Vette Co. v. Aetna Cas. & Sur. Co.

• Decision Date: 10 January 1980
• Docket Number: No. 79-1200,79-1200
• Citation: 612 F.2d 1076
• Parties: VETTE COMPANY and Kansas City Boneless Beef, Inc., Appellants, v. The AETNA CASUALTY & SURETY COMPANY, Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 1076

612 F.2d 1076

VETTE COMPANY and Kansas City Boneless Beef, Inc., Appellants, v. The AETNA CASUALTY & SURETY COMPANY, Appellee.

No. 79-1200.

United States Court of Appeals Eighth Circuit.

Submitted Nov. 6, 1979.

Decided Jan. 10, 1980.

Michael J. Drape, Kansas City, Mo. (argued), and Stanley M. Burnstein, Kansas City, Mo., on brief, for appellants.

R. Frederick Walters, Linde, Thomson, Fairchild, Langworthy, & Kohn, Kansas City Mo., for appellee.

Before ROSS and STEPHENSON, Circuit Judges, and McMANUS ^*, District Judge.

McMANUS, District Judge.

In this removed action, corporate plaintiffs Vette Company (Vette) and Kansas City Boneless Beef, Inc. (Boneless) appeal from summary judgment below denying Vette recovery for lack of an insurable interest under a fire insurance policy issued to it by defendant, The Aetna Casualty & Surety Company (Aetna), covering the contents of a building in Raymore, Missouri destroyed by fire March 2, 1975. We reverse and remand.

At the outset, we recognize that in reviewing a decision of a district court to grant a summary judgment, we apply the same standard as the trial court. Butler v. MFA Life Insurance Co., 591 F.2d 448, 451 (8th Cir. 1979). Summary judgment should not be entered unless the pleadings, stipulations, affidavits and admissions in the case show that there exists no genuine issue as to any material fact. FRCP 56(c); See Poller v. Columbia Broadcasting System, Inc., 368 U.S. 464, 467, 82 S.Ct. 486, 7 L.Ed.2d 458 (1962). It is an extreme and treacherous remedy, not to be entered unless the movant has established its right to a judgment with such clarity as to leave no room for controversy and unless the other party is not entitled to recover under any discernible circumstances. Equal Employment Opportunity Comm. v. Liberty Loan Corp., 584 F.2d 853, 857 (8th Cir. 1978); 10 Wright & Miller, Federal Practice and Procedure § 2725, pp. 502-03.

In passing upon a motion for summary judgment the court is required to view the facts in the light most favorable to the party opposing the motion and to give that party the benefit of all reasonable inferences to be drawn from the underlying facts disclosed in pleadings and affidavits filed in the case. Adickes v. S. H. Kress & Co., 398 U.S. 144, 158-59, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970); Equal Employment Opportunity Comm. v. Liberty Loan Corp., supra ; also for recent discussion of court's negative discretion in ruling on motion for summary judgment, See McLain v. Meier, 612 F.2d 349 (8th Cir., 1979).

The entire record, including a lengthy stipulation, discloses the following undisputed facts. The corporate plaintiffs have interlocking ownership. All the common stock of Vette was owned by Dwight "Jack" Rice (Rice) and his wife. Rice was president and chief executive officer of Vette. The common stock of Boneless was owned 50% By Rice and 50% By Harold Lambrecht (Lambrecht). Rice and Lambrecht were president and vice president-manager respectively of Boneless. Vette operated a chili plant at Lee's Summit, Mo., and until the fall of 1973, Boneless operated a meat boning plant in the Missouri Bottoms at Guinotte.

Prior to 1973, Vette purchased a building at 234 N. Madison in Raymore, Mo., and it was decided that Boneless would expand its operation and move into the newly purchased building. In October, 1973, after extensive remodeling, Boneless occupied the Raymore plant. Boneless purchased all the equipment needed to make the building usable as a boning plant.

On August 31, 1974, Aetna issued fire policy # 30 FP 801960 (FP60) with $200,000 coverage on the building and $100,000 on the contents with Boneless the named insured. On December 6, 1974, at Lambrecht's request, Aetna reduced the building coverage to $100,000 retroactive to August 31, 1974. When Rice learned of the reduction, he requested and received policy # 30 FP 26627 (FP27) from Aetna with $200,000 coverage on the building and $100,000 on the contents with Vette the named insured, effective January 21, 1975. ¹

After the fire Lambrecht prepared an inventory of the contents including all equipment and meat in the plant. On April 22 at a meeting attended by Aetna's claim representative, Rice and Lambrecht, it was agreed that Lambrecht's inventory belonged to Boneless and the damage figures for the contents were reasonable. Thereafter, upon receiving $154,779.92, Boneless executed a release to Aetna of all its claims under policy FP60. Additionally, at the meeting, after receiving a total of $176,884.07 from Aetna, Vette agreed that the building coverage of its policy had been fully satisfied. However, Aetna refused to pay Vette on the contents portion of its policy on the ground of no insurable interest. It is with respect to this dispute concerning whether Vette had an insurable interest in the contents of the building that we find the record insufficient to conclude that no genuine issue of material fact exists.

The characterization of "insurable interest" set forth in 44 C.J.S. Insurance § 175 has been adopted in Missouri, the applicable law in this case. That section reads:

In general a person has an insurable interest in the subject matter insured where he has such a relation or connection with or concern in, such subject matter that he will derive pecuniary benefit or advantage from its preservation, or will suffer pecuniary loss or...