Brown v. CRST Malone, Inc.

• Decision Date: 03 January 2014
• Docket Number: No. 12–3669.,12–3669.
• Citation: 739 F.3d 384
• Parties: Larry BROWN, Plaintiff–Appellant v. CRST MALONE, INC., Defendant–Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

739 F.3d 384

Larry BROWN, Plaintiff–Appellant

v.CRST MALONE, INC., Defendant–Appellee.

No. 12–3669.

United States Court of Appeals, Eighth Circuit.

Submitted: Sept. 26, 2013.

Filed: Jan. 3, 2014.

Thomas Michael Ward, argued, Saint Louis, MO, (Samuel J. Vincent, III, and Richard L. Hughes, I, on the brief), for Appellant.

Mark G. Arnold, argued, Saint Louis, MO, for Appellee.

Before MURPHY, MELLOY, and SHEPHERD, Circuit Judges.

MELLOY, Circuit Judge.

Larry Brown brought suit against CRST Malone (“CRST”) in Missouri state court, alleging that CRST negligently failed to maintain his workers' compensation insurance coverage. After CRST removed the case to federal district court,¹ the court granted summary judgment to CRST, holding that Brown's action was barred by the applicable Missouri statute of limitations. Brown appeals, arguing that the statute of limitations began to run much later than the district court determined. For the following reasons, we affirm.

I.

Larry Brown contracted with CRST to drive a truck as an independent owner-operator. In 2001, CRST entered into an agreement with Associated Contract Truckmen, Inc. (“ACT”) to provide group workers' compensation insurance for the company's contractors, which included Brown. Brown elected to participate in the program and signed the necessary forms. CRST then withheld insurance premiums from Brown's paychecks.

ACT contracted with AMS Staff Leasing (“AMS”) to procure insurance for CRST's independent contractors. AMS subsequently contracted with CNA to provide the workers' compensation insurance. Disputes later arose between AMS and CNA, causing CNA to cancel the CRST contractor insurance policy in June 2002. Brown was unaware of the cancellation, and AMS did not notify ACT that the insurance policies were cancelled. Despite the cancellation, CRST continued to take deductions from Brown's paycheck, even though the money never reached an insurance provider.

On July 21, 2002, Brown was injured while making a delivery for CRST, allegedly rendering him permanently disabled. On July 21, 2003, Brown filed for workers' compensation with the Missouri Division of Workers' Compensation, naming ACT, AMS, and CRST as his policy providers. He began to receive biweekly workers' compensation payments of $750. On March 8, 2004, a representative for ACT informed Brown's attorney that Brown would no longer receive benefits and that payments would cease immediately because Brown's “restrictions [were] not related to his work injury.” Brown's attorney then contacted CRST, ACT, AMS, CNA, and the Missouri Department of Insurance in an attempt to establish which company was responsible for payments and to prove that Brown was entitled to coverage for his disability from whichever company was responsible for that coverage.

On February 24, 2005, Brown learned there was an additional problem in his attempt to reinstate his workers' compensation payments—he may not have had a valid policy at the time of his injury, much less a policy that provided coverage for his injury. On that date, a Consumer Service Specialist at the Missouri Department of Insurance wrote a response to Brown's attorney's inquiry regarding Brown's denial of coverage. The letter informed Brown that CNA had terminated CRST's insurance policy on June 20, 2002,² one month prior to Brown's injury. The letter stated that “[b]ased on the evidence presented,” the Department of Insurance did not have a “clear basis to continue its investigation of [the] matter.” Following receipt of this information, on March 8, 2005, Brown's attorney wrote to Kevin Dinwiddie, an Administrative Law Judge with the Missouri Division of Workers' Compensation. The letter stated that Brown acknowledged that CNA and the Missouri Department of Insurance had taken the position that Brown was not insured at the time of his injury. The letter requested a hearing on the matter because CNA had not provided evidence to support its position.

On July 31, 2008, over three years later, an Administrative Law Judge with the Missouri Division of Workers' Compensation ruled that Brown was not insured at the time of his injury. The opinion stated, in part:

[T]here is competent and corroborating evidence establishing that at the time of Brown's July 21, 2002 injury there was no valid workers' compensation insurance in place for him; the evidence establishes ... that Brown's workers' compensation insurance (obtained through the most convoluted of ways) was no longer in effect after May 30, 2002.... [A]t the time of the claimant Brown's July 21, 2002 injury he was not covered by a valid workers' compensation insurance policy.

On March 17, 2011, Brown filed suit against CRST in Missouri state court, alleging that CRST acted negligently in failing to maintain Brown's workers' compensation insurance. On September 1, 2011, CRST removed the suit to federal court on the basis of diversity jurisdiction. 28 U.S.C. § 1441(a); 28 U.S.C. § 1332(a)(1). On October 3, 2012, the district court granted summary judgment to CRST, ruling that Brown's action accrued prior to March 2006 and therefore was barred by the Missouri five-year statute of limitations for such claims. Mo. Ann. Stat. §§ 516.100, 516.120. Brown appeals.

II.

We review a district court's grant of summary judgment de novo. Lexington Ins. Co. v. Integrity Land Title Co., 721 F.3d 958, 974 (8th Cir.2013). For a statute of limitations defense, “[i]t has long been the rule that the burden of establishing the statute of limitations defense lies with the party who asserts it.” Nuspl v. Mo. Med. Ins. Co., 842 S.W.2d 920, 923 (Mo.Ct.App.1992). In this case, CRST bears the burden of establishing that Brown's claim was not filed within the five-year statute of limitations provided in Mo. Ann. Stat. §§ 516.100 and 516.120.

Both parties agree that Sections 516.100 and 516.120 impose a five-year statute of limitations on Brown's claim. The parties disagree when the statute of limitations began to run in this case. In its summary judgment order, the district court determined that the statute of limitations started running on March 8, 2005, when Brown's attorney acknowledged that CNA and the Missouri Department of Insurance believed that Brown did not have insurance coverage at the time of his injury.

In this appeal, Brown asserts two theories for why he believes the five-year statute of limitations had not run when he filed his lawsuit against CRST on March 17, 2011. We address each theory in turn.

A. Last Item of Damage Theory

Brown's first theory is that the statute of limitations will not begin to run until his death. Brown argues that Mo. Ann. Stat. § 516.100 supports his position that the statute of limitations on his claim would not begin to run until his last payment would be due, which he alleges would be upon his death. Section 516.100 reads, in part:

[T]he cause of action shall not be deemed to accrue when the wrong is done or the technical breach of contract or duty occurs, but when the damage resulting therefrom is sustained and is capable of ascertainment, and, if more than one item of damage, then the last item, so that all resulting damage may be recovered, and full and complete relief obtained.

Specifically, Brown believes that the phrase “the last item” of damage means the statute of limitations should not begin to run on his claim until the time when he would collect his last workers' compensation payment. Since Brown is permanently disabled and believed he was eligible to receive payments for life, Brown argues that his “last item” of damage will not occur until the payment immediately preceding his death, which is also when Brown believes the statute of limitations should begin to run.

Brown relies heavily on the Missouri Supreme Court case Sabine v. Leonard, 322 S.W.2d 831 (Mo.1959), to support his argument. This reliance is misplaced. Sabine dealt with the repayment of a promissory note. Id. at 832. The court held that because the debt was to be repaid in monthly installments, the statute of limitations for the creditor to sue the debtor did not begin to run until the last payment was due. Id. at 838. In contrast, in this case there was a single wrong—CRST's alleged failure to maintain insurance coverage—rather than a series of continuing wrongs, which were the repeatedly missed payments on the promissory note. Thus, Sabine is inapposite. Further, Brown's argument contravenes one of the purposes of creating a statute of limitations in the first place: to encourage timely suits. Under Brown's theory, he would be able to bring his claim possibly decades after the sole alleged injury occurred.

Brown offers no authority to support his contention that the statute of limitations begins to run only upon his death. His argument ignores Missouri cases that directly address the applicable statute of limitations for insurance disputes. See, e.g., Branstad v. Kinstler, 166 S.W.3d 134, 136–37 (Mo.Ct.App.2005) (determining that the five-year statute of limitations began to run when the plaintiff “received notice that his carrier denied coverage” for his loss); Nuspl, 842 S.W.2d at 922 (stating that a cause of action accrues when a party first sees that he will sustain damage). Brown's “last item” argument contradicts these cases by focusing exclusively on the “last item” language. Rather, as these cases show, when Section 516.100 is read as a whole, the more appropriate inquiry is determining when Brown's damages became ascertainable.

B. Damages Capable of Ascertainment

Brown's claim is more appropriately analyzed through a determination of when his damages were “sustained” and became “capable of ascertainment.” ³Mo. Ann. Stat. § 516.100. The district court held that Brown's damages were ascertainable on March 8, 2005, which was the date Brown's attorney acknowledged in writing the position of the Department of Insurance that Brown did not have valid workers' compensation insurance because CNA had...