Boulevard RE Holdings, LLC v. Mixon Ins. Agency

• Decision Date: 30 March 2022
• Docket Number: 4:20-cv-01288-SEP
• Parties: BOULEVARD RE HOLDINGS, LLC, Plaintiff, v. MIXON INSURANCE AGENCY, INC., Defendant.
• Court: U.S. District Court — Eastern District of Missouri

BOULEVARD RE HOLDINGS, LLC, Plaintiff,
v.
MIXON INSURANCE AGENCY, INC., Defendant.

No. 4:20-cv-01288-SEP

United States District Court, E.D. Missouri, Eastern Division

March 30, 2022

MEMORANDUM AND ORDER

SARAH E. PITLYK, UNITED STATES DISTRICT JUDGE

This matter is before the Court on Defendant Mixon Insurance Agency, Inc.'s (Mixon's) Motion for Summary Judgment as to Plaintiff Boulevard RE Holdings, LLC (Boulevard RE), Doc. [34]. The motion is fully briefed. Docs. [36], [41], [43]. For the reasons set forth below, Mixon's Motion for Summary Judgment is granted.

Factual and Procedural Background

This case arises from the same set of circumstances addressed in Berkley Assurance Co. v. BMG Service Group, LLC., 2020 WL 5632440 (E.D. Mo. Sept. 21, 2020) (Berkley). In the prior litigation, Berkley filed a declaratory judgment action against Boulevard RE, BMG Service Group, LLC (BMG), Jon E. Fuhrer Company, and Lucia Hevierova in order to determine potential liabilities and entitlements with respect to an insurance policy issued by Berkley on property owned by Boulevard RE. Because many of the facts relevant to this case were extensively recited in the Court's prior Memorandum and Order entered in that matter, the Court does not relay the entire history of the case here but adopts the facts as stated in its earlier Memorandum and Order. See Berkley, at *1-3. Additional facts are provided below.

Boulevard RE is the owner of commercial property located at 2543 N. Grand Avenue in St. Louis, Missouri (the Property). Doc. [35] ¶ 1. On June 23, 2017, Boulevard RE entered into a contract for deed with BMG Service Group, LLC (BMG), which operated a bar and grill on the Property, pursuant to which Boulevard RE would sell the Property to BMG. Id. ¶ 2. Boulevard RE retained legal title to the Property after executing the contract for deed, and the title was to remain with Boulevard RE until BMG paid the balance of the purchase price in full. Id. ¶ 1. The contract required that BMG obtain, at its own expense, fire insurance in the amount of the purchase price, with the policy to be issued in Boulevard RE's name. Doc. [40] ¶ 3.

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In June of 2017, pursuant to the terms of BMG's contract with Boulevard RE, BMG sought to insure the Property for $1, 275, 000.00 Doc. [27] ¶¶ 7-9. Boulevard RE alleges that BMG requested that Mixon name Boulevard RE as a “named insured, loss payee, additional insured, and mortgagee” on the insurance policy. Doc. [40] ¶ 4. However, it was later discovered that BMG failed to obtain the policy of fire insurance issued in Boulevard RE's name. Docs. [35] ¶ 6; [40] ¶ 6. Instead, Berkley issued the Policy insuring the Property on behalf of BMG, without listing Boulevard RE as a mortgagee. Doc. [35] ¶ 5. No. one, including Mixon, informed Boulevard RE that it was not included as a mortgagee on the Policy insuring the Property. Doc. [40] ¶¶ 2-3.

On June 30, 2018, a fire destroyed the Property. Docs. [35] ¶ 7; [40] ¶ 7. The Property's automatic sprinkler system, which would have prevented the fire from destroying the Property, was not operative at the time of the fire. See Berkley, 2020 WL 5632440, at *2 (E.D. Mo. Sept. 21, 2020). The Policy contained a Fire Protective Safeguard Endorsement, which required, as a condition of insurance, that an automatic sprinkler system be maintained in complete working order at the Property, and which excluded all coverage for loss or damage by fire if the sprinkler system was inoperative.^[1] Id.

2

On November 1, 2018, Boulevard RE submitted a proof of loss to Berkley, claiming its interest in the Property was as a “lender.” Doc. [35] ¶ 8. Berkley then filed a lawsuit in this Court seeking a declaratory judgment that there was no coverage under the Policy for Boulevard RE, and that Berkley had no obligation under the Policy to pay Boulevard RE. See Berkley, Case No. 4:18-cv-02082, Doc. [1] at 11. Boulevard RE subsequently filed a Third-Party Complaint against Mixon in the prior litigation, alleging breach of contract and negligent procurement of insurance. Id. Doc. [61]. Boulevard RE claimed that BMG had requested that Boulevard RE be named in the Policy as a mortgagee of the Property, and that Mixon had negligently failed to include Boulevard RE in the Policy. Id. ¶ 9; Doc. [93] at 10-11. Berkley, Fuhrer, and Hevierova moved for summary judgment against Boulevard RE, in response to which this Court entered judgment against Boulevard RE, holding that (i) Boulevard RE was not entitled to recover as an additional insured or as a mortgagee under the Policy; (ii) had Boulevard RE been named as a mortgagee, that would have constituted a material misrepresentation, thus violating Missouri law and voiding the Policy; and (iii) even if Boulevard had been listed as an “additional insured” under the Policy, it would not have been entitled to coverage under the Policy due to noncompliance with the policy's Fire Protective Safeguard Endorsement, which would have barred Boulevard RE from any entitlement to the insurance proceeds under the terms of the Policy. Berkley, 2020 WL 5632440, at *8-9.

In the interest of judicial economy, this Court severed Boulevard RE's claims against Mixon and scheduled a new Rule 16 Scheduling Conference to resolve the dispute between Boulevard RE and Mixon. Id. at *9-10. Boulevard RE filed its Complaint on September 21, 2020, which it later amended on June 28, 2021. Docs. [1], [27]. On July 14, 2021, Mixon filed the instant Motion for Summary Judgment, seeking summary judgment on all claims. Doc. [34].

3

Parties' Arguments

Mixon argues that the decision in Berkley collaterally estops Boulevard RE from relitigating three matters of fact and law that were decided by this Court in the prior litigation: (1) Boulevard RE was not a mortgagee of the Property; (2) had Boulevard RE been named a mortgagee on the Property, that would have violated Missouri law and voided the insurance policy; and (3) if Boulevard RE had been named an additional insured in the Policy, the Fire Protective Safeguard Endorsement of the Policy would have precluded Boulevard RE from recovering under the Policy. Docs. [36] at 7; [40] ¶¶ 9-12.

Next, Mixon argues that it is entitled to judgment as a matter of law on both counts of Boulevard RE's First Amended Complaint because, under either a theory of contract liability or negligent procurement, Boulevard RE did not suffer a pecuniary loss that is attributable to any action or inaction by Mixon. That is because (1) Boulevard RE could not have been included as a mortgagee, as that would have voided the insurance policy, and (2) had Boulevard RE been included as an additional insured, the Fire Protective Safeguard Endorsement would nonetheless have barred Boulevard RE's recovery. Doc. [36] at 12-13.

Boulevard RE opposes Mixon's Motion for Summary Judgment, arguing that this Court's decision in Berkley does not give rise to collateral estoppel because Boulevard RE's claims involve matters of fact and law that are not identical to those decided in Berkley. Doc. [41] at 1-2. To wit, Berkley did not reach whether Mixon was negligent when it (1) failed to discover and inform BMG or Boulevard RE that Boulevard was not actually a mortgagee and the policy was not obtained in the manner requested; and (2) failed to notify Boulevard RE and/or BMG of the Fire Protective Safeguard Endorsement.

Mixon replies that it does not seek to use collateral estoppel to address the new issues raised by Boulevard RE in its First Amended Complaint. Doc. [43] at 2. Rather, Boulevard RE should be estopped only from relitigating those matters of fact and law that were previously decided in Berkley. Id. at 2-3. Still, Mixon argues, no new issue raised by Boulevard RE negates its right to judgment as a matter of law on all claims. Id. at 3.

Motion for Summary Judgment

I. Legal Standard

Summary judgment is proper where the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a).

4

The movant bears the initial burden of demonstrating the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). An issue is genuine only if it “is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). “[T]he burden on the moving party may be discharged by ‘showing'-that is, pointing out to the district court-that there is an absence of evidence to support the nonmoving party's case.” Celotex, 477 U.S. at 325. Once the moving party discharges that burden, the burden shifts to the nonmoving party to set forth specific facts showing a genuine triable issue. Fed.R.Civ.P. 56(e). “If the [nonmovant's] evidence is merely colorable, or is not significantly probative, summary judgment may be granted.” Celotex, 477 U.S. at 322-23. See also Henthorn v. Capitol Communications, Inc., 359 F.3d 1021, 1026 (8th Cir.2004) (“Mere allegations not supported with specific facts are insufficient to establish a material issue of fact and will not withstand a summary judgment motion.”). As the United States Supreme Court stated in Anderson v. Liberty Lobby, Inc., 477 U.S. at 249, “there is no issue for trial unless there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party. “If the [nonmovant's] evidence is merely colorable, or is not significantly probative, summary judgment may be granted.” Id. at 249-50 (citations omitted).

The test for materiality is whether the disputed fact would affect the outcome of the suit. Id. “An issue of material fact is genuine if it has a real basis in the record” and “a genuine issue of fact is material if it “might affect the outcome of the suit under the governing law.” Hartnagel v. Norman, 953 F.2d 394, 395 (8th Cir.1992) (citations omitted). When a judge...