Blue Compass v. Twin City

── Blue Compass v. Twin City ── Court: Court of Appeals for the Fifth Circuit Date: June 05, 2026 Category: Private Civil Diversity Case: 25-10894 Document: 54-1 Page: 1 Date Filed: 06/05/2026 United States Court of Appeals for the Fifth Circuit United States Court of Appeals Fifth Circuit ____________ FILED June 5, 2026 No. 25-10894 Lyle W. Cayce ____________ Clerk Blue Compass RV, L.L.C., Plaintiff—Appellant, versus Twin City Fire Insurance Company, Defendant—Appellee. ______________________________ Appeal from the United States District Court for the Northern District of Texas USDC No. 3:24-CV-1987 ______________________________ Before Smith, Willett, and Ramirez, Circuit Judges. Per Curiam:* Blue Compass RV, LLC (Blue Compass) appeals the dismissal of its lawsuit against Twin City Fire Insurance Company (Twin City) for refusing to pay the entire amount of its loss from a payment to a fraudulent account based on an exclusion in the policy that limited the amount of coverage for fraud. We AFFIRM. _____________________ * This opinion is not designated for publication. See 5th Cir. R. 47.5. Case: 25-10894 Document: 54-1 Page: 2 Date Filed: 06/05/2026 No. 25-10894 I In February 2022, SPD Construction was in the process of building a new RV sales and service center for Blue Compass. Blue Compass regularly processed and paid the periodic progress invoices SPD Construction submitted for its work. On February 22, 2022, Blue Compass received an email purporting to be from someone with SPD Construction. The email stated that SPD Construction was changing its banking information and provided new payment instructions. Blue Compass followed those instructions and updated its account information for SPD Construction. It subsequently used the updated account information when paying a periodic progress invoice from SPD Construction for $1,251,068.34. After discovering that the updated account information was fraudulent, Blue Compass submitted a claim under its crime insurance policy with Twin City. The policy contains different “insuring agreements” with different coverage limits. The Deception Fraud Insuring Agreement provides coverage “for loss of Money or Securities resulting from Deception Fraud” up to a $100,000 liability limit and is subject to a $25,000 retention. The Forgery or Alteration Including Credit Cards, Theft Inside the Premises, and Computer and Funds Transfer Fraud Insuring Agreements have coverage limits of $2,000,000 and are subject to $50,000 retentions. Exclusion (T)(1), which “shall not apply to the Deception Fraud Insuring Agreement,” excludes coverage for “[l]oss or damage resulting directly or indirectly from Deception Fraud.” The policy defines “Deception Fraud” as: the intentional misleading of a person to induce the Insured to part with Money or Securities by someone, other than an identified Employee, pretending to be an Employee, owner of the Insured or one of the following business relations: (1) A Vendor; (2) A Customer; (3) A Custodian; or (4) A Messenger. 2 Case: 25-10894 Document: 54-1 Page: 3 Date Filed: 06/05/2026