US Fire Loses Bid To Kill 1031 Receiver's Fraud Claim

Law360, New York (July 15, 2011, 4:45 PM EDT) -- A California federal judge on Thursday refused to dismiss a 1031 exchange company receiver's fraud counterclaim against U.S. Fire Insurance Co. in a coverage fight tied to the exchange company's alleged real estate embezzlement scheme.

In refusing U.S. Fire's bid to dismiss the counterclaim, U.S. District Judge James Ware rejected the insurer's argument that the exchange company, Vesta Strategies LLC, did not discover the alleged losses during the discovery period for its $2 million commercial crime policies.

U.S. Fire launched the suit against Vesta Strategies in...
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