s) and shall include damages, judgments, settlements and costs, charges and expenses ... incurred in defense of legal actions, suits, or proceedings and appeals therefrom____ (Emphasis added.) In Paragraph 6(a), under the heading “Notice of Claim,” the policy states: If during the policy period ..., the Association or the Directors and Officers shall: (1) receive written or oral notice from any party that is the intention of such party to hold the Directors and Officers, or any of them, responsible for a specified Wrongful Act ..., the insured shall during such period give written notice thereof to the Company as soon as practicable and prior to the date of termination of the policy, then any claim which may subsequently be made against the Directors and Officers arising out of such Wrongful Act shall, for purposes of this policy, be treated as a claim made during the Policy Year in which such notice was given. (Emphasis added.) The word “claim” is not defined in Fidelity’s policy. This fact does not, however, lead to the conclusion that the term is ambiguous.

See Hoyt v. St. Paul Fire & Marine Ins. Co., 607 F.2d 864 (9th Cir.1979); Bensalem Tp. v. Western World Ins. Co., 609 ³³¹ F.Supp. 1343, 1348 (E.D.Pa.1985). Ambiguities only exist where reasonably minded people have honest differences.

Eli Lilly [v. Home Insurance Co.], 482 N.E.2d [467,] 470 [ (Ind.1985) ]. The term claim is one of the commonest terms in the law. See St. Paul Fire & Marine Ins. Co. v. Hawaiian Ins. & Guaranty Co., 2 Haw.App. 595 , 637 P.2d 1146 (1981), quoting 8 Bac.

Abr., where Lord Coke said, “the word demand is the largest word in the law, except claim.” The word claim is derived from the Latin word clarmor, “meaning a call or demand. In its ordinary sense the term imports the assertion, demand or challenge of something as of a right____” San Pedro Properties, Inc. v. Sayre & Toso, Inc., 203 Cal.App.2d 750 , 21 Cal.Rptr. 844 (1962), quoting Supera v. Moreland Sales Corp., 28 Cal.App.2d 517, 521 , 82 P.2d 963 (1938). Insurance Corp. of America v. Dillon, Hardamon & Cohen, 725 F.Supp. 1461, 1468 (N.D.Ind.1988). All parties agree that the letters from Messrs.

Trice, Robinson, Thieblot, and Frierson constituted, at least, notice of a claim within the meaning of Paragraph 6(a). Appellants go a step further, however, and contend that these letters constitute “claims” in and of themselves. According to appellants, because “claims” mentioned in the letters were averted or at least postponed due to expenditures by appellants of more than $500,000, Fidelity was obligated under its policy to reimburse them. Fidelity denied appellants coverage, because according to Fidelity, no “claim” has been made as of the date of trial.

The “first principle of construction of insurance policies in Maryland is to apply the terms of the contract,” Mutual Fire, Marine & Inland Ins. v. Vollmer, 306 Md. 243, 250 , 508 A.2d 130 (1986), to determine the scope and limitations of its coverage. Chantel Assocs. v. Mount Vernon Fire Ins. Co., 338 Md. 131 , 656 A.2d 779 (1995); Lawyers Title Ins. Corp. v. Knopf, 109 Md.App. 134 , 674 A.2d 65 , cert. denied, 343 Md. 333 , 681 A.2d 69 (1996).

This principle serves to achieve the touchstone of policy construction — to ascertain and effectuate the intent of the parties to the agreement. ³³² Aragona v. St. Paul Fire & Marine Ins. Co., 281 Md. 371, 375 , 378 A.2d 1346 (1977); see Schuler v. Erie Ins. Exch., 81 Md.App. 499 , 568 A.2d 873 , cert. denied, 319 Md. 304 , 572 A.2d 183 (1990). To divine properly the parties’ intent, the policy is viewed as a whole, without emphasis being placed on particular provisions.

Sullins v. Allstate Ins. Co., 340 Md. 503 , 667 A.2d 617 (1995); Nolt v. United States Fidelity & Guar. Co., 329 Md. 52 , 617 A.2d 578 (1993); Simkins Indus., Inc. v. Lexington Ins. Co., 42 Md.App. 396 , 401 A.2d 181 , cert. denied, 285 Md. 730 (1979).

Moreover, whenever possible, each clause, sentence, or provision shall be given force and effect. See Pacific Indem. [Co., Inc. v. Interstate Fire & Casualty Co., 302 Md. 383 , 488 A.2d 486 (1985)], supra; Truck Ins. Exch. v. Marks Rentals, Inc., 288 Md. 428 , 418 A.2d 1187 (1980); Gottlieb v. American Auto. Ins.

Co., 177 Md. 32 , 7 A.2d 182 (1939). Empire Fire and Marine Ins. v. Liberty Mut. Ins. Co., 116 Md.App. 143 , 165-66, 695 A.2d 624 (1997).

The word “claim” is “one of those words of many-hued meanings [which] derive their scope from the use to which they are put.” MGIC Indem. Corp. v. Home State Sav. Ass’n, 797 F.2d 285, 288 (6th Cir.1986) (quoting Powell v. U.S. Cartridge Co., 339 U.S. 497, 529 , 70 S.Ct. 755, 772 , 94 L.Ed. 1017 (1950) (Frankfurter, J., dissenting)). In its broadest sense, the term can sometimes mean “contention”; but as appellants point out, in construing contracts, courts give words their ordinarily accepted meaning when contract terms are undefined. “The ordinary meaning of ‘claim made’ refers to the assertion of a claim by or on behalf of the injured person against the insured.” St. Paul Fire & Marine Ins.

Co. v. House, 315 Md. 328, 332 , 554 A.2d 404 (1989). 6 ³³³ Using the ordinary meaning of the term, Robinson’s letter cannot be construed as making a “claim.” Robinson represented the appellants, and he, of course, made no claim against his own clients. Instead, Robinson simply alerted Fidelity, pursuant to Paragraph 6, of “potential claims, which may arise under” the D & 0 policy. As will be recalled, Thieblot’s letter was to Melvin Brown, Director of the MDIF. In the letter, Thieblot made no demand against anyone.

He simply recommended that MDIF sue Klein, and possibly other directors, unless the “Chase agreement” prohibited such a suit. Fierson’s letter, which enclosed copies of both the Thieblot and Trice letters, notified Fidelity of potential claims pursuant to Paragraph 6 of the D & 0 policy. No demand was made of either Fidelity or appellants. As previously explained, the Trice letter that Fierson enclosed expressed serious concerns about Klein’s actions and made numerous inquiries.

The letter did not, however, demand money from appellants nor demand that appellants do anything except, in the case of certain officers, appear at a meeting to be held on May 13, 1985, and present “written responses” to the allegations set forth in the letter. Significantly, the appellants do not contend in their brief that the Trice letter constituted a “claim” within the meaning of the policy. Appellants do contend, however, that the Robinson, Thieblot, and Fierson letters constituted “actual claims.” They argue: In the context of insurance, Webster’s defines a “claim” as “a demand for something due or believed to be due ...” Webster’s Seventh New Collegiate Dictionary 203 (G. & C. Merriam Co.1981). Black’s supplies a more technical legal definition of “claim”: “[t]o demand as one’s own or as one’s right; to assert; to urge; to insist.

Cause of action.” Black’s Law Dictionary 224 (5th ed.1979) (emphasis sup ³³⁴ plied). “Cause of action” is defined as “[t]he fact or facts which give a person a right to judicial relief ... [a] situation or state of facts which would entitle party to sustain action and give him right to seek a judicial remedy in his behalf.” Id. at 201. See also, Polychron v. Crum & Forster Insurance Companies, 916 F.2d 461, 463 (8th Cir.1990). A lawsuit, as opposed to a claim, is a “suit, action or cause instituted or [pending] ... in a court of law.” Black’s at 799 (emphasis supplied). Therefore, according to the definitions of the relevant terms contained in Black’s, it is clear that “claim” includes the assertion of the relevant facts and legal theories that give rise to potential liability, whether or not the claim is formally filed in court.

As the Polychron court noted, Black’s does not normally supply the ordinary and accepted meaning of words. 916 F.2d at 463 . However, in light of the definition in Webster’s and the definitions in Black’s, the Robinson, Thieblot and Frierson letters are clearly claims. Using the Webster’s definition, which is quite similar to the “ordinary meaning” set forth by the Court of Appeals in House, supra, the three letters here at issue do not make “claims” because the letter writers fail to make “a demand for something due or believed to be due.” Moreover, using the Black’s definition of a claim, the three letter writers did not “demand [anything] as one’s own or as one’s right.” Taken as a whole, the letters, at most, simply warn that claims were likely to be filed against Klein and other officers and directors. Appellants’ argument that letters warning of an intent to take legal action constituted a “claim” against Klein (and others) is refuted by reading the policy as a whole.

Paragraph 6(a) is a “claims after termination clause.” Typically, such a clause provides that if an insured becomes aware and gives notice to an insurer during the policy period of the occurrence of a specific wrongful act or if circumstances that could give rise to a claim, a claim subsequently made arising out of such wrongful act or circumstances will be deemed made “during the [p]olicy period.” ³³⁵ In re Ambassador Group, Inc. Litigation, 830 F.Supp. 147, 157 (E.D.N.Y.1993) (quoting Harley, Recent Decision of Interest, in Directors’ and Officers’ Liability Insurance, 333, 363-65 (Practicing Law Institute, 1990)). Paragraph 6(a) in Fidelity’s policy plainly distinguishes between notice to the insurer that it is the intention of a party to hold an officer or director responsible for wrongful acts and “claims which may subsequently be made against the Directors and Officers” for wrongful acts. Under Paragraph 6(a), if there is a notice of a potential claim given to the insurer within the policy period and if there later is a claim filed, the notice of potential claim shall be treated as a “claim made” during the policy. If a “claim” and a notice of the intention to make a claim were the same, then the claims after termination provision (Paragraph 6(a)) would be superfluous.

As Judge Kaplan pointed out in his -written opinion, under Fidelity’s D & 0 policy, a “claim” is not made merely by the insurer’s receipt of notice that a party intends to hold a director or officer liable for a wrongful act. Several cases from other jurisdictions have reached a conclusion similar to that reached by