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

The Eighth Circuit held that the district court erred in holding that the misstatement clause in the contested life insurance policy did not apply where it might (or would) reduce the benefits of an incontestable policy to zero. In this case, the policy contained a provision that the policy was incontestable after two years, as well as a provision which permitted the insurer to reduce the benefit to the amount the premium would have purchased at the insured's correct age. The court explained that it was not apparent from the language in the policy that the amount payable was limited to the benefits available under the policy the insured actually purchased if she was ineligible for it at her age. Therefore, the court affirmed the district court's denial of summary judgment to Farmers, but reversed its grant of summary judgment to plaintiff, remanding for further proceedings. View "Yang v. Farmers New World Life Insurance Co." on Justia Law

The Eighth Circuit affirmed the district court's grant of summary judgment to American Family in an action alleging breach of contract, negligent misrepresentation, and violation of Minnesota's consumer fraud statutes. The court held that American Family did not breach the contract because nothing in the policy imposed on American Family a contractual obligation to make objectively reasonable or accurate replacement cost estimates; American Family did not negligently misrepresent the replacement cost of plaintiffs home where, regardless of any breach of duty, no genuine dispute existed as to justifiable reliance upon the estimates; and plaintiffs could point to any promise, misrepresentation, or false statement made by American Family, let alone one that they relied upon, justifiably or unjustifiably, in deciding to purchase or renew the policy. View "Nelson v. American Family Mutual Insurance Co." on Justia Law

The Eighth Circuit reversed the district court's dismissal of a breach-of-contract action to recover unpaid insurance premiums. The court held that the administrative procedures available to the insurer were too informal to require exhaustion under then-applicable Missouri law. Therefore, Travelers had no obligation to exhaust its administrative remedies before filing its lawsuit. The court remanded for further proceedings. View "Travelers Property Casualty Insurance Company of America v. Jet Midwest Technik" on Justia Law

The Eighth Circuit affirmed the district court's dismissal of an action against WireCo's workers' compensation insurance carriers, Liberty, seeking damages for excess premiums that WireCo allegedly paid on three of Liberty's insurance policies. The court held that the plain language and established purpose of the Missouri vexatious refusal to pay statute indicated that it applied to claims filed under a policy that related to a covered loss and that a breach of a contract of overcharging or of failure to refund premium was not a loss contemplated by the statute. Therefore, a loss under the statute did not include excess premium payments.The court also held that only the theories of breach of contract were before the district court at summary judgment; even assuming the rating plans were incorporated into the policies, and that Liberty breached the contracts, WireCo must present evidence that Liberty's alleged breaches caused WireCo to suffer damages; and Liberty was entitled to summary judgment on WireCo's breach of contract claims because WireCo failed to present evidence that it would have paid lower premiums if Liberty had complied with the notice and documentation requirements of the Missouri and Texas schedule rating plans. View "WireCo WorldGroup, Inc. v. Liberty Mutual Fire Insurance Co." on Justia Law

The Eighth Circuit affirmed the district court's grant of summary judgment deferring to an insurance policy interpretation made by the FCIC and a determination regarding the FCIC's authority made by the RMA. The court held that the clear language of the Federal Crop Insurance Act indicated that Congress intended the Corporation to have extensive and broad authority; given the FCIA's broad grant of authority to the Corporation, and the specific authority over the provisions of insurance and insurance contracts found in 5 U.S.C. 1505 and 1506, substantial deference was given to the FCIC's interpretation of the special provision; and, considering the plain language of the insurance contract and the deference given to the RMA in its role of supervisor of the FCIC, the RMA's determination that the FCIC was required to provide an interpretation of the special provision to the arbitrating parties was not clearly erroneous. View "Bottoms Farm Partnership v. Perdue" on Justia Law

The Eighth Circuit affirmed the district court's grant of summary judgment to State Farm on plaintiff's bad faith tort claim and on an evidentiary ruling on the underinsured motorist coverage claim. The court held that the district court applied the proper legal standard of Arkansas substantive law, and that there was no genuine issue of material fact that State Farm's conduct did not constitute bad faith. The court also held that the district court did not err in excluding plaintiff's proposed evidence regarding State Farm's practice of denying claims as that evidence had no bearing on the amount of damages on plaintiff's underinsured motorist claim. View "Sims v. State Farm Mutual Automobile Insurance Co." on Justia Law

Federal filed suit seeking a declaratory judgment determining the parties obligations and any priority coverage in an underlying wrongful death suit. The Eighth Circuit held that repeatedly shooting, and encouraging others to shoot, a handgun "in the general direction" of a small lake in a residential area of Kansas City, Missouri, which results in a young child's death, qualified as "gross negligence." In this case, the employee of the insured was convicted of reckless killing and his criminal conduct was determined through state court criminal proceedings. The court held that, because the conduct constituted gross negligence under the relevant indemnity clause, defendant Great American was not liable for the loss, and the district court erred in relying on the clause to require Great American to indemnify Federal and Zurich. The court vacated and remanded for further proceedings. View "Federal Insurance Co. v. Great American Insurance Co." on Justia Law

Welspun filed suit against its insurer, Liberty Mutual, arguing that its unpaid mitigation costs were "necessary expenses" included in the policy's loss of business income coverage. The Eighth Circuit affirmed the district court's grant of summary judgment for Liberty Mutual. The court held that the district court did not err in limiting necessary expenses covered in Paragraph C.2. of the policy to expenses incurred to avoid or reduce a loss of business income; reading the loss of business income policy provisions together, in light of their historical roots and obvious purpose, the court agreed with the district court that "necessary expenses" in Paragraph C.2. were limited to expenses that reduce a covered business income loss; and the incremental costs Welspun incurred in shifting some Seaway production to an affiliate in India were not "necessary expenses" within the meaning of Paragraph C.2. of the policy. View "Welspun Pipes Inc. v. Liberty Mutual Fire Insurance Co." on Justia Law

Fidelity filed suit seeking a declaration that a title insurance policy did not cover mechanics' liens. Captiva filed counterclaims, which sought a declaration that the policy covered the mechanics' liens and which asserted claims against Fidelity for failing to diligently defend and resolve the mechanics' liens claims and for tortiously interfering with Captiva's relationship with the attorneys Fidelity had hired to defend Captiva. The Eighth Circuit held that the district court did not apply the correct legal standard in deciding that Title Insurance Policy Exclusion 3(a) did not apply to the mechanics' liens at issue in this case; Exclusion 3(a) can apply under Missouri law even if the insured did not engage in intentional misconduct or inequitable dealings; Captiva failed to show that the title was unmarketable on or before the effective date of the policy and thus failed to prove its claim that Fidelity breached the policy's unmarketability-of-title provision; and thus the court affirmed the dismissal of the tortious interference claim, vacated the judgment and remanded for further proceedings, and also vacated the order awarding attorneys' fees and costs. View "Captiva Lake Investments v. Fidelity National Title Insurance" on Justia Law

Fidelity filed suit seeking a declaration that a title insurance policy did not cover mechanics' liens. Captiva filed counterclaims, which sought a declaration that the policy covered the mechanics' liens and which asserted claims against Fidelity for failing to diligently defend and resolve the mechanics' liens claims and for tortiously interfering with Captiva's relationship with the attorneys Fidelity had hired to defend Captiva. The Eighth Circuit held that the district court did not apply the correct legal standard in deciding that Title Insurance Policy Exclusion 3(a) did not apply to the mechanics' liens at issue in this case; Exclusion 3(a) can apply under Missouri law even if the insured did not engage in intentional misconduct or inequitable dealings; Captiva failed to show that the title was unmarketable on or before the effective date of the policy and thus failed to prove its claim that Fidelity breached the policy's unmarketability-of-title provision; and thus the court affirmed the dismissal of the tortious interference claim, vacated the judgment and remanded for further proceedings, and also vacated the order awarding attorneys' fees and costs. View "Captiva Lake Investments v. Fidelity National Title Insurance" on Justia Law