Mich. Millers Mut. Ins. Co. v. Asoyia, Inc.
Decision Date | 16 July 2015 |
Docket Number | No. 14–2270.,14–2270. |
Citation | 793 F.3d 872 |
Parties | MICHIGAN MILLERS MUTUAL INSURANCE COMPANY, Plaintiff–Appellant, v. ASOYIA, INC., formerly known as Asoyia, LLC; United Fire & Casualty Company, as Subrogee of Sunnyside Country Club; Vivan Jennings, Defendants–Appellees. |
Court | U.S. Court of Appeals — Eighth Circuit |
Don R. Sampen, argued (Mark Douglas Paulson, Amy R. Paulus, Michael L. Duffy, on the brief) Chicago, IL, for appellant.
Thomas M. Boes, argued, Des Moines, IA (Richard S. Fry, Dana L. Oxley, Cedar Rapids, IA, Sean M. O'Brien, Des Moines, IA, on the brief) for appellee.
Before RILEY, Chief Judge, LOKEN and SHEPHERD, Circuit Judges.
In 2006, Asoyia, LLC (now Asoyia, Inc.), an Iowa producer of soybean oil, purchased a general commercial agribusiness insurance policy and a commercial umbrella liability policy from Michigan Millers Mutual Insurance Company (Michigan Millers). The policies covered general liability on an occurrence basis. After a fire on June 18, 2007, destroyed the Sunnyside Country Club (Sunnyside)—one of Asoyia's customers—Sunnyside's insurer and subrogee, United Fire & Casualty Company (United Fire), sued Asoyia and former chief executive officer Vivan Jennings in Iowa state court, alleging Asoyia's soybean oil caused the fire when a pile of laundered rags containing the oil spontaneously combusted.
In this diversity case, see 28 U.S.C. § 1332(a)(1), Michigan Millers seeks a declaration that it has no duty to defend or indemnify Asoyia or Jennings in the underlying suit because of Asoyia's prejudicial failure to provide prompt notice of the loss. See 28 U.S.C. §§ 2201, 2202 ; Fed.R.Civ.P. 57. On cross-motions for summary judgment, the district court1 determined Jennings was insured under Asoyia's policies but that genuine disputes of material fact remained as to whether Michigan Millers could deny coverage for lack of notice. On December 20, 2013, a jury determined the late notice did not prejudice Michigan Millers, and the district court entered judgment against Michigan Millers. Michigan Millers timely filed a post-trial motion for judgment as a matter of law or a new trial, which the district court denied. Michigan Millers appeals,2 and we affirm.
The parties stipulated to the following facts for the jury trial:
At trial, Michigan Millers—maintaining United Fire's investigation was biased—presented evidence indicating Michigan Millers could not perform a full investigation of the fire scene because Sunnyside was fully repaired before Michigan Millers received notice and the existing investigations failed to preserve adequately the evidence of causation. Fire investigation experts for both sides testified it was important to investigate promptly to enable investigators to see the evidence in place, process it properly, secure contemporaneous witness statements, and confer with other investigators about possible causes.
After reviewing approximately one thousand pages of documents, Michigan Millers's fire investigation expert, Scott Dillon, testified the existing fire investigations were inadequate with respect to (1) the completion and documentation of witness interviews;3 (2) the examination and preservation of artifacts in general and the rag pile in particular; (3) the number, subject matter, and quality of photographs; and (4) the investigation of other potential causes of the fire, including what may have been an electrical fan near the suspected origin of the fire. In Dillon's view, those inadequacies made it impossible to determine the source of the fire because memories could fade and evidence was lost or had deteriorated over time. In addition to complaining the investigations were “so severely lacking in organization and accuracy” that they deprived Michigan Millers of the opportunity to “piece together” its own meaningful investigation, Michigan Millers claimed prejudice based on its inability to assess the damages and participate in settlement discussions before repairs were complete.
In response, United Fire presented evidence indicating Michigan Millers suffered no prejudice from the lack of notice because the investigations by Fire Marshal Boesen and United Fire more than adequately preserved the evidence to enable Michigan Millers to complete its own investigation, even two years after the fire. At trial, Fire Marshal Boesen described his process for photographing the fire scene and “systematically” processing the debris “to determine where [and how] the fire started.” Having taken more than 120 photographs, Fire Marshal Boesen described for the jury the analytical importance of several key findings recorded in his photographs. Fire Marshal Boesen also testified that, as part of his investigation into the cause of the fire, he interviewed the firefighters on the scene and Sunnyside employees. When Michigan Millers challenged his investigative methods on cross-examination, Fire Marshal Boesen maintained he adequately investigated, photographed, and otherwise documented the fire, ruling out several alternative theories before reaching a conclusion as to causation.
United Fire's fire investigation expert, Lonn Abeltins, who arrived at the scene shortly after the fire, testified he too thoroughly examined all relevant potential causes of the fire. Abeltins, who took approximately 160 photographs, testified he and other investigators thoroughly documented and photographed the scene in compliance with industry standards. According to Abeltins and others, the photographs and witness interview notes they took and the artifacts and debris they collected, including the rag pile and key electrical system components, were all still available and would allow Michigan Millers to complete its own independent investigation.
United Fire also criticized Michigan Millers for failing to investigate even after getting notice. United Fire emphasized that Michigan Millers waited two-and-a-half years to hire Dillon and then asked for a very limited analysis, instructing Dillon to determine whether the Sunnyside fire “was documented such that another investigator could come to a meaningful and independent conclusion as to ... the origin and cause of the fire without performing a fire scene investigation, without looking at artifacts collected at the scene, and without interviewing any witnesses.” Repeatedly decrying what it saw as Michigan Millers's failure to make any effort to interview witnesses or review the stored evidence, United Fire...
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