TORRUELLA, Circuit Judge.
This case arises from a failed attempt by defendant-appellee HPSC, Inc. ("HPSC") to recover an embezzlement loss under an executive protection insurance policy issued by plaintiff-appellant Federal Insurance Co. ("Federal"). Federal brought this declaratory judgment action against HPSC seeking rescission of the policy based on a misrepresentation made by HPSC in its 2001 insurance renewal application. HPSC counterclaimed, seeking recovery...
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