Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca8-07-02246/USCOURTS-ca8-07-02246-0/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 

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United States Court of Appeals

FOR THE EIGHTH CIRCUIT

___________

No. 07-2246

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St. Paul Fire and Marine Insurance *

Company; Charter Oak Insurance *

Co., *

*

 Plaintiffs - Appellees, *

* Appeal from the United States

v. * District Court for the Western

* District of Missouri.

Building Construction Enterprises, *

Inc., *

*

 Defendant - Appellant, *

*

v. *

*

Building Construction Enterprises, *

Inc., *

*

 Third Party Plaintiff - *

Appellant, *

*

v. *

*

North River Insurance Company, *

*

 Third Party Defendant - *

Appellee, *

*

Great American Alliance Insurance *

Company, *

*

 Third Party Defendant. *

Appellate Case: 07-2246 Page: 1 Date Filed: 05/23/2008 Entry ID: 3437047
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The Honorable Nanette K. Laughrey, United States District Judge for the

Western District of Missouri.

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Submitted: February 15, 2008

 Filed: May 23, 2008

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Before MELLOY, GRUENDER, and SHEPHERD, Circuit Judges.

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MELLOY, Circuit Judge.

Appellant, a general contractor, sought coverage under two insurance policies

for expenses associated with the repair and reconstruction of a subcontractor’s

installation of underground concrete structures at a military base in Fort Riley,

Kansas. Appellee-insurers brought the present declaratory judgment action to

determine whether they owed coverage. The district court1

 applied Missouri law, the

law of the forum state, to determine whether Missouri or Kansas substantive law

should govern the insurance policies. See Eggleton v. Plasser & Theurer Exp. Von

Bahnbaumaschinen Gesellschaft, MBH, 495 F.3d 582, 585 (8th Cir. 2007) (stating

that the law of the forum state controls the choice-of-law analysis). The district court

determined that, under Missouri law, the multi-factored test contained in Restatement

(Second) of Conflict of Laws § 188 controlled and required examination of the states’

contacts with the present case.

Applying the Section 188 test, the district court found that Missouri had more

substantial contacts than did Kansas. Appellant, a Kansas corporation, had its

headquarters in Missouri. Appellant carried out general construction activities in

several states but performed only about 10% of its activities in Kansas. The parties

otherwise had substantial contacts with Missouri: Missouri was not only the location

of Appellant’s headquarters, but the location of Appellant’s insurance agent and the

Appellate Case: 07-2246 Page: 2 Date Filed: 05/23/2008 Entry ID: 3437047
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place of contracting for the purpose of entering into the insurance contracts. After

finding that Missouri law governed the insurance policies, the district court held that

Missouri law did not require Appellees to provide coverage for Appellant’s claim. 

Appellant argued below that a different Restatement provision, Restatement

(Second) of Conflict of Laws § 193, should control and would treat the site of the

alleged harm, Kansas, as a controlling factor in the choice-of-law determination.

Appellant also argued that Kansas law should apply even under the test of Section

188. On appeal, Appellant concedes that if Missouri law controls there is no

coverage. Appellant argues, however, that the district court erred in applying

Missouri law. 

“We review the district court’s choice-of-law determination de novo.” Id.

Missouri has adopted Restatement (Second) of Conflict of Laws §§ 188 and 193.

Viacom, Inc. v. Transit Cas. Co., 138 S.W.3d 723, 724–25 (Mo. 2004). Section 188

is a general choice-of-law test for use when a contract contains no choice-of-law

provision. It is a multi-factored test for assessing the contacts a state has with the

parties and the underlying events in a case. See Viacom, 138 S.W.3d at 725

(describing Section 188). Section 193 is a more specific choice-of-law provision that

addresses “contracts of fire, surety or casualty insurance” and treats the principal

location of the insured risk as the most important factor in the choice-of-law

determination. See Restatement (Second) of Conflict of Laws § 193 (“The validity

of . . . [the] insurance and the rights created thereby are determined by the local law

of the state which the parties understood was to be the principal location of the insured

risk during the term of the policy . . . .” ). 

The insurance policies in the present case were multiple-risk policies with

coverage areas defined as the United States and Canada and without choice-of-law

provisions. With multiple-risk insurance policies, there often will be no principal

location for the insured risk. In such circumstances, the general, multi-factored test

Appellate Case: 07-2246 Page: 3 Date Filed: 05/23/2008 Entry ID: 3437047
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of Section 188, rather than the site-specific test of Section 193, typically controls.

See Restatement (Second) of Conflict of Laws § 193 cmt. a (stating that in cases

where “there may be no principal location of the insured risk . . . the location of the

risk can play little role in the determination of the applicable law. The law governing

insurance contracts of this latter sort must be determined in accordance with the

principles set forth in the rule of § 188.”); Restatement (Second) of Conflict of Laws

§ 193 cmt. b (stating that situations where the risk cannot “be located, at least

principally, in a single state . . . and where the location of the risk has less

significance, include . . . where the policy covers a group of risks that are scattered

throughout two or more states.”). Comment f to Section 193, however, instructs that

when a multiple-risk policy incorporates the statutory forms from several states, courts

may elect to treat the single, multiple-risk policy as though it were a collection of

separate, single-risk policies, each governed by the law of a different state.

See Restatement (Second) of Conflict of Laws § 193 cmt. f (“[T]he single policy will

usually incorporate the special statutory forms of the several states involved.

Presumably, the courts would be inclined to treat such a case, at least with respect to

most issues, as if it involved [several] policies, each insuring an individual risk.”).

The district court determined that there was no principal location for the insured

risk in this case such that the multi-factored Section 188 test, rather than the sitespecific Section 193 test, applied. In reaching this conclusion, the district court

emphasized that Appellant conducted business in several states and that nothing in the

policies indicated the parties anticipated Kansas would be a primary location for the

insured risks. 

In arguing that there was a primary location for the insured risk and that the

site-specific test of Section 193 should apply, Appellant urged the court to treat each

one of its many underlying, written construction contracts as a separately insured

contract, each setting forth a clearly defined location for a primary insured risk. In

making this argument, Appellant pointed out that one of the insurance policies

Appellate Case: 07-2246 Page: 4 Date Filed: 05/23/2008 Entry ID: 3437047
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provided that each written construction contract would be deemed a “designated

contract.” Appellant inferred that the policy’s labeling of each written construction

contract as a “designated contract” placed the present case squarely within the

circumstances described by Comment f to Section 193. 

While one of the policies, in fact, used the term “designated contracts,” and the

other used the term “described projects” we find no indication that the parties intended

a different state’s laws to control interpretation of the insurance policies for each

written construction contract. The policy that contained the term “designated

contracts” used that term in a section defining total aggregate policy limits and policy

limits for designated contracts. The policy that contained the term “described

projects” used that term in a section addressing deductibles. Neither policy, however,

set forth a mechanism for Appellant to provide Appellees with copies of the written

construction contracts or to inform Appellees of the sites of the work to be performed.

Also, Appellant does not claim to have communicated information about its many

written construction contracts to Appellees. Accordingly, while the policies

demonstrate that the parties envisioned certain coverage limits or deductibles might

apply on a project by project basis, there was no indication within the insurance

policies or in subsequent documents that it was “possible to predict with fair accuracy

where the risk [would] be located, or at least principally located, during the life of the

policy.” Restatement (Second) of Conflict of Laws § 193 cmt. b. 

As noted, the district court ultimately determined that there was no single

principal location for the insured risk under the policies such that the general test of

Section 188 rather than the site-specific test of Section 193 controls. We agree with

the district court’s conclusion that Missouri law required the application of Section

188. We also agree with its ultimate conclusion that Missouri had more substantial

contacts than did Kansas. We have considered Appellant’s other arguments, and for

the reasons set forth in the district court’s well-reasoned opinion, we affirm.

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Appellate Case: 07-2246 Page: 5 Date Filed: 05/23/2008 Entry ID: 3437047