                            UNPUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT


                            No. 11-1781


FIRST TENNESSEE BANK NATIONAL ASSOCIATION,

                Intervenor/Plaintiff - Appellant,

          and

GLOBAL TITLE, LLC,

                Third Party Plaintiff,

          v.

ST. PAUL FIRE AND MARINE INSURANCE COMPANY,

                Third Party Defendant – Appellee.



                            No. 11-1782


GLOBAL TITLE, LLC,

                Third Party Plaintiff – Appellant,

          and

FIRST TENNESSEE BANK NATIONAL ASSOCIATION,

                Intervenor/Plaintiff,

          v.

ST. PAUL FIRE AND MARINE INSURANCE COMPANY,

                Third Party Defendant - Appellee.
Appeals from the United States District Court for the Eastern
District of Virginia, at Richmond.  Henry E. Hudson, District
Judge. (3:09-cv-00550-HEH-MHL)


Argued:   September 18, 2012             Decided:     December 21, 2012


Before TRAXLER,   Chief   Judge,   and   DIAZ   and   THACKER,   Circuit
Judges.


Vacated and remanded by unpublished per curiam opinion.


ARGUED: Paul Peter Vangellow, Falls Church, Virginia; Clarence
A. Wilbon, BASS, BERRY & SIMS PLC, Memphis, Tennessee, for
Appellants.   Christopher J. Bannon, ARONBERG GOLDGEHN DAVIS &
GARMISA, Chicago, Illinois, for Appellee.     ON BRIEF: Annie T.
Christoff, BASS, BERRY & SIMS PLC, Memphis, Tennessee; Michael
P.   Falzone,  HIRSCHLER FLEISCHER,    Richmond,   Virginia,  for
Appellant First Tennessee Bank National Association.     Bruin S.
Richardson, LECLAIRRYAN, Richmond, Virginia, for Appellee.


Unpublished opinions are not binding precedent in this circuit.




                                   2
PER CURIAM:

       Global Title, LLC, served as the closing agent for mortgage

loans originated by Financial Mortgage, Inc. (“FMI”), and funded

by First Tennessee National Bank.                        After learning that three

scheduled     loans    would    not     close,       Global      returned      the   unused

funds    to   FMI    instead     of    First       Tennessee.         FMI’s      president

absconded with the funds.              Unable to recover the funds from FMI,

First Tennessee sued Global.                Global    sought      coverage        under   a

liability     policy    issued    by     St.      Paul    Fire    &   Marine     Insurance

Company.      St. Paul determined that coverage was barred by a

policy exclusion and denied the claim, which prompted Global to

sue St. Paul for breach of contract.                     After a bit of procedural

shuffling     and    realigning,       the     case      proceeded     with     Global    as

plaintiff     asserting       claims    against       St.    Paul;    First      Tennessee

intervened to assert its claim against Global.

       The district court granted summary judgment in favor of St.

Paul, concluding that coverage was excluded under the policy and

that    St.   Paul    therefore       had    no   duty      to   defend    or    indemnify

Global.       Global    and    First     Tennessee        appeal.         We    agree   with

Appellants that there is a possibility of coverage under the

policy and that St. Paul therefore is obligated to defend Global

against First Tennessee’s claims.                     Accordingly, we vacate the

district court’s order and remand.



                                              3
                                        I.

     The central question in this case is whether St. Paul is

obligated    under    the   policy     to    defend      Global   in     the    action

brought against Global by First Tennessee.                 Under Virginia law, 1

an insurer’s duty to defend its insured is broader than its duty

to indemnify.      “Indeed, an insurer may be required to provide a

defense     even   where     the     ultimate      resolution       of    the     case

demonstrates       that      the      insurer       is      not        liable      for

indemnification.”         Fuisz v. Selective Ins. Co. of Am., 61 F.3d

238, 242 (4th Cir. 1995).

     The duty to defend “arises whenever the complaint alleges

facts and circumstances, some of which would, if proved, fall

within the risk covered by the policy.”                  Virginia Elec. & Power

Co. v. Northbrook Prop. & Cas. Ins. Co., 475 S.E.2d 264, 265

(Va. 1996) (internal quotation marks omitted).                     Conversely, an

insurer has no duty to defend if the insurer “would not be

liable    under    its    contract    for    any   judgment       based    upon    the

allegations.”        Travelers Indemn. Co. v. Obenshain, 245 S.E.2d

247, 249 (Va. 1978); see Virginia Elec. & Power, 475 S.E.2d at


     1
        The parties agree that Virginia law governs the
disposition of this appeal.   See Klaxon Co. v. Stentor Elec.
Mfg. Co., 313 U.S. 487, 496-97 (1941) (federal court sitting in
diversity must apply the choice-of-law rules of the forum
state); Buchanan v. Doe, 431 S.E.2d 289, 291 (Va. 1993)
(Virginia law governs dispute over insurance policy issued and
delivered in Virginia).


                                        4
266-67 (insurer has no duty to defend the insured against claim

clearly excluded from coverage under the policy).

      Resolution     of   the   duty-to-defend       question     thus    “requires

examination of (1) the policy language to ascertain the terms of

the   coverage   and      (2)   the    underlying    complaint     to     determine

whether any claims alleged therein are covered by the policy.”

Fuisz, 61 F.3d at 242.          “This principle is commonly known as the

‘eight   corners     rule’      because    the    determination     is     made    by

comparing the ‘four corners’ of the underlying complaint with

the   ‘four   corners’     of    the   policy    .   .   .   .”    AES    Corp.    v.

Steadfast Ins. Co., 725 S.E.2d 532, 535 (Va. 2012).                      With these

principles in mind, we turn now to the specifics of this case.

                                          A.

      The policy’s general insuring clause provides coverage to

“protected persons” for loss caused by “wrongful acts” committed

during the performance of or failure to perform “real estate

professional     services,”       including      services     performed     in    the

capacity of title, closing, or escrow agent.                 Policy at SP00021.

The policy defines “wrongful act” as “any negligent act, error

or omission.”      Id. at SP00022.

      The policy exclusion at issue in this case is the “Handling

of funds” exclusion (the “HOF Exclusion”).                   The HOF Exclusion,

in    relevant   part,     excludes       from   coverage     claims      for    loss

resulting     from     “[a]ny     unauthorized       act     committed     by     any

                                          5
protected     person    that     deprives       an    owner    of     the    use    of   its

funds.”      Policy at SP00028 (emphasis added).                      The policy does

not define “unauthorized” or “unauthorized act.”

                                           B.

      The     amended      complaint   filed          by      First     Tennessee         (as

intervening     plaintiff)       asserted       a    single    count    of    negligence

against Global. 2       According to the allegations of the complaint,

First      Tennessee    entered     into        an     agreement       with        FMI   and

established     a   line    of    credit       through     which      First    Tennessee

provided the funds for mortgage loans originated by FMI.                                 The

complaint alleged that Global, as closing agent, “would receive

funds from First Tennessee prior to the closing of the [FMI]-

originated loans.          Global Title was to hold the funds in trust

and then distribute the funds as directed upon closing.”                                 J.A.

33.       In anticipation of funding three loans, First Tennessee

wired a total of approximately $2.5 million to Global.                                    The

complaint alleged that when Global later learned from FMI that

the transactions had been cancelled, “[i]nstead of returning the

      2
       We focus on the allegations of First Tennessee’s amended
complaint-in-intervention    rather    than    First     Tennessee’s
original, multi-count complaint.    The original complaint, which
was dismissed without prejudice, became a nullity upon the
filing of the amended complaint.      See Young v. City of Mount
Ranier, 238 F.3d 567, 573 (4th Cir. 2001) (“[A]n amended
pleading   supersedes  the   original   pleading,    rendering   the
original pleading of no effect.     Thus, if an amended complaint
omits claims raised in the original complaint, the plaintiff has
waived those omitted claims.”).


                                           6
funds to First Tennessee . . . , Global Title transferred the

funds . . . to [FMI.]”         J.A. 34.

     In     support    of     its   negligence    cause      of    action,    First

Tennessee alleged that, as closing agent, Global had a duty to

protect     First     Tennessee’s     interest    in    the       funds.      First

Tennessee    alleged    that    Global    “breached    the    duty    it    owed   to

First Tennessee when it negligently transferred $2.5 million of

First Tennessee’s money to [FMI],” and that Global’s negligence

in returning the funds entitles it to recovery.                    J.A. 34.        The

complaint    alleged     no   additional      facts   describing      how    or    why

Global gave the money to FMI -- there are no allegations, for

example, that Global acted willfully or that Global acted in

concert with FMI. 3


     3
       First Tennessee attached as exhibits to its intervention
complaint certain documents evidencing the transactions at issue
here.   The documents included supplemental closing instructions
executed by FMI and Global which stated that if the loan did not
close, Global was “to either (1) return the unused cashier’s
check to [FMI]; or (2) return the funds via wire transfer
directly to [First Tennessee].”   J.A. 39, 42, 45.    Relying on
CACI International, Inc. v. St. Paul Fire & Marine Insurance
Co., 566 F.3d 150 (4th Cir. 2009), the district court held that
Virginia’s eight-corners rule did not permit it to consider
documents attached to the complaint. See id. at 156 (declining
to consider documents attached to complaint “because Virginia
courts have not signaled a readiness to look beyond the
underlying complaint” when resolving duty-to-defend questions).
But see Va. Sup. Ct. Rule 1:4(i) (“The mention in a pleading of
an accompanying exhibit shall, of itself and without more, make
such exhibit a part of the pleading.” (emphasis added)).
Although Appellants contend that the district court erred by
refusing to consider the exhibits, we need not decide that
(Continued)
                                          7
                                           C.

      Adopting the report and recommendation of the magistrate

judge, see 28 U.S.C. § 636(b)(1)(B), the district court granted

summary judgment in favor of St. Paul on the coverage question.

Because the policy did not define “unauthorized,” the district

court, looking to Black’s Law Dictionary, defined “unauthorized”

as   “‘[d]one       without    authority’”        or     “‘made      without      actual,

implied, or apparent authority.’”                J.A. 153 (quoting Black’s Law

Dictionary (9th ed. 2009)).             The court then defined “authority”

as   “‘[t]he    right     or   permission       to     act   legally      on    another’s

behalf; . . .        the power of one person to affect another’s legal

relations      by    acts      done   in       accordance          with   the     other’s

manifestations of assent; the power delegated by a principal to

an agent. . . .’”         J.A. 153.

      The district court concluded that, given the allegations in

the complaint that the funds belonged to First Tennessee and

that Global was to hold the funds in trust and distribute them

at closing as directed by First Tennessee, Global’s actions were

“unauthorized”       as    a   matter   of      law.         The    magistrate     judge




question.   As we will explain, the allegations of First
Tennessee’s complaint,   even  without  consideration   of  the
attached exhibits, are sufficient to trigger St. Paul’s duty to
defend.


                                           8
explained    this    conclusion       in    the        report   and   recommendation

adopted by the district court:

     It is undisputed that these three [FMI]-originated
     loans never closed, and it is undisputed that First
     Tennessee never directed Global Title to transfer the
     funds to [FMI] despite the failure to close. Thus,
     Global Title's transfer of First Tennessee’s funds to
     [FMI] constituted an unauthorized act that deprived
     the owner of the use of its funds. Accordingly, the
     “Handling of funds” provision excludes coverage for
     this unauthorized act.

J.A. 133.     Thus, in this case, because First Tennessee did not

authorize Global to return the funds to FMI, the court held

Global’s action was unauthorized within the meaning of the HOF

Exclusion.



                                           II.

     On    appeal,     Global   and    First       Tennessee      contend   that   the

district     court’s     interpretation           of     the    HOF   Exclusion    was

erroneous.     They argue that under Virginia law, an act that an

agent   is   authorized    to   perform          does    not    become   unauthorized

simply because the agent performed the act negligently.                            And

because negligent acts are not necessarily unauthorized acts,

Appellants argue that the HOF Exclusion does not foreclose the

possibility of coverage under the policy.                  We agree.

                                           A.

     Because the policy did not define “unauthorized act,” the

district court properly defined “unauthorized act” as an act

                                           9
taken    without   authority.           See,      e.g.,    Scottsdale          Ins.      Co.    v.

Glick, 397 S.E.2d 105, 108 (Va. 1990) (“In the absence of a

definition,      words     used    in   an   insurance          policy       must   be     given

their ordinary and accepted meaning.”).                         Nonetheless, when the

HOF Exclusion is considered as part of the policy as a whole, we

think it clear that the district court took too narrow a view of

the precise “authority” necessary for an agent’s action to be

“authorized.”

      An insurance policy, of course, is a contract subject to

the   same   rules    of    construction          as    any     other     contract.            See

Virginia Farm Bureau Mut. Ins. Co. v. Williams, 677 S.E.2d 299,

302   (Va.   2009);       Harleysville       Mut.       Ins.    Co.     v.    Dollins,         109

S.E.2d    405,     409     (Va.     1959).          “The       primary       goal     in       the

construction of written contracts is to determine the intent of

the contracting parties . . . .”                       Flippo v. CSC Assocs. III,

L.L.C., 547 S.E.2d 216, 226 (Va. 2001) (internal quotation marks

omitted); see Bender-Miller Co. v. Thomwood Farms, Inc., 179

S.E.2d 636, 639 (Va. 1971) (“[T]he intent of the parties as

expressed in their contract controls.”).

      When   determining          the   intent     of     the    contracting          parties,

“the whole instrument is to be considered; not any one provision

only, but all its provisions; not the words merely in which they

were expressed, but their object and purpose, as disclosed by

the   language,      by    the    subject      matter,        and   the      condition         and

                                             10
relation of the parties.”                  Worrie v. Boze, 62 S.E.2d 876, 880

(Va. 1951) (emphasis added; internal quotation marks omitted);

see Flippo, 547 S.E.2d at 226 (“[I]ntent is to be determined

from     the    language       employed,          surrounding         circumstances,          the

occasion, and apparent object of the parties.” (emphasis added;

internal quotation marks omitted)).                         In our view, the district

court failed to properly consider the “object and purpose” of

the     insurance         policy         when     determining          the      meaning        of

“unauthorized act” in the HOF Exclusion.

       The object and purpose of the contract in this case is

clear.         The    contract      is     a    professional         liability     insurance

policy that protects Global from liability for certain losses

caused by Global while performing real-estate-related services

in its capacity as an agent.                          “Authority,” the focus of the

district court’s analysis, is of course a critical concept in

the    law     of    agency   --    absent       authority      to     act   on   behalf       of

another,       there    is    no    agency      relationship.           Within     an   agency

relationship,          however,     questions          about   liability      turn      not    on

simple “authority,” but on scope of authority.                           The principal is

liable for the actions of the agent committed within the scope

of    authority,       but    not    for       actions      outside    the   scope      of    the

agent’s authority.             See, e.g., Allen Realty Corp. v. Holbert,

318 S.E.2d 592, 596 (Va. 1984) (“[A] principal is liable to

third    persons       for    wrongful         acts    an   agent     commits     within      the

                                                 11
scope of his employment, even if the principal does not approve

or know of the misconduct . . . .”); Kern v. Freed Co., 299

S.E.2d 363, 364 (Va. 1983) (“If the agent exceeds his authority,

the principal is not bound by the agent’s acts.”).

       Because liability in the agency context -- the very risk

addressed by the policy -- turns on the scope of the agent’s

authority, we believe that when the HOF Exclusion is considered

in light of the purpose and subject-matter of the policy, the

exclusion for losses caused by an “unauthorized act” must be

understood       as   referring     to    an   act   outside    the   scope    of   the

insured’s authority.              See London Guar. & Accident Co. v. C.B.

White & Bros., 49 S.E.2d 254, 259 (Va. 1948) (explaining that

insurance policy must be “construed in the light of the subject

matter    with     which    the    parties     are   dealing    and   the   words    or

phrases of the policy should be given their natural and ordinary

meaning as understood in the business world.” (emphasis added));

accord State Farm Mut. Auto. Ins. Co. v. Powell, 318 S.E.2d 393,

397 (Va. 1984).         We believe this to be the most natural reading

of the policy -- so construed, the policy imposes obligations on

the insurer that track those of an agent’s principal.                         Just as

the principal would be liable for the wrongful act of his agent

committed within the scope of the agent’s authority but not for

acts     outside      the   scope    of    authority,     the    policy       provides

coverage for wrongful acts committed within the scope of the

                                           12
insured’s authority but not for acts committed outside the scope

of the insured’s authority.

       Accordingly, the HOF Exclusion, as we conclude it must be

interpreted, precludes coverage for claims of loss caused by any

act outside the scope of the insured’s authority that deprives

an   owner    of    the    use    of   its    funds.        The   question,     then,   is

whether the allegations in First Tennessee’s complaint clearly

and unambiguously establish that Global’s actions exceeded the

scope of its authority as closing agent such that coverage for

the claim is barred by the HOF Exclusion.                      See Floyd v. Northern

Neck   Ins.     Co.,      427     S.E.2d      193,    196    (Va.    1993)     (“[T]o    be

effective,         the     exclusionary            language       must    clearly       and

unambiguously bring the particular act or omission within its

scope.”).

        Under      Virginia       law,   an    “act     need   not   be   expressly     or

impliedly directed by the employer in order for the act to occur

within the scope of the employment.                    Similarly, an act committed

in violation of an employer’s direction is not always beyond the

scope of the employment.”                Gina Chin & Assocs. v. First Union

Bank, 537 S.E.2d 573, 579 (Va. 2000).

       Whether an agent acted within the scope of his authority

turns not on whether the particular act at issue -- often a tort

committed by the agent -– is “within the scope of the agent’s

authority,     but       [on]    whether     the     service   itself     in   which    the

                                              13
tortious   act    was   done    was       .    .   .   within   the    scope    of     such

authority.”      Broaddus v. Standard Drug Co., 179 S.E.2d 497, 503

(Va. 1971) (emphasis added; internal quotation marks omitted).

Under this standard, negligent and even willful and malicious

acts of an agent are not necessarily outside the scope of the

agent’s authority.        See Allen Realty Corp., 318 S.E.2d at 597

(“[A]   principal   is    liable      for       negligent   acts      that   its     agent

commits within the scope of his employment.”); Commercial Bus.

Sys., Inc. v. Bellsouth Servs., Inc., 453 S.E.2d 261, 266 (Va.

1995) (employee’s “willful and malicious acts” done to advance

his   self-interest      were       not       “conclusively”      outside      scope    of

employment because the acts were committed while the employee

was performing his duties and “in the execution of the services

for which he was employed”).

      In this case, First Tennessee asserted only a negligence

claim   against    Global.          First      Tennessee    did    not   allege      that

Global’s actions were unauthorized or that Global acted outside

the scope of its authority as closing agent, nor are there any

other factual allegations in the complaint that would permit

this court to conclude, as a matter of law, that the transfer

was outside the scope of Global’s authority.                          See Gina Chin &

Assocs.,   537     S.E.2d      at     577       (listing    factors      relevant       to

determination of whether given action was within the scope of

employment).      Because a negligent act by an agent may still be

                                              14
an act within the scope of the agent’s authority, see Allen

Realty Corp., 318 S.E.2d at 597, we agree with Appellants that

the    HOF   Exclusion   thus    does    not   clearly    and   unambiguously

encompass the conduct alleged in First Tennessee’s complaint.

See Floyd, 427 S.E.2d at 196.

       St. Paul, however, argues that while the duty to defend is

broad, the insured cannot create coverage by inventing scenarios

not alleged in the complaint that theoretically could be covered

by the policy.       And in St. Paul’s view, because the complaint

does not allege that Global was attempting to return the funds

to First Tennessee when it transferred them to FMI, Global’s

claim    that   it   negligently       performed    an   authorized    act   is

inconsistent with the allegations of the complaint and does not

trigger St. Paul’s duty to defend.           We disagree.

       Although the complaint does not include details about how

or why the transfer occurred, First Tennessee had no obligation

to include any such additional details in its complaint.                     The

allegations in the amended complaint were sufficient to support

First Tennessee’s negligence claim: that Global had a duty to

protect First Tennessee’s interest in the funds and to return

the unused funds to First Tennessee; that Global breached that

duty    by   returning   the   funds    to   FMI   instead;   and   that   First

Tennessee suffered damages from Global’s breach of its duties.

See McGuire v. Hodges, 639 S.E.2d 284, 288 (Va. 2007) (listing

                                        15
elements of negligence claim).                    The allegations of the amended

complaint         could       “without    amendment”       support    a     judgment     for

negligence,        and    the     allegations       are    therefore      sufficient      to

trigger St. Paul’s duty to defend.                   Parker v. Hartford Fire Ins.

Co., 278 S.E.2d 803, 804 (Va. 1981) (per curiam).

                                             B.

       Upon       concluding       that    coverage       was   barred      by     the   HOF

Exclusion, the district court held that St. Paul had no duty to

defend Global or indemnify Global for any judgment that might be

entered against it.                Because the allegations of the complaint

do not establish the applicability of the HOF Exclusion as a

matter       of     law,        the      district      court’s        ruling       on    the

indemnification issue was premature.                      If the evidence in First

Tennessee’s action shows that Global’s actions were outside the

scope of Global’s authority as closing agent, St. Paul will have

no    obligation         to    indemnify    Global        for   the   judgment.          The

possibility that St. Paul might not ultimately be responsible

for    the    judgment,          however,    has     no     effect     on    St.     Paul’s

obligation to defend Global against First Tennessee’s claims.

See Virginia Elec. & Power, 475 S.E.2d at 266 (“[T]he obligation

to defend is not negated merely by the unsuccessful assertion of

a claim otherwise facially falling within the risks covered by

the policy. . . .               The insurer has the obligation to defend the



                                             16
insured in such circumstances even though the obligation to pay

is not ultimately invoked.”).



                                     III.

      For   the    reasons      discussed    above,    we   hold   that    the

allegations of First Tennessee’s complaint create a possibility

of   coverage     under   the   policy’s    insuring   clause   and   do   not

unambiguously fall within the scope of the HOF Exclusion.                  The

district court therefore erred in concluding that St. Paul had

no duty to defend or indemnify Global against First Tennessee’s

claims.     Accordingly, we vacate the district court’s judgment

relieving St. Paul of its duty to defend and indemnify Global,

and we remand the case to the district court.               Upon resolution

of First Tennessee’s action against Global, the indemnification

issue will be ripe for reconsideration by the district court.



                                                       VACATED AND REMANDED




                                      17
