Hudson Enters., Inc. v. Certain Underwriters at Lloyd's London Ins. Cos., 16-2846

• Citation: 855 F.3d 874
• Decision Date: 28 April 2017
• Docket Number: No. 16-2846,16-2846
• Parties: HUDSON ENTERPRISES, INC., doing business as River Valley Marina, Plaintiff–Appellant v. CERTAIN UNDERWRITERS AT LLOYD'S LONDON INSURANCE COMPANIES, Subscribing to Policy #10NCG01559 and Agreement Numbers NPPI1011456 and NPPI09112456, Defendant–Appellee
• Court: United States Courts of Appeals. United States Court of Appeals (8th Circuit)

855 F.3d 874

HUDSON ENTERPRISES, INC., doing business as River Valley Marina, Plaintiff–Appellant

v.CERTAIN UNDERWRITERS AT LLOYD'S LONDON INSURANCE COMPANIES, Subscribing to Policy #10NCG01559 and Agreement Numbers NPPI1011456 and NPPI09112456, Defendant–Appellee

No. 16-2846

United States Court of Appeals, Eighth Circuit.

Submitted: April 5, 2017

Filed: April 28, 2017

Counsel who presented argument on behalf of the appellant was John Ogles, of Jacksonville, AR. Gregory D. Taylor, of Benton, AR. The following attorney(s) appeared on the appellant brief: Gregory D. Taylor, of Benton, AR.

Counsel who presented argument on behalf of the appellee was Gregory L Mast, of Atlanta, GA. The following attorney(s) appeared on the appellee brief; David D. Wilson, of Little Rock, AR., Paul Lindsey Fields, Jr., of Atlanta, GA.

Before GRUENDER, MURPHY, and KELLY, Circuit Judges.

MURPHY, Circuit Judge.

On the night of April 30, 2011 a storm generated strong winds and left seven inches of rain in the Little Maumelle River basin. The River Valley Marina lost five of its docks to the storm. The docks were covered by an insurance policy issued by Certain Underwriters at Lloyd's London Insurance Companies (Underwriters) which excluded losses "caused directly or indirectly" by flood. Underwriters denied coverage based on the flood exclusion. The marina then filed this action against Underwriters, alleging that they breached the policy. The district court¹ granted Underwriters summary judgment after concluding that the docks were lost to flood. Hudson appeals, and we affirm.

I.

Ray and Debra Hudson own Hudson Enterprises, which operates the River Valley Marina. The marina owns eight docks on the north bank of the Little Maumelle River in Little Rock, Arkansas. The Little Maumelle River runs west to east until it converges with the Arkansas River. The marina is located approximately two miles above the Little Maumelle's confluence with the Arkansas River.

On the night of April 30, 2011 approximately seven inches of rain fell in the Little Maumelle watershed. Several area residents testified that the river rose at least three feet above its normal levels and exceeded its banks in some places. Photos indicate that there was standing water in the parking lot near one of the marina's docks the next day. The rain also greatly increased the speed of the river's current. In addition to rain, the storm brought with it high winds that tore down tree branches near the marina.

The marina lost five of its eight docks to the storm. The three docks that survived the storm were located upstream from the docks that were swept away. The marina was covered by an insurance policy issued by Underwriters. After the storm, the marina contacted Underwriters to obtain compensation for the loss. Its policy insured the marina against "direct physical loss of or damage to" its eight docks. The policy contained an exclusion, however, which stated:

We will not pay for loss or damage caused directly or indirectly by any of the following. Such loss or damage is excluded regardless of any other cause or event that contributes concurrently or in any sequence to the loss. These exclusions apply whether or not the loss event results in widespread damage affecting a substantial area, or remains localized—even when restricted to the insured premises.

....

4. Water—(a) Flood, surface water, waves, tides, tidal waves, overflow of any body of water, or their spray, all whether driven by wind or not; ....

A few days after the storm, Underwriters sent an adjuster to take photographs of the marina and talk to the Hudsons. Mr. Hudson told the adjuster that the "[t]he velocity of that water" caused the damage to the docks. Underwriters denied coverage after finding that the loss was caused by "a flash flood that occurred on the Little Maumelle River following heavy rains." The Hudsons later came to believe, however, that a utility pole caused their loss when it fell onto the docks as a result of the storm's high winds.

Hudson Enterprises (Hudson) filed this action against Underwriters in state court. Underwriters removed the case to federal court. During discovery, Hudson served an interrogatory on Underwriters that stated, "In the course of your investigation of the facts and circumstances forming the basis for the claim for benefits tendered by Plaintiff ... did you obtain any expert opinion relating to your determination to deny payment of such claim?" Underwriters answered on November 16, 2015 by stating "discovery is ongoing and [Underwriters] have not yet made a determination as to whether an expert witness may testify at trial." The answer then indicated "[i]f Underwriters decide to have a testifying expert, Underwriters will identify said expert(s) in accordance with the Federal Rules of Civil Procedure."

The district court entered a case scheduling order which required Underwriters to "identify all expert witnesses and produce their opinions by 27 January 2016." Underwriters disclosed their civil engineering expert to Hudson on January 27, 2016. The expert concluded that the flash flood was the sole cause of Hudson's loss and rejected Hudson's utility pole hypothesis. Hudson objected to Underwriters' expert and asked that his opinions be stricken because the expert had been disclosed too late and because Underwriters had not supplemented their interrogatory answer after retaining him. At the hearing on Hudson's motion to strike, counsel for Underwriters stated that he had first contacted the expert on December 18 and had not received a draft expert report until the last week of January. The district court denied the motion to strike.

The parties later filed cross motions for summary judgment. The district court denied Hudson's motion and granted that of Underwriters. The court concluded that there was no genuine issue of material fact regarding whether or not a flood had caused the damage to Hudson's docks and that the policy exclusion therefore applied. Hudson appeals, arguing that the district court abused its discretion by refusing to strike the report and opinions of the Underwriters expert and erred by granting their motion for summary judgment.

II.

Hudson argues that the district court abused its discretion when it refused to strike Underwriters' expert report and opinions. We review a district court's "discovery rulings in a manner both narrow and deferential, and reversal is only warranted if an erroneous ruling amounted to a gross abuse of discretion." Robinson v. Potter , 453 F.3d 990, 994–95 (8th Cir. 2006) (internal quotation marks omitted). Hudson appears to argue that Underwriters disclosed their expert in an untimely fashion. A party must disclose expert testimony "at the times and in the sequence that the court orders." Fed. R. Civ. P. 26(a)(2)(D). Underwriters thus complied with the Federal Rules of Civil Procedure by disclosing their expert on the last day allowed by the scheduling order.

Hudson also argues that the district court should have stricken the expert report for Underwriters because they did not supplement their interrogatory answers in a timely fashion after they had secured their expert. A party that has responded to an interrogatory "must supplement or correct its disclosure or response: (A) in a timely manner if the party learns that in some material respect the disclosure or response is incomplete or incorrect." Fed. R. Civ. P. 26(e)(1). Hudson's interrogatory asked Underwriters if they had obtained "any expert opinion relating to your determination to deny payment of such claim." In November 2015 Underwriters responded that "they have not yet made a determination as to whether an expert witness may testify at trial." Underwriters counsel did not receive draft expert reports until the last week of January. On January 27, Underwriters disclosed to Hudson the reports and opinions of their two expert witnesses. Because only a few days had passed at most between when Underwriters obtained their expert's opinion and disclosed it to Hudson, we cannot conclude that the district court grossly abused its discretion by denying Hudson's motion to strike.

III.

Hudson argues that the district court erred by granting Underwriters summary judgment. We review a district court's "grant of summary judgment de novo and consider the facts in the light most favorable to the nonmoving party." Nichols v. Tri-Nat'l Logistics, Inc. , 809 F.3d 981, 985 (8th Cir. 2016). A district court...