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

This case arose when plaintiff fell from the trunk of the car that her friend was driving and sustained serious injuries. In a related case, the district court held a bench trial to apportion the fault between the friends involved in the accident. In this case, plaintiff filed suit to recover the portion of the judgment allocated to one of the friends, seeking underinsured motorist benefits for the friend's portion of the judgment. The district court granted Owners' motion for summary judgment.The Eighth Circuit held that removal was not proper under diversity jurisdiction where the parties conceded that the amount in controversy was statutorily insufficient. The court also held that there was no supplemental jurisdiction because this case was a separate action and not another claim in an underlying action over which the federal courts have jurisdiction. Accordingly, the court vacated and remanded to the district court with instructions to remand the case to state court. View "Mensah v. Owners Insurance Co." on Justia Law

Russell, Daniel, and Carson co-owned a business. Under a succession plan, the company was to purchase life insurance. If a shareholder died, the company would use the proceeds to buy the deceased shareholder’s stock. Daniel died. The company received insurance proceeds and kept the money. Elizabeth, Daniel’s widow, sued Russell and Carson for conversion and breach of fiduciary duty. A Kansas court issued a judgment against Russell for $822,900.77. Russell and Carson had expected Liberty to defend and indemnify them under their Directors, Officers and Company Liability Coverage and Fiduciary Liability Coverage. Liberty cited a “Personal Profit Exclusion” for claims based upon "gaining ... any profit, remuneration or financial advantage” to which they are “not legally entitled” and a “Contract Exclusion” regarding claims "attributable to any actual or alleged liability under or breach of any contract.” Russell and Carson sued Liberty in Missouri state court for bad-faith. Elizabeth joined the suit. Liberty, a corporate citizen of Massachusetts and Illinois, removed the case to federal court. Russell and Carson sought remand, arguing that in “direct action[s]” against insurers, the insurer takes the citizenship of those it insures, 28 U.S.C. 1332(c)(1); if the Trust’s equitable garnishment claim was a direct action, Liberty shared Russell’s Missouri citizenship.The district court held that the equitable garnishment claim required Russell as a defendant, but Russell’s bad-faith claim required him as a plaintiff. The court severed the suit: Russell and Carson could sue for bad-faith failure to defend and indemnify; the Trust could separately sue Liberty and Russell. The Eighth Circuit affirmed summary judgment on the bad faith claim. Because the Missouri statutory claim is not a direct action, complete diversity exists. The district court had jurisdiction over the bad-faith claim. The policy exclusions applied. View "Russell v. Liberty Insurance Underwriters, Inc." on Justia Law

The Eighth Circuit affirmed the district court's determination that Westfield had a duty to defend its insurer, Miller Architects and Builders, because the claims against Miller in the underlying action did not "clearly" fall outside the scope of coverage. The court held that the alleged damages from the leaky roof were arguably within the policy's scope and there are no clearly applicable exclusions. View "Westfield Insurance Co. v. Miller Architects & Builders" on Justia Law

After an underground storage facility in a cave that formerly housed a limestone mine experienced a series of dome-outs, the primary insurer sought a declaratory judgment that the operator of the facility's claimed losses were not covered. Four excess insurers also sought declarations of no coverage; the operator of the facility, Interstate, counterclaimed against the insurer, alleging a vexatious refusal to pay claim under Missouri law; and the district court granted summary judgment for the insurers.The Eighth Circuit affirmed the district court's judgment, holding that the insurers were entitled to the declaratory judgment that no coverage existed under the respective policies. The court applied the meaning that would be attached by an ordinary person of average understanding, and held that the district court properly dismissed Interstate's claims because the rubble zone above the natural ceiling of Interstate's facility was not part of the "building." The court explained that, because the decay that caused the dome-outs in this case occurred within the rubble zone, it follows that the dome-outs were not caused by "building decay" within the meaning of the policy. View "Westchester Surplus Lines Insurance Co. v. Interstate Underground Warehouse & Storage, Inc." on Justia Law

The decedent had insurance policies with Unum Life. After he died, he was survived by two minor children and his domestic partner. The district court granted a declaratory judgment, holding that Unum Life had adopted an unreasonable interpretation of the plans to support its decision to pay the domestic partner rather than the decedent's estate.The Eighth Circuit reversed, holding that Unum life reasonably interpreted the plan as allowing it to pay a decedent's domestic partner in the absence of a designated beneficiary. In this case, it was reasonable for Unum Life to interpret the word "spouse" in the plan to include domestic partners and to pay the death benefits to the covered person's domestic partner. Accordingly, the court remanded with instructions to enter judgment in defendant's favor. View "Engle v. Land O'Lakes, Inc." on Justia Law

Insured Directors, plaintiffs in this declaratory judgment action seeking to allocate defense costs among insured and uninsured parties, appealed the district court's adverse grant of summary judgment in favor of National Union. The court affirmed and held that the Insured Directors' failure to carry their burden of showing entitlement to 100% coverage was the dispositive issue before the district court and was dispositive on appeal. In this case, the district court appropriately considered the only issue properly raised before it. Therefore, the district court did not err in concluding that the Insured Directors failed to meet their burden of proving an allocation different from that proposed by National Union. View "Brand v. National Union Fire Insurance Co." on Justia Law

After the jury awarded damages to a sexual assault victim who was under the care of New Horizon, RSUI filed this action seeking a declaratory judgment that the policy's "Sexual Abuse or Molestation" exclusion barred coverage for the underlying damage award above Travelers' policy limits. The district court granted summary judgment for New Horizon.The Eighth Circuit held that RSUI, an excess liability insurer that did not control the defense of its insured in the underlying suit, must be afforded an opportunity to prove in a subsequent coverage action that the jury award included damages for uncovered as well as covered claims. If the insurer sustains that burden, the court held that the district court must then allocate the award between covered and uncovered claims. Therefore, the court reversed and remanded. View "RSUI Indemnity Co. v. New Horizon Kids Quest, Inc." on Justia Law

The Eighth Circuit affirmed the district court's grant of summary judgment for the insurance company in an action brought by McCrossan, alleging breach of the crime insurance policy after the company denied coverage under the "Forgery" and "Employee Theft" insuring clauses. The court held that the district court properly granted summary judgment to the Company on McCrossan's claims for Stewart's loss, because Stewart did not meet the policy's definition of "subsidiary," and was not an insured. The court also held that the district court properly granted the Company summary judgment on McCrossan's claims for Blakely's loss, because the acts of Blakely's employee, as an unauthorized representative of Blakely, were not covered by the plain and ordinary meaning of the insurance policy. View "C.S. McCrossan Inc. v. Federal Insurance Co." on Justia Law

The Eighth Circuit affirmed the district court's order granting judgment for GEICO in an action seeking a declaratory judgment that the stacking provisions of other liability coverage in the insurance policy were not applicable to the claims at issue. The court held that the district court did not err in ruling on the declaratory judgment action, because the insurance policy unambiguously did not allow stacking under Missouri law. The court also held that the district court did not abuse its discretion in refusing further discovery, because Missouri law does not permit courts to consider extrinsic evidence in interpreting an unambiguous contract. View "GEICO Casualty Co. v. Isaacson" on Justia Law

Allstate filed suit seeking a declaratory judgment that the insureds violated the intentional acts exclusion of their insurance policy and that Allstate was entitled to recover its payment to the mortagees. Allstate concluded that the insureds' property was set on fire by or at the direction of one of the insureds. The district court denied the insureds' motion for summary judgment, and Allstate prevailed at trial.The Eighth Circuit affirmed, holding that the district court did not make a clear and prejudicial error affecting the outcome of the proceeding by admitting the expert opinions; the district court did not err in denying the insureds' motion for judgment as a matter of law, because the combination of Allstates' expert testimony regarding the possible causes of the fire, the rapid nature of the blaze, evidence of the insureds' financial incentives, and potential negative credibility determinations by the jury against the insureds suffices to meet the burden of submissibility; the denial of the insureds' motion for a new trial was not a miscarriage of justice in light of the evidence; the district court was entitled to order restitution of the amount paid the mortgagees as a means of effectuating the verdict in favor of Allstate in a declaratory judgment action; and judgment was properly entered against the co-insured, even where the verdict director focused on the other insured. View "Allstate Indemnity Co. v. Dixon" on Justia Law