Summary
The Eighth Circuit affirmed summary judgment for Auto-Owners Insurance Company in a dispute over coverage for losses arising from a broken YouTube livestream link during HALO’s virtual art auction. Applying Missouri law, the court held that the policy’s electronic-data exclusion unambiguously barred damages arising from the loss of, loss of use of, inability to access, or inability to manipulate electronic data. The court therefore did not address HALO’s arguments concerning the policy’s property-damage provision.
Topics
Practice areas
Questions Presented
- Whether the insurance policy's electronic-data exclusion unambiguously barred coverage for HALO's lost auction revenue arising from the broken YouTube link or internet outage.
- Whether the district court properly granted summary judgment to Auto-Owners in the declaratory-judgment action.
Holdings
- The policy's electronic-data exclusion clearly and unambiguously barred coverage because HALO's damages arose out of the broken YouTube link or internet outage, which constituted the loss of, loss of use of, inability to access, or inability to manipulate electronic data.
- The district court properly granted summary judgment to Auto-Owners.
Key quotations
“The policy’s electronic-data exclusion bars recovery.” (4)
“The exclusion’s plain language clearly and unambiguously bars HALO from coverage.” (4)
“Insurance contracts are read as a whole to determine the intent of the parties, giving effect to that intent by enforcing the contract as written.” (3)
Factual background
HALO conducted a virtual art auction using a livestream created by Paradise Productions and bidding software operated by Qtego. Shortly before the auction, an internet outage at Paradise's studio permanently broke the YouTube link connecting the livestream to the bidding software, preventing attendees from viewing the auction and placing bids. HALO diverted the stream to Facebook Live, but the resulting asynchronous presentation generated substantially less revenue than projected; Paradise later assigned HALO its claim against Auto-Owners.
Procedural history
Auto-Owners sued in the United States District Court for the Western District of Missouri seeking a declaration that its policy provided no coverage for losses arising from a broken YouTube link and related internet outage during HALO's virtual auction. The district court granted summary judgment to Auto-Owners, concluding that the policy's electronic-data exclusion barred recovery. HALO appealed, and the Eighth Circuit affirmed.