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

Lindenwood Female College (Lindenwood) asserted class action claims against its casualty insurer, Zurich American Insurance Company (Zurich), alleging a wrongful denial of coverage for COVID-19 business interruption at its Missouri and Illinois properties. The district court granted Zurich’s motion to dismiss, finding no plausible allegation of coverage.   The Eighth Circuit affirmed. The court concluded that Lindenwood’s argument fails to identify an ambiguity. The court explained that in its view, no lay person—no reasonable insured—could look at the policy as a whole and fail to appreciate that the state-specific endorsements are intended to apply in the respective states. The references to Louisiana and other states are not mere titles; they serve to establish the structure of the policy as a whole. And it would simply make no sense to define a contamination exclusion with express reference to viral contamination in the main body of the policy only to wholly eliminate that same exclusion nationwide in a later endorsement that references an individual state. View "Lindenwood Female College v. Zurich American Insurance Co." on Justia Law

Martinique Properties, LLC filed a complaint against Certain Underwriters at Lloyd’s, London (Underwriters), seeking to vacate an arbitration award. The district court dismissed the complaint for failure to state a claim for vacatur. Martinique Properties appealed. Martinique Properties argues that the appraisal award must be vacated because the appraisers “used figures and measurements which are contrary to the actual conditions of the Property” and failed to “consider certain buildings” and certain portions of a damaged roof when determining the appraisal award. These alleged errors, Martinique Properties argues, show that the appraisers were either “guilty of misconduct” or “so imperfectly executed” their powers that “a mutual, final, and definite award . . . was not made,” two of the four grounds for vacating an award under the FAA.   The Eighth Circuit affirmed. The court found that Martinique Properties has alleged only factual errors that challenge the merits of the appraisal award, and the court has no authority to reconsider the merits of an arbitration award, even when the parties allege that the award rests on factual errors. Accordingly, the appraisers’ use of certain figures and measurements in calculating the amount of loss here, and their alleged failure to consider particular buildings and portions of roof damage, even if incorrect, are not sufficient for vacatur under the FAA. View "Martinique Properties, LLC v. Certain Underwriters at Lloyd's of London" on Justia Law

Plaintiffs are three skiers who purchased an Ikon Pass for the 2019–20 ski season. Each pass provided purchasers with unlimited ski access at participating Ikon resorts in North America. Along with their Ikon Pass, Plaintiffs purchased an optional Ski Pass Preserver insurance policy from Arch. After Plaintiffs purchased their passes, state and local governments issued orders, colloquially called “stay-at-home orders,” to prevent the spread of COVID-19. In response to these orders, ski resorts throughout North America closed with approximately one-third of the ski season remaining. Plaintiffs sought reimbursement for the loss of their ski pass benefits under the policy based on the Season Pass Interruption coverage. Arch denied their claims. The company took the position that the stay-at-home orders were not quarantines under the policy, later posting a “blanket denial” for such claims on its website. Plaintiffs filed one master consolidated class action complaint on behalf of themselves and a nationwide putative class of individuals who purchased the Ski Pass Preserver policy for the 2019–20 ski season. The district court concluded that Plaintiffs did not plausibly allege a covered loss because the term “quarantined,” as used in the policy, did not encompass stay-at-home orders that merely limited travel and activities.   The Eighth Circuit affirmed. The court explained that the ordinary person at the time the Ski Pass Preserver policy was purchased would have understood “quarantined” to mean the compulsory isolation of the insured. Reading the policy as a whole, this is the only reasonable construction, and the court agreed with the district court that the policy language is unambiguous. View "Mark Rossi v. Arch Insurance Company" on Justia Law

Plaintiff sued Minnesota Life Insurance Company and Securian Life Insurance Company, alleging that their denial of her claim for life insurance benefits violated the Employee Retirement Income Security Act (“ERISA”). The district court dismissed her complaint under the Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim.   The Eighth Circuit affirmed. The court concluded that the district court properly dismissed Plaintiff’s Section 1132(a)(3) claim. First, her contention that Minnesota Life and Securian failed to notify her husband of his conversion right does not amount to a breach of fiduciary duty because the terms of her husband’s policy did not require notice, and Plaintiff points to no provision of ERISA that would require such notice. Second, her assertion that Minnesota Life and Securian misrepresented that her husband’s conversion window would be extended rests on a misreading of the February 24 letter; Minnesota Life and Securian made no such representation. View "Kristina Powell v. Minnesota Life Insurance Co." on Justia Law

After her husband died of a heroin overdose, Plaintiff sought accidental death benefits under an employer-sponsored benefit plan governed by the Employee Retirement Income Security Act of 1974 (ERISA). The plan’s insurer, Symetra Life Insurance Company, denied her claim, and Plaintiff sued. The district court granted summary judgment in Plaintiff’s favor. Symetra appealed, arguing that Plaintiff’s suit is barred by her failure to exhaust internal review procedures and that her husband’s death otherwise falls under an exclusion to coverage.   The Eighth Circuit affirmed. Symetra contends that the exclusion applies to Plaintiff’s husband’s death because he “purposely” used heroin. But just because the act of using an illegal substance is purposeful does not mean that an injury stemming from that act, including a fatal overdose, was too. Symetra also maintains that Plaintiff’s husband, as a “longtime drug user,” was surely aware of the risks of using heroin and that his “generalized knowledge” of such risks is sufficient for his death to fall under the “intentionally self-inflicted injury” exclusion. The court reasoned that even assuming Symetra’s characterization of Plaintiff’s husband’s drug use is accurate, the argument attempts to replace an exclusion that applies only to “intentionally self-inflicted” injuries with one that also includes injuries resulting from reckless, or even negligent, conduct. The court wrote that the plain language of Symetra’s “intentionally self-inflicted injury” exclusion does not apply to unintended injuries like Plaintiff’s husband’s heroin overdose. Thus, Symetra’s denial of Plaintiff’s claim for accidental death benefits based on that exclusion was erroneous. View "Terri Yates v. Symetra Life Insurance Company" on Justia Law

Several homeowners hired contractors to repair damage to their homes. The homeowners assigned to the contractors their rights under their insurance policies with State Farm & Casualty Co. State Farm refused to pay. The contractors sued. State Farm moved for summary judgment, arguing the assignments were invalid under Nebraska law. The district court granted the motion.   The Eighth Circuit affirmed. The court explained that the parties disagree on whether the terms are sufficient to create a valid assignment of rights. The court held that without a description of the services to be provided and a definite price, these terms are left “to be determined in the future,” and thus, there is no mutuality of obligation. Although the written language is insufficient to create an enforceable assignment, this conclusion, by itself, does not resolve this case. The contractors argued that their oral arrangements cure any deficiencies that may exist in the written agreements. The court concluded that it cannot conclude that the assignments here are invalid as a matter of law simply because the written “vital terms” were not as definite as they could have been. View "R.A.D. Services LLC v. State Farm Fire & Casualty Co." on Justia Law

Medical Protective Company (“MedPro”) issued Professional Liability policies to Dr. Bradley DeWall and Wound Management Consultants, P.C. (collectively, “WMC”). Coverage Paragraph A insured WMC against “claim[s] for damages . . . based on professional services rendered or which should have been rendered . . . by the insured . . . in the practice of the insured’s profession.” In this coverage action, the parties dispute whether Paragraph A covers a third party’s claim to recover Medicare reimbursements it had to repay because of deficiencies in WMC’s documentation of the professional services it provided. Applying Iowa law, the district court1 ruled, consistent with other courts that have considered the issue, that the third party’s “Medicare recoupment” claim is not “based upon professional services” and, therefore coverage is limited to the $50,000 of defense costs provided in the policies’ separate Medicare Endorsement. WMC appealed this summary judgment ruling, raising numerous issues.   The Eighth Circuit affirmed. The court concluded that MedPro had no duty to defend WMC from Genesis’s Medicare recoupment claim under the policies’ Paragraph A coverage. The court also agreed with the district court that there is no duty to defend the other claims Genesis asserted in its arbitration complaint because those claims are not “based upon professional services rendered . . . in the practice of [WMC’s] profession.” View "Bradley DeWall v. Medical Protective Company" on Justia Law

ResCap Liquidating Trust (“ResCap”) pursued indemnification claims against originator Primary Residential Mortgage, Inc. (“PRMI”), a Nevada corporation. ResCap asserted breach of contract and indemnification claims, seeking to recover a portion of the allowed bankruptcy claims for those holding units in the liquidating trust. The district court concluded that ResCap had established each element of its contractual indemnification claim. The district court awarded ResCap $10.6 million in attorney’s fees, $3.5 million in costs, $2 million in prejudgment interest, and $520,212 in what it termed “post-award prejudgment interest” for the period between entry of judgment and the order awarding attorney’s fees, costs, and prejudgment interest. Defendant appealed.   The Eighth Circuit remanded for a recalculation of postjudgment interest but otherwise affirmed. The court explained that the district court held that, as a matter of Minnesota law governed by Section 549.09, a final judgment was not “finally entered” until its Judgment in a Civil Case resolving attorney’s fees, costs, and interest was entered on April 28, 2021, and therefore Minnesota’s ten percent prejudgment rate applied in the interim period. But Section 1961(a) does not say “final judgment,” it says “money judgment.” The district court, on August 17, 2020, entered a “money judgment.” Thus, the district court erred in applying Minnesota law to calculate interest after August 17, 2020, rather than 28 U.S.C. Section 1961(a). View "ResCap Liquidating Trust v. Primary Residential Mortgage" on Justia Law

Five months after being sued in Oregon for trademark infringement, Jacob Rieger & Co., LLC provided notice to its liability insurer, Cincinnati Insurance Company. Due to Rieger’s delay, Cincinnati refused to reimburse Rieger’s legal fees for the five months that Cincinnati was unaware of the lawsuit. The Oregon case was ultimately dismissed for lack of jurisdiction. Instead of waiting to be sued in a court that did have jurisdiction, Rieger’s parent company, GSP Licensing LLC, filed a new suit in Missouri as the plaintiff. GSP was not named under Rieger’s insurance policy, so Cincinnati denied coverage for the Missouri case. Cincinnati then filed this lawsuit, seeking a declaration of coverage. The district court granted summary judgment to Cincinnati.   The Eighth Circuit reversed in part the district court’s grant of summary judgment to Cincinnati. The court affirmed the dismissal of Rieger’s tort claims and the imposition of sanctions. The court explained that under Missouri law, a tort claim is independent of a contract claim if the tort claim can succeed without regard to the outcome of the contract claim. In other words, the tort claim could succeed regardless of the outcome of the contract claim. Here, Rieger admits that its tort claims would fail if its contract claim succeeded. By Rieger’s own admission, the court found that the district court properly dismissed Rieger’s tort claims. View "Cincinnati Insurance Company v. Jacob Rieger & Co., LLC" on Justia Law

GWG DLP Funding V, LLC was the policy owner and beneficiary of a life insurance policy issued by PHL Variable Insurance Company. After GWG transferred beneficiary rights and ownership to Wells Fargo, PHL terminated the policy. GWG and Wells Fargo disputed the termination, and the parties attempted to settle the dispute. After some negotiations, the insured died, and PHL refused to honor the alleged agreement the parties had reached. GWG and Wells Fargo sued PHL for breach of contract and breach of the covenant of good faith and fair dealing and sought a declaratory judgment that prevents PHL from terminating the policy. Plaintiffs appealed the district court’s dismissal of their claims.   The Eighth Circuit affirmed. The court concluded that the alleged agreement in early February was incomplete and that Plaintiffs have failed to state a claim for breach of contract. Further, the court wrote that Plaintiffs have failed to state a claim for breach of the covenant of good faith and fair dealing. First, there is no enforceable agreement based on the email exchange. Thus, there was no contract under which PHL could have breached the duty of good faith. Second, even if the parties were bound by the early February communications, Plaintiffs alleged no dishonest motive on PHL’s part. View "GWG DLP Funding V, LLC v. PHL Variable Insurance Co." on Justia Law