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

In 2006, Sletten, an orthodontist practicing in Minnesota and Wisconsin, bought general liability and personal injury liability insurance from Continental through Wells Fargo. The next year, Sletten formed S&B, which opened an office in Hudson, Wisconsin and employed Brettin to practice orthodontics there. Sletten notified Wells Fargo that he had opened the Hudson office and requested coverage for the location. Wells Fargo added the Hudson office as an additional insured location but never added S&B as a named insured. In 2012, St. Croix Dental and Wolff sued, that Brettin, acting “on behalf of and with the knowledge and consent of” S&B, used his neighbor’s wireless network to post defamatory comments about St. Croix to the Internet. Brettin allegedly posed as a patient of St. Croix and criticized Wolff’s orthodontia. St. Croix alleged defamation and libel, civil conspiracy, and unfair competition. Continental refused to defend because the policy did not identify S&B as a named insured. S&B and Sletten then sued Continental and Wells Fargo. The Eighth Circuit affirmed dismissal, holding that the policy excluded coverage for acts done with the intent to injure; every claim pleaded that S&B and Brettin acted with the intent to injure. View "Sletten & Brettin Orthodontics, LLC v. Cont'l Cas. Co." on Justia Law

Argonaut sued Audrain County Joint Communications (ACJC) alleging ACJC's negligence in monitoring a security alarm panel caused or contributed to damages arising out of the burglary and fire of a grocery store insured by Argonaut. Public employees at the ACJC call center monitored a private security company's alarm panels. The panels were defective. ACJC argued that it was entitled to sovereign immunity as a Missouri state entity, and to statutory immunity as a 911 call center. The district court denied summary judgment after finding ACJC had waived its sovereign and statutory immunity by purchasing insurance. The Eighth Circuit dismissed part of an interlocutory appeal for lack of jurisdiction, but otherwise affirmed. Missouri Revised Statutes Section 537.600 generally preserves "sovereign or governmental tort immunity as existed at common law" and specifically refers to "the immunity of [a] public entity from liability and suit." Section 190.307, however, does not create a substantive right to be free from the burdens of litigation. There was no clear error in the district court's determination under section 537.600 that ACJC did not prove the existence of a pre-existing agreement between itself and the insurer to include the sovereign immunity endorsement with the original policy. View "Argonaut Great Cent. Ins. Co. v. Audrain Cnty. Joint Commc'ns." on Justia Law

A “viatical” or “life settlement” permits an insured to sell his life insurance policy. Federal tax and some state laws have been amended to accommodate the practice. In 2006, an agent persuaded Close, age 74, to apply for a $5 million life insurance policy. As submitted to PHL, his application falsely stated Close’s net worth and income, and failed to disclose his conviction for receiving illegal kickbacks. Under the agent’s guidance, Close falsely stated his net worth to obtain a two-year, $300,225 premium financing loan from CFC, a PHL-approved funding source. The policy was pledged as collateral; Close personally guaranteed 25 percent of the loan, believing that the policy would be worth $1.3 million in two-years, when it became “incontestable” under Minn. Stat. 61A.03.1(c) and that he would be able to sell it for $500,000. PHL conducted minimal investigation and received premiums of $272,025; CFC received $14,200 in fees; and the agent and a CFC employee split substantial commissions. In 2009, BNC explained Close’s options for repayment: refinancing, selling, or relinquishing the policy to the lender. The secondary market had crashed. Close surrendered the policy. When Close died in 2011, investigation revealed the fraudulent misrepresentations, but rescission was foreclosed by the incontestability statute. PHL sought a declaratory judgment that the policy was void as contrary to public policy for lack of an insurable interest. The district court agreed. The Eighth Circuit reversed, stating that permitting insurers to resist paying based on evidence that an insured used premium financing and planned to sell, is “not a result the Supreme Court of Minnesota would find acceptable in exercising its ‘delicate and undefined power’ to declare a contract void. View "PHL Variable Ins. Co. v. Bank of Utah" on Justia Law

Highland Bank made a loan to FPC, an equipment lease finance company, based on an assignment of leases. The underlying leases, guaranteed by individuals, were ultimately discovered to be a Ponzi scheme. A guarantor claimed her signature was a forgery. Highland lost more than a million dollars. BancInsure denied Highland’s claim under a Financial Institution Bond that covered “Loss resulting directly from the Insured having . . . acquired, sold or delivered, given value, extended credit or assumed liability on the faith of any original . . . personal Guarantee . . . which bears a signature of any . . . guarantor . . . which is a Forgery.” BancInsure sought a declaratory judgment that Highland's claim was not covered. The district court granted summary judgment to BancInsure, finding that the loss did not “result directly from” a forged personal guaranty because the guaranty was worthless to the bank when it entered into the transactions. While appeal was pending, BancInsure was placed into receivership with the Oklahoma Insurance Commissioner as Receiver under a final order of liquidation. The Eighth Circuit affirmed. Highland failed to show the “direct relation between the injury asserted and the injurious conduct alleged” that the doctrine of proximate cause demands. View "BancInsure, Inc. v. Highland Bank" on Justia Law

Brooks was riding her bicycle when Lawrence negligently struck her with his car. Lawrence later died of unrelated causes. Brooks sued Lawrence’s estate, which settled for the $50,000 limit of Lawrence’s auto insurance policy. Brooks agreed not to seek additional recovery from Lawrence’s estate, heirs, or insurer, but retained the right to seek recovery from the Brookses’ auto insurance policy (Midwestern), which provides underinsured motorist (UIM) bodily injury coverage. On the declarations page for the UIM endorsement, the policy states, “Insurance is provided where a premium entry is shown for the coverage.” This page lists “Underinsured Motorist Bodily Injury” with liability limits of $100,000 per-person and $300,000 per-accident. A premium amount appears for each of five vehicles, indicating the Brookses pay a premium for UIM coverage for each vehicle. Midwestern paid $100,000, declaring this per-person limit the maximum amount for a single application of the policy’s UIM coverage, then sought declaratory judgment that its UIM coverage limits for multiple vehicles do not stack to multiply the per-person limit. Granting Midwestern summary judgment, the district court determined the plain language of the policy makes it “quite clear” intra-policy stacking is prohibited and the per-person limit for one accident is $100,000. The Eighth Circuit affirmed. View "Midwestern Indem. Co. v. Brooks" on Justia Law

Argonaut filed suit against ACJC, alleging that ACJC's negligence in monitoring a security alarm panel caused or contributed to damages arising out of the burglary and fire of a grocery store insured by Argonaut. The district court denied summary judgment to ACJC, finding that ACJC had waived its sovereign and statutory immunity by purchasing insurance. ACJC filed an interlocutory appeal. The court concluded that it lacked jurisdiction to address the question whether ACJC's purchase of insurance also waived any statutory immunity it might enjoy under Section 190.307 of the Missouri Revised Statutes as a 911 call center where the statute does not extend to ACJC a substantive right to be free from the burdens of litigation. The court found no clear error in the district court's determination that ACJC did not prove the existence of a pre-existing agreement between itself and the insurer to include the sovereign immunity endorsement with the original policy. Accordingly, the court affirmed the district court's determination that ACJC waived the common law sovereign immunity provided by Section 537.600 of the Missouri Revised Statutes through its purchase of insurance. The court dismissed the remaining portions of the interlocutory appeal based on lack of jurisdiction. View "Argonaut Great Central Ins. v. Audrain Cnty. Joint Commc'n" on Justia Law

Johnson’s trucking business operated 1986 and 1987 semi-tractor trucks, with one truck at a time insured through Acuity. In 2009, Johnson called Acuity’s agent, Holden, to switch insurance coverage to the 1987 truck. The 1987 truck broke down the next day. Johnson called Holden to switch the insurance back to the 1986 truck. A year later, Johnson's 1986 truck, pulling a J&B trailer, collided with Marlow’s vehicle, causing her death. Western insured the trailer. Holden claimed that Johnson had called in February 2010 and requested to switch coverage to the 1987 truck. Johnson denied ever making that request. At trial, Johnson pointed out that the 1987 truck remained inoperable; Johnson operated the 1986 truck throughout 2010. Johnson’s February 2010, renewal policy identified the 1986 International as covered. Johnson advised J&B that he would use the 1986 truck. Acuity and Johnson settled. The court denied Acuity’s motion to dismiss Johnson. Western's cross-claim against him remained pending; Johnson had assigned his claims against Western to Acuity and Acuity agreed to indemnify Johnson. Acuity paid $561,000 to Marlow’s estate and sought reimbursement. The court viewed the dispute as whether Johnson instructed Holden to change the coverage and rejected Acuity’s claim that Western lacked standing. The jury found that Johnson did not request a change. The court declared that Acuity had to provide primary insurance coverage. The Eighth Circuit affirmed, agreeing that the controversy did not concern contract reformation and upholding the district court's decision to allow Johnson to participate at trial. View "ACUITY v. Johnson," on Justia Law

In 2002 an uncontrolled, runaway commercial aircraft at Las Vegas’s McCarran International Airport came to a rest at the bottom of an embankment. A maintenance worked had failed to properly engage the parking brake. The resulting property damage and loss-of-use of the aircraft totaled more than $10 million. The aircraft’s owner, Northwest Airlines, obtained a default judgment in Minnesota state court against PALS, the maintenance company responsible for the wreck, then commenced a garnishment action to recover part of the amount from PALS’s insurer, Westchester, which argued that PALS’s failure to provide notice and to cooperate extinguished Westchester’s payment obligation. While acknowledging unanswered questions of state law, the Eighth Circuit affirmed judgment in favor of Northwest. A Clark County ordinance mandates hangar-keepers liability insurance to protect parties like Northwest. Given this purpose, insurance coverage could not be avoided for an insured’s simple failure to satisfy the technical post-loss conditions on statutorily mandated coverage. View "NW Airlines, Inc. v. Westchester Fire Ins. Co." on Justia Law

PIC sought a declaratory judgment to determine whether PIC was required to defend and indemnify its insured, LSi, a computer and technology company with respect to a lawsuit filed by Hodell, concerning business software developed and sold by LS. The district court found LSi did not have coverage under either of its consecutive policies with PIC because it did not provide notice of Hodell’s claims or potential claims to PIC as required. There were regular email references to possible legal action as early as March, 2007. On November 21, 2008, Hodell filed suit against LSi. On December 8, 2008, LSi first notified PIC of Hodell’s claims. The Eighth Circuit affirmed judgment in favor of PIC, reasoning that a claim was made while the 2007 policy was in place, but LSi did not properly give notice under that policy. View "Philadelphia Cons. Holding Corp. v. Hodell-Natco Indus., Inc." on Justia Law

From 1995-2009, Johnson worked for CRE. In the last three years, Johnson worked from home, 8 hours a day at a computer. Johnson was covered under CRE’s United disability insurance policy. In 1999, Johnson was diagnosed with fibromyalgia. In 2004, she underwent neck surgery for nerve injuries. On the day she resigned, Johnson visited MacDonald, her primary care physician, who diagnosed anxiety, depression, fibromyalgia, and chronic pain. Johnson completed a short-term disability form. MacDonald completed an Attending Physician’s Statement. United denied the application. Based on the recommendations of its doctor, United denied Johnson’s appeal. Johnson sought long-term disability benefits. MacDonald completed a Physician’s Statement that imposed multiple limitations. United denied the claim. Johnson appealed. United referred Johnson’s file and medical records to Boscardin, an orthopedic surgeon, who determined that, although Johnson experienced chronic pain in her neck and spine, Johnson’s complaints were not supported by “conclusive, objective evidence.” McClellan, Johnson’s surgeon, responded that he “[o]verall” agreed with Boscardin. United denied the appeal. Johnson sued under ERISA. The district court granted Johnson summary judgment, finding that United failed to consider Johnson’s condition as a whole. The Eighth Circuit reversed, finding the denial supported by substantial evidence. View "Johnson v. United of Omaha Life Ins. Co." on Justia Law