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

MNDKK, LLC’s insurer, Great Lakes Insurance, sent subrogation demands through an assignee to Dingmann Brothers Construction (“Dingmann”) due to alleged dust-related property damage. Grinnell Mutual Reinsurance Company (“Grinnell”), Dingmann’s insurer, commenced a declaratory-judgment action to determine coverage under the insurance policy issued to Dingmann. The district court granted Grinnell’s motion for summary judgment, holding that two policy exclusions unambiguously apply due to the presence of silica in the dust and that coverage is foreclosed. Defendants argued that the two exclusions do not apply, meaning Grinnell is responsible for covering the cost of the property damage caused by the dust.   The Eighth Circuit affirmed the district court’s ruling and held that there is no genuine dispute of material fact about whether the dust contained silica. Further, Defendants argued that the cleanup provision does not apply because the damage was due to silica or silica-related dust itself, not its effects. Defendants claimed that there is a misplaced comma between “effects of” and “silica.” The court held that the comma before “silica” indicates that the phrase “the effects of” belongs with the phrase immediately preceding it, rather than with “‘silica’ or ‘silica-related dust.’” So, the last verb phrase in the series is “or in any way responding to or assessing the effects of,” and the comma separates the series from the noun phrase that is its direct object. Finally, the court held overlapping provisions can exist in an insurance policy and that both the cleanup and property-damage provisions apply. View "Grinnell Mutual Reinsurance Co v. Great Lakes Insurance SE" on Justia Law

Plaintiff, a locomotive engineer, sued Kansas City Southern Railway Company (“KCSR”) for negligence after he sustained injuries in a railcar collision. The district court granted summary judgment to KCSR. Plaintiff argued that section 287.280.1, the civil-action provision, authorizes his civil action because KCSR failed to carry workers’ compensation insurance. KCSR responded that it is not liable because Plaintiff “was insured by his immediate . . . employer,” triggering the exemption from liability for statutory employers in section 287.040.3. According to Plaintiff, however, section 287.040.3 exempts KCSR from workers’ compensation liability only, not liability from civil actions.   The Eighth Circuit affirmed the district court’s grant of summary judgment in favor of KCSR. The court held that because Plaintiff was insured by his immediate employer, KCSR is not liable and is entitled to judgment as a matter of law. The court reasoned that Missouri’s workers’ compensation statute, Mo. Rev. Stat. Section 287.120.1, imposes liability on employers for workplace injuries. However, nowhere in section 287.040 does the text differentiate between workers’ compensation liability and civil liability. Accordingly, the court interpreted “liable as in this section provided” to mean “liable as an employer”; that is, liable as a statutory employer. Thus, KCSR’s potential liability, therefore, is liability “as in [section 287.040] provided,” so it enjoys the immunity from suit. View "Nathan Blanton v. KC Southern Railway Co." on Justia Law

A patron of RAJJ Entertainment successfully sued RAJJ and its owner, for negligence after being injured in the bar’s parking lot. Defendants’ insurance company, Great Lakes Insurance, sued for a declaration stating that it was not required to indemnify RAJJ and the owner for the damages award because the insurance policy excluded from coverage injuries that arose from physical altercations. The district court granted summary judgment to Great Lakes.The Eighth Circuit affirmed the district court’s summary judgment ruling in favor of Plaintiff. The court held that the clear language of the policy controls. The court reasoned that insurance companies are not required to indemnify the insured for injuries that are excluded by a policy. Generally, where a plaintiff’s negligence claim arises out of an assault or battery, the assault or battery exclusion bars coverage of the insured’s negligence claim.   Defendants claim that the exclusion does not apply because the underlying lawsuit “arose out of” their negligence—not any assault, battery, or physical altercation. The court reasoned that the policy language concerns how the bodily injury arose, not how the lawsuit arose. The concurrent-proximate-cause rule does not apply because RAJJ and the owner’s negligence is not a “covered cause.” Furthermore, even if RAJJ and the owner’s negligence were covered, that would not require Great Lakes to indemnify them because their negligence was not “truly independent and distinct” from the assault, battery, or physical altercation. View "Great Lakes Insurance SE v. Ray A. Perrin" on Justia Law

Plaintiff sued Defendant insurance company for mishandling his wife’s enrollment for supplemental life insurance and then declaring her ineligible for coverage after she died. The district court determined Defendant violated ERISA, finding Defendant breached its fiduciary duty to ensure its system of administration did not allow it to collect premiums until coverage was actually effective. Defendant appealed.The Eighth Circuit affirmed. Defendant maintained its fiduciary duty despite the fact that the deceased's employer collected premium payments before forwarding them to Defendant. The plan in question gave Defendant discretion to approve benefits, which under ERISA is sufficient to create a fiduciary duty. Defendant violated its fiduciary duty by failing to maintain an effective enrollment system. Under ERISA, a fiduciary must discharge its duties with reasonable care, skill, prudence and diligence. The court held that a reasonably prudent insurer would use a system that avoids the employer and insurer having different lists of eligible, enrolled participants. Defendant's billing system breached the fiduciary duty it owed to the deceased. Thus, the court affirmed the district court's granting of summary judgment to Plaintiff. View "Corey Skelton v. Reliance Standard Life Ins Co" on Justia Law

Plaintiffs’ sought coverage for losses and expenses during the COVID-19 pandemic. The district court granted the insurers’ motion to dismiss.   The Eighth Circuit affirmed the district court’s ruling granting Defendant summary judgment. The court held that the primary rule for contract interpretation is to ascertain and effectuate the parties' intent. In cases where the insurance policy language is unambiguous, the court will enforce the contract as written and will give each term its ordinary meaning. Here, the contract at issue provides coverage for “direct physical loss of or damage to property.” Neither business alleges COVID-19 was physically present on its premises or that anything physical happened to its properties. The parties’ dispute regarding whether the policies’ Virus Exclusion applies is irrelevant because the Plaintiffs’ failed to show any direct physical loss of or damage to their property. View "Monday Restaurants v. Intrepid Insurance Company" on Justia Law

After a fire destroyed Merechka's home, Vigilant denied his insurance claim, which sought $634,000 for the dwelling and $475,500 for its contents. During its investigation, Vigilant discovered that Merechka had filed for bankruptcy about four years earlier. According to his bankruptcy petition, he had around $9,000 in personal property, well short of the more than $600,000 (or $325,825, according to a third-party appraiser) that he reported to Vigilant. Without an explanation for the discrepancy, Vigilant suspected insurance fraud. Merechka assured Vigilant that he had acquired nearly all of his personal property after the bankruptcy using several sources of income: $700 per week he received for working for his brother, a $1,300 monthly social-security payment, and periodic payments from an investment account. The numbers did not add up, so Vigilant denied coverage under the policy’s concealment-or-fraud provision.Merechka sued. Vigilant filed a counterclaim, seeking reimbursement for the nearly $400,000 it had paid to Merechka’s mortgage lender. Applying Arkansas law, the district court determined that neither side owed anything. The Eighth Circuit reversed in part and remanded Vigilant’s claim. No reasonable juror could believe that Merechka acquired so much property in such a short time on his modest income; the circumstances indicate that the falsehood was intentional. View "Merechka v. Vigilant Insurance Co." on Justia Law

In 2013, Vercellino was injured in an accident while riding on an ATV operated by his friend, Kenney. Both were minors. Vercellino was a covered dependent on his mother’s insurance plan. The plan is self-funded, so ERISA, 29 U.S.C. 1001, preempted state law. The Insurer paid nearly $600,000 in medical expenses and did not exercise its right to seek recovery in subrogation from Kenney or Kenney’s parents during the applicable statutory period, nor did Vercellino’s mother ever file suit to recover medical expenses from the Kenneys. In 2019, Vercellino, then an adult, filed suit against the Kenneys seeking general damages and sought declaratory judgment that the Insurer would have no right of reimbursement from any proceeds recovered in that litigation. The Insurer counterclaimed, seeking declaratory judgment that it would be entitled to recover up to the full amount it paid for Vercellino’s medical expenses from any judgment or settlement Vercellino obtained.The Eighth Circuit affirmed summary judgment for the Insurer. The plain language of the plan at issue here is unambiguous: the Insurer is entitled to seek reimbursement for medical expenses arising out of the ATV accident paid on Vercellino’s behalf from any judgment or settlement he receives in his litigation with Kenney. View "Vercellino v. Optum Insight, Inc." on Justia Law

Plaintiff filed suit against the insurers, seeking to represent a nationwide class of people whose trips were cancelled because of COVID-19 stay-at-home orders and who were not paid by these insurers. The Eighth Circuit affirmed the district court's dismissal of plaintiff's claims under Federal Rule of Civil Procedure 12(b)(6). The court concluded that plaintiff's flight cancellation caused by the government's stay-at-home orders fell under his travel insurance policies' epidemic exclusion. In this case, an ordinary person of average understanding reading the policy terms here would deduce that WHO "recognized" COVID-19 as either a pandemic or an epidemic by including COVID-19 on its list of pandemic or epidemic diseases. Furthermore, plaintiff's flight cancellation resulted from the COVID-19 epidemic and the epidemic affected plaintiff. View "Bauer v. AGA Service Co." on Justia Law

Alissa's Flowers filed suit against State Farm, alleging that it had overpaid its premiums to State Farm in light of its significantly lower exposure rate due to COVID-19. State Farm moved to dismiss the amended complaint, arguing that Missouri law required that Alissa's Flowers bring its claims before the director of the Missouri Department of Insurance.The Eighth Circuit affirmed the district court's dismissal of the complaint, concluding that the administrative review process set forth in Mo. Rev. Stat. 379.348 applies in the commercial insurance context and to plaintiff's claims in this case. The court explained that the district court properly determined that Alissa's Flowers was required to exhaust administrative remedies because the claims, in essence, constitute a challenge to State Farm's rates, rating plan, rating system and underwriting rules. Finally, the complaint should not have been dismissed for lack of subject matter jurisdiction, but rather for lack of authority to grant relief. View "Alissa's Flowers, Inc. v. State Farm Fire & Casualty Co." on Justia Law

In 2015, Elite sued Legacy for breach of contract. Attorney Bredahl received a $5,000 check from Legacy. On December 30, 2015, and February 26, 2016, he appeared on behalf of Legacy in the Elite suit. Bredahl did not respond to discovery, resulting in an order banning Legacy from putting on evidence at trial. Legacy later retained Hankey Law but neither Legacy nor any defense counsel attended the March 2017 trial. Elite won a $1 million judgment. Elite and Legacy settled the suit for $575,000 in 2018.In October 2017, ALPS issued an insurance policy to Bredahl with loss inclusion starting October 1, 2016. In January 2018, Legacy notified ALPS of a potential claim. Legacy sued Bredahl in April 2019. Bredahl notified ALPS, which indicated that it would defend that suit subject to a complete reservation of rights, then sought a declaratory judgment that the Policy did not apply to the Legacy suit.The district court held that ALPS had no duty to indemnify or defend Bredahl. The Eighth Circuit affirmed. The Policy does not apply to the Legacy suit if the “Insured” knew or reasonably should have known, as of the October 1, 2017 effective date, that his conduct during the Elite suit might be the basis for a “demand for money” against him. Before that date, Bredahl knew of acts or omissions in the Elite suit and reasonably should have known Legacy might bring a claim against him, View "ALPS Property & Casualty Insurance Co. v. Legacy Steel Building, Inc." on Justia Law