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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

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No. 15-2861

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Decker Plastics Inc.

lllllllllllllllllllll Plaintiff - Appellant

v.

West Bend Mutual Insurance Company

lllllllllllllllllllll Defendant - Appellee

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Appeal from United States District Court 

for the Southern District of Iowa - Council Bluffs

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 Submitted: March 11, 2016

 Filed: August 19, 2016

[Published]

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Before LOKEN, BYE, and KELLY, Circuit Judges.1

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PER CURIAM.

At the time in question, Al’s, Inc. of Storm Lake, Iowa (“A1’s”), packaged and

sold landscaping materials. Decker Plastics Corp. (“Decker”) sold plastic bags to

1

This opinion is being filed by Judge Loken and Judge Kelly pursuant to 8th

Cir. Rule 47E. 

Appellate Case: 15-2861 Page: 1 Date Filed: 08/19/2016 Entry ID: 4439205 
A1’s that A1’s filled with landscaping materials (sand and rock) and stored outdoors

for sale to its customers. Because Decker failed to manufacture the bags with an

ultraviolet inhibitor (“UVI”), the bags deteriorated in the sunlight, causing small

shreds of plastic to commingle with A1’s landscaping materials, sometimes while still

in A1’s inventory and sometimes after delivery to its customers. As the contaminant

could not be inexpensively separated from A1’s products, Al’s had to clean spilled

materials from customer sites, purchase replacement bags from another supplier, and

pay to clean up its own premises. 

A1’s sued Decker to recover its losses. Decker and A1’s settled the lawsuit,

and Decker filed a claim with its comprehensive general liability (“CGL”) insurer,

West Bend Mutual Insurance Company (“West Bend”). West Bend denied coverage. 

Decker commenced this action in Iowa state court. West Bend removed, invoking the

district court’s diversity jurisdiction, and moved for summary judgment on numerous

grounds. The district court granted summary judgment, concluding there was no

“occurrence” triggering coverage under the terms of West Bend’s policy as construed

in Pursell Constr., Inc. v. Hawkeye-Sec. Ins. Co., 596 N.W.2d 67, 70 (Iowa 1999). 

Decker appeals. Iowa law governs our interpretation of the West Bend policy. 

Reviewing the grant of summary judgment de novo, we conclude there was an

occurrence. Accordingly, we reverse and remand. 

The West Bend policy provided coverage for an “occurrence” resulting in

“property damage.” Like the policy at issue in Pursell, 596 N.W.2d at 70, West

Bend’s policy defined “occurrence” as “an accident, including continuous or repeated

exposure to substantially the same general harmful conditions.” Under Iowa law, an

“accident” is “an undesigned, sudden, and unexpected event, usually of an afflictive

or unfortunate character, and often accompanied by a manifestation of force. . . . [The

term] clearly implies a misfortune with concomitant damage to a victim, and not the

negligence which eventually results in that misfortune.” Id. (quotation omitted).

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Appellate Case: 15-2861 Page: 2 Date Filed: 08/19/2016 Entry ID: 4439205 
In Pursell, the Supreme Court of Iowa considered whether the insurer’s CGL

policy covered third party negligence and breach-of-contract claims against the

insured, a construction contractor whose defective workmanship -- building the lower

levels of two houses below the floodplain -- required costly remedies to bring the

houses into compliance with a local ordinance. 596 N.W.2d at 68. The court held

there was no occurrence triggering coverage:

We agree with the majority rule and now join those jurisdictions

that hold that defective workmanship standing alone, that is, resulting in

damages only to the work product itself, is not an occurrence under a

CGL policy. 

Id. at 71; accord Liberty Mut. Ins. Co. v. Pella Corp., 650 F.3d 1161, 1175-76 (8th

Cir. 2011) (defective windows); Norwalk Ready Mixed Concrete, Inc. v. Travelers

Ins. Co., 246 F.3d 1132, 1136-37 (8th Cir. 2001) (faulty concrete work that damaged

a parking lot). West Bend argued, and the district court agreed, “that A1’s claimed

losses against Decker Plastics, as foreseeable and expected consequences of Decker

Plastics’ defective workmanship [omitting UVI from the bags it sold A1’s], did not

result from an ‘accident,’ and were not an ‘occurrence’ under” West Bend’s policy.

We disagree with this analysis because it disregards the Supreme Court of

Iowa’s narrow holding in Pursell -- that a claim of “defective workmanship standing

alone, that is, resulting in damages only to the work product itself,” is not an

occurrence. 596 N.W.2d at 71. Here, Decker’s defective bags were sold to its

customer, A1’s, which then used the bags to store its own property, landscaping

materials. The defective bags unexpectedly deteriorated, causing damage to A1’s

other property. The deterioration of the bags was the covered occurrence. To

rephrase Pursell’s definition of “accident,” the occurrence was “a misfortune with

concomitant damage to a victim [A1’s], and not the negligence [of Decker] which

eventually result[ed] in that misfortune.” The covered property damage (if any) was

to A1’s property other than the bags.

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Appellate Case: 15-2861 Page: 3 Date Filed: 08/19/2016 Entry ID: 4439205 
We have repeatedly construed “occurrence” to cover damages to property that

was not the insured’s work product. In National Union Fire Insurance Co. v. Terra

Industries, Inc., contaminated carbon dioxide was sold to third party manufacturers

and incorporated into consumer beverages. 346 F.3d 1160, 1164-65 (8th Cir. 2003). 

Applying Iowa law, we concluded that the incorporation of the contaminated product

into a third-party product “constituted an occurrence resulting in property damage.” 

Id. at 1165 (quotations omitted). In Ferrell v. West Bend Mutual Insurance Co., a case

factually similar to this, we held that the deterioration of defective protective film that

caused damage to the customer’s tomato plants was a covered occurrence. 393 F.3d

786, 795 (8th Cir. 2005) (applying Wisconsin law). Perhaps most tellingly, in

Lexicon, Inc. v. ACE American Insurance Co., we applied Arkansas law that included

the same definition of “occurrence” as Pursell and held that the collapse of a defective

silo causing damage to the purchaser’s contents and equipment was a covered

occurrence, but the damage to the insured’s work product -- the silo -- was not. 634

F.3d 423, 425-27 (8th Cir. 2011). We predict that the Supreme Court of Iowa would

follow the reasoning of these cases and limit its holding in Pursell to cases where the

alleged “occurrence” is “defective workmanship standing alone, that is, resulting in

damages only to the work product itself.” 

For these reasons, we reverse the district court’s ruling that there was no

“accident,” therefore no “occurrence,” and therefore no coverage of Decker’s claim. 

On appeal, West Bend urges us to affirm on the additional alternative grounds it

argued to the district court -- that there was no “property damage” triggering coverage,

and that A1’s claims against Decker are excluded from coverage by the contractualliability exclusion, the “your product” exclusion, and the impaired-property exclusion. 

However, as in Lexicon, 634 F.3d at 428, we conclude that these issues should

initially be considered by the district court. Accordingly, the judgment of the district

court is reversed, and the case is remanded for further proceedings not inconsistent

with this opinion.

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Appellate Case: 15-2861 Page: 4 Date Filed: 08/19/2016 Entry ID: 4439205