Summary
The Eighth Circuit affirmed summary judgment for Liberty Mutual Insurance Company and Ohio Security Insurance Company in the Acheys’ action concerning storm damage to a farm barn. Applying Missouri law, the court held that the policy covered only the identified 44' x 160' hay/machinery barn, not the 44' x 208' barn, and therefore the breach-of-contract and vexatious-refusal claims failed.
Topics
Practice areas
Questions Presented
- Whether the insurance policy was ambiguous as to the number and identity of barns covered.
- Whether extrinsic evidence could resolve any latent ambiguity in the policy.
- Whether the insurers were liable for breach of contract or vexatious refusal to pay for denying coverage for damage to the 44' x 208' barn.
Holdings
- The policy did not create an ambiguity as to the number of insured barns because each declaration page consistently identified one barn by the same building number, location, and description.
- Although the policy contained a latent ambiguity because the generic description of a hay/machinery barn could apply to more than one barn, the ambiguity could be resolved by extrinsic evidence, and the broker's email established that the insured barn was the 44' x 160' barn.
- The insurers had no obligation to cover damage to the 44' x 208' barn because the policy insured only the 44' x 160' barn; therefore, the Acheys' breach-of-contract claim failed as a matter of law.
- The Acheys' derivative vexatious-refusal-to-pay claim also failed because there was no judgment for the Acheys on the insurance policy.
Key quotations
“The number of barns insured is not ambiguous.” (at 3)
“Specialty Risk’s email leaves no genuine dispute that the policy insured the 44’ x 160’ barn.” (at 4)
“Because the insurers had no obligation under the policy to cover damage to the 44’ x 208’ barn, the Acheys’ breach of contract claim fails as a matter of law.” (at 4)
Factual background
A December 2021 storm damaged two of the Acheys' three hoop barns. Their insurance broker requested coverage for three barns, but the insurers later issued an endorsement adding one $150,000 hay/machinery barn at location 2, corresponding to the 44' x 160' barn. Subsequent declaration pages continued to identify only one hay/machinery barn, building ST0001, although the coverage amount was later increased. The insurers paid for damage to the 44' x 160' barn and denied coverage for the 44' x 208' barn.
Procedural history
After a December 2021 storm damaged two barns, the insurers paid for damage to the 44' x 160' barn but denied coverage for the 44' x 208' barn. The Acheys sued in the United States District Court for the Western District of Missouri, which granted the insurers' motion for summary judgment after determining that the policy was unambiguous and covered only the 44' x 160' barn. The Eighth Circuit affirmed.