Justia U.S. 8th Circuit Court of Appeals Opinion Summaries

Yasmin Varela filed a class action lawsuit against State Farm Mutual Automobile Insurance Company (State Farm) after a car accident. Varela's insurance policy with State Farm entitled her to the "actual cash value" of her totaled car. However, she alleged that State Farm improperly adjusted the value of her car based on a "typical negotiation" deduction, which was not defined or mentioned in the policy. Varela claimed this deduction was arbitrary, did not reflect market realities, and was not authorized by Minnesota law. She sued State Farm for breach of contract, breach of the covenant of good faith and fair dealing, unjust enrichment, and violation of the Minnesota Consumer Fraud Act (MCFA).State Farm moved to dismiss the complaint, arguing that Varela's claims were subject to mandatory, binding arbitration under the Minnesota No-Fault Automobile Insurance Act (No-Fault Act). The district court granted State Farm's motion in part, agreeing that Varela's claims for breach of contract, breach of the covenant of good faith and fair dealing, and unjust enrichment fell within the No-Fault Act's mandatory arbitration provision. However, the court found that Varela's MCFA claim did not seek the type of relief addressed by the No-Fault Act and was neither time-barred nor improperly pleaded, and thus denied State Farm's motion to dismiss this claim.State Farm appealed, arguing that Varela's MCFA claim was subject to mandatory arbitration and should have been dismissed. However, the United States Court of Appeals for the Eighth Circuit dismissed the appeal for lack of jurisdiction. The court found that State Farm did not invoke the Federal Arbitration Act (FAA) in its motion to dismiss and did not file a motion to compel arbitration. The court concluded that the district court's order turned entirely on a question of state law, and the policy contained no arbitration provision for the district court to "compel." Therefore, State Farm failed to establish the court's jurisdiction over the interlocutory appeal. View "Varela v. State Farm Mutual Automobile Insurance Co." on Justia Law

The case centers on an insurance dispute between Cardinal Building Materials, Inc. and Amerisure Insurance Company following damage to Cardinal's facility by a tornado. Cardinal initially received a payout from Amerisure but later claimed additional coverage under its policy. Amerisure requested further documentation to support these additional losses, which Cardinal provided, albeit in an unorganized and delayed manner. Amerisure also requested Cardinal to provide a representative for an examination under oath, which Cardinal complied with. Subsequently, Amerisure argued that Cardinal had failed to cooperate as outlined in the insurance policy due to its delayed and disorganized submission of documents, and changes to the claim amount. The district court granted summary judgment in Amerisure's favor, holding that Cardinal had materially breached the insurance policy's cooperation clause.However, the United States Court of Appeals for the Eighth Circuit disagreed with the lower court's decision. The court noted that while Cardinal's document submission and response times were not ideal, the policy did not specify a particular format or schedule for document submission. The court also pointed out that Amerisure did not provide evidence that it had requested a "signed, sworn proof of loss" from Cardinal, a requirement in the policy. As such, the court found that there were genuine disputes of material fact as to whether Cardinal's actions constituted a material breach of the cooperation clause, making summary judgment inappropriate.The court did not address Amerisure’s alternative arguments that Cardinal failed to generate a genuine dispute of material fact regarding damages or present evidence from which a jury could rationally estimate Cardinal’s damages. The court deemed these arguments to be fact-intensive and best left to the district court to decide in the first instance. The court therefore vacated the summary judgment and remanded the case for further proceedings. View "Cardinal Building Materials, Inc. v. Amerisure Insurance Company" on Justia Law

In 2021, a warehouse developed by TriStar Companies, LLC but possessed by Amazon collapsed during a tornado, causing injuries and deaths. Several personal injury and wrongful death lawsuits were filed against TriStar, claiming negligence in the warehouse's construction. TriStar, insured by AXIS Surplus Insurance Company, sought coverage under their policy, but AXIS denied coverage and filed a complaint for a declaratory judgment that it had no duty to defend or indemnify TriStar for the resulting lawsuits. The district court granted AXIS's motion for summary judgment, ruling that the insurance policy did not cover the warehouse due to certain exclusions and limitations.Upon appeal, the United States Court of Appeals for the Eighth Circuit affirmed the lower court's decision. The Court of Appeals applied Missouri law, giving the insurance policy terms "the meaning which would be attached by an ordinary person of average understanding if purchasing insurance." The court found that the policy's language was clear and unambiguous. It limited coverage to premises owned, rented, or occupied by TriStar per a schedule of locations on file with AXIS. As the warehouse's location was not listed in the schedule, and TriStar did not own, rent, or occupy the warehouse when the incident occurred, the court concluded that the policy did not cover the incident.The court rejected TriStar's interpretation of the schedule of locations, which would have resulted in coverage extending to an entire city, as untenable and against common sense. Therefore, AXIS had no duty to defend or indemnify TriStar for the lawsuits arising from the warehouse collapse. View "Axis Surplus Insurance Company v. TriStar Companies, LLC" on Justia Law

The City of Richmond Heights, Missouri filed a claim with Mt. Hawley Insurance Company under a commercial property policy for losses of tax revenue due to government-mandated COVID-19 closures. Mt. Hawley denied the claim and sued for a declaratory judgment that it was not obligated to cover the losses. Richmond Heights counterclaimed with five counts: (1) breach of contract, (2) vexatious refusal to pay, (3) fraudulent inducement and misrepresentation, (4) negligent misrepresentation, and (5) breach of fiduciary duty. The United States District Court for the Eastern District of Missouri dismissed the counterclaims, denied amendments to two of them, and granted declaratory judgment to Mt. Hawley. On appeal, the United States Court of Appeals for the Eighth Circuit affirmed the decision of the lower court.The appellate court held that the insurance policy required "direct physical loss of or damage to property" for coverage which was not met by the COVID-19 shutdowns. The court also rejected the city's argument that the Additional Covered Property Endorsement in the policy removed the "physical damage or loss" requirement for losses of sales tax revenues. Furthermore, the court found that the city's claims of fraud, misrepresentation and breach of fiduciary duty were not distinct from its breach of contract claim and thus were properly dismissed by the district court. Lastly, the court affirmed the district court's denial of the city's motion to amend its breach of contract and vexatious refusal claims, concluding that the proposed amendments would not have survived a motion to dismiss. View "Mt. Hawley Insurance Company v. City of Richmond Heights" on Justia Law

In this case, the United States Court of Appeals for the Eighth Circuit affirmed the lower court's decision that the Pacific Life Insurance Company did not owe benefits to Katie Blevins, the beneficiary of a life insurance policy taken out by her late fiancé, Dr. Travis Richardson. Richardson applied for a life insurance policy and paid the first month's premium three days before he died. He did not sign the received policy or any required amendments. Blevins claimed that the policy was in effect at the time of Richardson's death, despite the policy not being physically delivered or formally accepted. Blevins also brought claims of bad faith, promissory estoppel, and apparent authority against the insurance company. In its decision, the court stated the policy was clear in its conditions, which required physical delivery and acceptance before the policy was in force. The court found these conditions were not met, as the policy was neither delivered nor accepted by Richardson before his death. Therefore, no death benefit was owed. As a result, Blevins' bad faith claim was also dismissed, as the insurer could not have acted in bad faith if there was no obligation to pay out the policy. View "Pacific Life Insurance Company v. Blevins" on Justia Law

Cynthia Bowen purchased an insurance policy from Farm Bureau Property & Casualty Insurance Company ("Farm Bureau") for her pick-up truck. She was injured when an employee of Menard, Inc. ("Menards") accidentally dropped a large board on her while helping load her truck at a store. Bowen sued Menards for damages, alleging negligence. Menards then filed an action against Farm Bureau seeking a declaratory judgment that it was entitled to a defense and indemnification from Farm Bureau under Bowen's insurance policy. The district court ruled in favor of Menards, finding that Menards and its employee were covered insureds under the policy and that no policy exclusion applied.On appeal, the United States Court of Appeals for the Eighth Circuit reversed the district court's decision. The court concluded that the policy's "Intrafamily Immunity" exclusion applied to the case. This exclusion stated that there was no coverage for any bodily injury to any "insured," which, in this case, included both Bowen and Menards. Therefore, the policy provided no liability coverage for Bowen's claim against Menards, another insured party. The court rejected the district court's reasoning that the term "intrafamily" limited the application of the exclusion, finding that the plain meaning of the operative policy provision prevailed. The court also rejected Menards' argument that Farm Bureau was estopped from asserting this defense to coverage. Consequently, the court reversed the district court's judgment, ruling that Farm Bureau was not obligated to provide defense and indemnification for Menards in connection with the lawsuit brought by Bowen. View "Menard, Inc. v. Farm Bureau P&C Ins. Co." on Justia Law

The United States Court of Appeals for the Eighth Circuit affirmed a district court's ruling that BITCO General Insurance Corporation ("BITCO") had no obligation under its policy to cover damages from an accident involving a truck driven by a contractor engaged by the insured, KAT Excavation Company ("KAT"). KAT had arranged for E&S Quarry ("E&S") to supply rock for a construction project and had engaged other hauling companies, including Chris White Construction ("CWC"), to transport the rock. An accident occurred on a trip to the construction site by Clayton Hamlin, a driver used by CWC. The court held that for a vehicle to be considered a "hired auto" under the insurance policy, there must be a separate contract by which the vehicle is hired or leased to the named insured for their exclusive use or control. The court found that KAT did not exercise the requisite level of control over the dump truck and thus, the driver, Hamlin, was not covered under KAT's insurance policy. View "BITCO General Insurance Corporation v. Smith" on Justia Law

A car dealership, Broadway Ford Truck Sales, Inc., in St. Louis, Missouri, suffered a significant fire damage to its business premises and filed claims under its insurance policy provided by Depositors Insurance Company. However, disputes arose over the coverage and Broadway Ford sued Depositors for breach of contract and vexatious refusal to pay. The United States District Court for the Eastern District of Missouri granted summary judgment favoring Depositors.At the time of the fire, Broadway Ford had an insurance policy that covered loss or damage to its Building and Business Personal Property (Building/Property) and loss of Business Income and Extra Expenses (BI/EE) due to a suspension of operations. Broadway Ford and Depositors later entered into a Limited Settlement Agreement and Release of Disputed Property Damage Claims (LSA), in which Depositors agreed to pay a certain amount for the fire damage and Broadway Ford released Depositors from any claims related to the property damage. BI/EE claims were not included in this agreement and remained open.Broadway Ford’s complaint against Depositors alleged that Depositors breached the policy's implied covenant of good faith and fair dealing and that Depositors’ conduct amounted to vexatious refusal under Missouri law. The district court granted Depositors' motion for summary judgment, finding that Broadway Ford’s complaint was foreclosed by the LSA. On appeal, the United States Court of Appeals for the Eighth Circuit reviewed the grant of summary judgment de novo.The appellate court affirmed the judgment of the district court. The court found that Broadway Ford had released its claims related to the Building/Property coverage in the LSA and could not pursue litigation for additional compensatory damages in the form of the “business income” it lost and the “extra expenses” it incurred due to Depositors’ alleged mishandling of its Building/Property coverage claim. View "Broadway Ford Truck Sales, Inc. v. Depositors Insurance Company" on Justia Law

In this case, the United States Court of Appeals for the Eighth Circuit heard an appeal by Armory Hospitality, LLC, an event venue in Minneapolis, Minnesota. Armory had an insurance policy with Philadelphia Indemnity Insurance Company and filed a claim to recover its business losses due to the closure of bars, restaurants, and performance venues for over a year by Minnesota’s Governor in response to the COVID-19 pandemic. The insurer denied the claim, leading to Armory suing. However, the district court dismissed Armory’s complaint, holding that the policy did not cover the losses, a decision which Armory appealed.The Court of Appeals affirmed the district court’s decision. The court interpreted the insurance policy under Minnesota law, which requires unambiguous policy language to be given its plain and ordinary meaning. Armory sought coverage under three clauses in its policy: the Building Coverage clause, the Business Income clause, and the Civil Authority clause. The first two clauses required “direct physical loss of or damage to” Armory’s property, which the court decided had not been met since the closure of the venue due to the pandemic did not satisfy the physicality requirement. The court disregarded Armory's argument that the "loss of" property included its inability to use its venue, citing previous precedent requiring physicality for both "loss of" and "damage to" property.As for the Civil Authority clause, the court found that Armory could not prove a causal link between the contamination of nearby properties (a hospital and a jail) by COVID-19 and the Governor’s orders to close venues. Hence, the court concluded that Armory could not recover under any of the clauses in its policy, and therefore affirmed the district court's dismissal of Armory's complaint. View "Armory Hospitality, LLC v. Philadelphia Indemnity Ins. Co." on Justia Law

Plaintiff sued Travelers Indemnity Company of America, seeking a declaration that an insurance policy between Travelers and the City of Hermantown authorizes up to $2,000,000 in coverage for his tort claim against the city. The district court granted summary judgment for Plaintiff, and Travelers appeals.   The court concluded that the insurance policy limits the amount of Plaintiff’s recovery to $500,000 and therefore reversed the judgment. The court explained that under Minnesota law, a municipality is liable for its torts and those of its employees acting within the scope of their employment. But a municipality may obtain insurance coverage for damages “in excess of the limit of liability imposed by section 466.04,” and procurement of such insurance waives the statutory limit of liability. The court concluded that the insurance policy authorizes coverage up to only $500,000 for Plaintiff’s claim. The policy provides different limits for different types of liabilities. The policy provides a coverage limit of $2,000,000 for claims not subject to the statutory limit set forth in Minn. Stat. Section 466.04. But for claims subject to the statutory limit in Section 466.04, the endorsement expressly limits coverage to $500,000. The substance of this contractual arrangement is no different than if the parties agreed on two separate policies for the two different types of liability. Plaintiff’s claim for injuries arising from an automobile accident in Hermantown is subject to Minnesota’s $500,000 cap on municipal tort liability. View "James Prisk v. Travelers Indemnity Co. of America" on Justia Law