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

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

K.C. Hopps, Ltd., sued its insurer, The Cincinnati Insurance Company, seeking coverage for lost business income incurred during the COVID-19 pandemic. Cincinnati moved for summary judgment based on K.C. Hopps’s inability to show physical loss or damage, which the district court denied. After the jury returned a verdict for Cincinnati, K.C. Hopps renewed its motion for judgment as a matter of law and moved for a new trial. The district court denied both motions.   The Second Appellate District affirmed. The court explained that K.C. Hopps alleged that COVID-19 particles were present at its properties. The court wrote that has repeatedly rejected similar claims for COVID-19-related business interruptions because the insured did not sufficiently allege physical loss or damage. The court explained that even if K.C. Hopps could show actual contamination of its properties, any possible contamination was not the cause of its lost business income. K.C. Hopps did not limit its operations because COVID-19 particles were found at its properties—it did so because of the shutdown orders. K.C. Hopps remained open until government orders limited its operations. And even if its premises weren’t contaminated, K.C. Hopps “would have been subject to the exact same restrictions.” View "K.C. Hopps, Ltd. v. The Cincinnati Insurance Co." on Justia Law

Following a shooting at a bar in downtown St. Louis, Missouri, Plaintiff, who was injured as a bystander, obtained a $2.5 million judgment against the bar’s owner and operator, Steven Scaglione. Plaintiff thereafter filed this equitable-garnishment claim against Scaglione and his insurer, Acceptance Indemnity Insurance Company (Acceptance). Scaglione filed cross-claims against Acceptance, alleging that it had, in bad faith, failed to defend or indemnify him and breached its fiduciary duty. Acceptance filed motions to dismiss both Plaintiff’s and Scaglione’s claims, which the district court granted based on the applicability of an assault-and-battery exclusion in Scaglione’s policy. In this consolidated appeal, both Plaintiff and Scaglione assert that the district court erred in dismissing their claims. 
 The Eighth Circuit affirmed. The court explained that the district court did not suggest that the assault-and-battery exclusion did not apply solely because the purported victim was not the target. Accordingly, the court rejected this argument and concluded that the unambiguous policy language covers claims of injuries sustained by innocent bystanders arising out of an assault and battery. The court thus concluded that the policy exclusion applies. Further, the court concluded that Scaglione’s negligence was not independent and distinct from the excluded assault and battery. The court explained that the concurrent-proximate-cause rule thus does not apply, and, therefore, the exclusion bars coverage under the policy. Without coverage, Plaintiff and Scaglione cannot state a claim. The district court thus did not err in granting the motions to dismiss. View "Steven Scaglione v. Acceptance Indemnity Ins Co" on Justia Law

Plaintiff sued Reliance Standard Life Insurance Company under 29 U.S.C. Section 1132(a)(1)(B), seeking to recover long-term disability benefits. The district court granted Plaintiff’s motion for summary judgment and denied Reliance’s cross-motion. Reliance appealed, and the Eighth Circuit reversed.   The court explained that the cases cited do not demonstrate that Reliance has a history of biased claims administration. Nor do they show some other systemic flaw in its claims review process that affected Reliance’s review of Plaintiff’s claim. On the other hand, Reliance does not argue that it maintained structural separations to minimize its conflict of interest. Therefore, the conflict of interest, in this case, deserves “some weight,” but the court concluded that it does not indicate that Reliance abused its discretion. The court wrote that substantial evidence supports Reliance’s decision, and neither the decisional delay in this case nor the purported conflict of interest leads us to conclude that Reliance abused its discretion. View "Melissa McIntyre v. Reliance Standard Life" on Justia Law

Boulevard RE Holdings, LLC (Boulevard) sued Mixon Insurance Agency, Inc. (Mixon), alleging breach of contract and negligent procurement of insurance. Mixon moved for summary judgment. The district court granted Mixon’s motion. Boulevard appealed that order. On appeal, Boulevard challenged the district court’s conclusions that Mixon had no duty to know or discover whether Boulevard was a mortgagee under Missouri law and that Mixon’s actions did not cause Boulevard’s alleged damages.   The Eighth Circuit affirmed. The court reasoned that even assuming that the district court erred in concluding that Mixon did not have a duty to know or discover whether Boulevard was a mortgagee, summary judgment in favor of Mixon was proper because Boulevard cannot show Mixon caused its alleged damages. Noncompliance with the policy, not Mixon’s failure to notify, barred recovery. Therefore, Bell is inapplicable. The district court did not err in granting Mixon’s motion for summary judgment. View "Boulevard RE Holdings, LLC v. Mixon Insurance Agency, Inc." on Justia Law

In March 2020, Concord Baptist Church of Jefferson City, Inc. (Concord Baptist) sustained damage to its facilities in a severe storm. After disagreements with its insurer, Church Mutual Insurance Company (Church Mutual), regarding the amount of loss, Concord Baptist initiated this action, alleging breach of contract and vexatious refusal to pay. The district court granted summary judgment in favor of Church Mutual, concluding that the undisputed facts demonstrated that Concord Baptist failed to comply with a cooperation clause contained in the insurance policy, which precluded coverage. Concord Baptist appealed.   The Eighth Circuit affirmed. The court explained that because Concord Baptist admits that it materially breached the policy, the court need not address Concord Baptist’s argument regarding whether the failure to submit to an EUO was a material breach. However, the court noted that Missouri courts have found a material breach where an insured failed to submit to an EUO before commencing an action against the insurer. Regarding the second element, whether Church Mutual suffered substantial prejudice from Concord Baptist’s material breach, the court agreed with the district court that the undisputed facts show that it did. Finally, as to the third element, whether Church Mutual exercised reasonable diligence in attempting to procure Concord Baptist’s cooperation, the court again agreed with the district court that the undisputed facts demonstrate Church Mutual’s diligence. View "Concord Baptist Church of Jefferson City v. Church Mutual Insurance Company" on Justia Law

Plaintiffs brought this action against West Bend Mutual Insurance Company (“West Bend”) after West Bend refused to pay claims for uninsured/underinsured (“UM/UIM”) benefits under an insurance policy that insured Plaintiffs. The district court granted summary judgment in favor of West Bend. Plaintiffs contended the district court erred in concluding that British Columbia law rather than Iowa law determines the extent of Plaintiffs’ recoverable damages under the Policy.   The Eighth Circuit affirmed. The court explained that while Plaintiffs assert contract conflict of laws principles set forth in the Restatement (Second) of Conflict of Laws (“Restatement”) require that Iowa law determine the extent of their recovery, Hall v. Allied Mutual Insurance Co specifically held that no conflict of laws problem exists when the tortfeasor is only subject to personal jurisdiction in courts that would apply identical law. Further, the court wrote that Section 516A.1 only requires that insurance companies offer the type of coverage at issue in this case. The statute does not define what it means for an insured to be “legally entitled to recover” damages from an uninsured or underinsured motorist such that it could abrogate Hall. Finally, the court found that the plain language of this provision provides only that West Bend may “reduce” its otherwise applicable coverage by certain other amounts available. Where, as here, the insurer has no liability under the Policy’s coverage provisions, the Available Insurance Provision does not operate as an affirmative grant of coverage extending to what are otherwise uncovered losses. View "Gregg Geerdes v. West Bend Mutual Insurance Co." on Justia Law