355 F.3d 1125 (8th Cir. 2004), 02-2119, Modern Equipment Co. v. Continental Western Ins. Co., Inc.
|Citation:||355 F.3d 1125|
|Party Name:||MODERN EQUIPMENT COMPANY, a Nebraska Corporation, Appellant, v. CONTINENTAL WESTERN INSURANCE COMPANY, INC., an Iowa Corporation, Appellee.|
|Case Date:||January 28, 2004|
|Court:||United States Courts of Appeals, Court of Appeals for the Eighth Circuit|
Submitted: Jan. 16, 2003.
Rehearing Denied March 10, 2004.
Thomas E. Johnson, argued, Omaha, NE (Kirk S. Blecha, Omaha, NE, on the brief), for appellant.
James J. Frost, argued, Omaha, NE, for appellee.
Before HANSEN,1 Chief Judge, BRIGHT and SMITH, Circuit Judges.
SMITH, Circuit Judge.
Modern Equipment Company ("Modern Equipment") appeals from the district court's2 grant of summary judgment to Continental Western Insurance Company ("Continental Western") on cross-motions for summary judgment. Modern Equipment sued Continental Western seeking a declaratory judgment establishing Continental Western's duty to defend Modern Equipment in an underlying suit brought by Nebraska Beef Ltd. ("Nebraska Beef") in Nebraska state court. We affirm.
Modern Equipment3 designed a meat storage-rack system that Nebraska Beef purchased for use in its refrigerated warehouse. Three months after installation, two rack sections collapsed. Nebraska Beef was forced to dismantle, remove, and replace the collapsed rack sections. Within months, two more sections of the Modern Equipment storage-rack system collapsed. These sections were also dismantled and removed by Nebraska Beef. Neither collapse caused physical damage to Nebraska Beef's refrigerated warehouse. However, Nebraska Beef replaced the collapsed rack sections with smaller racks, which ultimately diminished the amount of beef product which could be stored in the warehouse. Six sections of the original rack system remained in place for approximately two years, at which time Nebraska Beef completely replaced Modern Equipment's rack system with a new storage system. The new system had a lower total-storage capacity than the Modern Equipment system.
Nebraska Beef sued Modern Equipment in Nebraska state court. In its suit, Nebraska Beef claimed damages for production and shipping costs, spoilage of product, decreased cooler capacity, and loss of sales due to the collapsed racks.4 At all relevant times, Continental Western insured Modern Equipment under a commercial general liability policy and a commercial excess policy.5 After learning that it had been sued, Modern Equipment tendered its defense to Continental Western and requested an affirmation of coverage.
Continental Western agreed to defend Modern Equipment, but did so under a reservation of rights. Continental Western did not dispute its potential exposure for damage to Nebraska Beef's product-and the resulting spoilation-due to the collapsed rack system, but expressed its intent to deny coverage for the remaining disputed damages.6 Modern Equipment then brought the instant action-a declaratory-judgment action seeking a declaration that the Continental Western insurance policies provided coverage for the disputed damages. Following cross-motions for summary judgment, the district court concluded that Continental Western properly excluded coverage for all of the disputed damages and granted summary judgment in its favor.
II. Standard of Review and Legal Standards7
A summary judgment is reviewed de novo. Darby v. Bratch, 287 F.3d 673, 678 (8th Cir. 2002). Summary judgment is inappropriate if there is a genuine dispute about a material fact. Fed.R.Civ.P. 56(a); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Insurance disputes are particularly well suited for summary judgment because the proper construction of an insurance contract is always an issue of law for the court. Iowa Comprehensive Petroleum Underground Storage Tank Fund Bd. v. Federated Mut. Ins. Co., 596 N.W.2d 546, 550 (Iowa 1999). We do not apply the rules of construction if an insurance contract is unambiguous. Kirwan v. Chicago Title Ins. Co., 9 Neb.App. 372, 612 N.W.2d 515, 523 (2000). When the words of an insurance contract are unambiguous, the intent of the parties is determined by the language of the policy itself. A.Y. McDonald Indus., Inc. v. Ins. Co. North America, 842 F.Supp. 1166, 1170 (N.D.Iowa 1993), aff'd 48 F.3d 1223 (8th Cir. 1995). If the terms of an insurance contract are clear, they are to be accorded their plain and ordinary meaning. Farm Bureau Ins. Co. of Nebraska v. Bierschenk, 250 Neb. 146, 548 N.W.2d 322, 324 (1996). These standards apply equally to exclusions. Farm and City Ins. Co. v. Gilmore, 539 N.W.2d 154, 157 (Iowa 1995).
Modern Equipment does not claim, and we do not find, that either the policy's definitions or its exclusions are ambiguous. Hence, we will not resort to rules of construction. Farm & City Ins. Co. v. Anderson, 509 N.W.2d 487, 490-91 (Iowa 1993). Accordingly, Modern Equipment is not entitled to have the policy construed in its favor. Rather, we will attempt to ascertain the intention of the parties from the plain meaning of the policy. Ploen v. Union Ins. Co., 253 Neb. 867, 573 N.W.2d 436, 442 (1998).
III. Policy Language
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