# U ni te d S ta te s Co ur t of A pp ea ls For the Eig hth Circu it

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No. 1 3- 23 52

__ __ __ __ __ __ __ __ __ __ __ __ __ _ Uni te d F ire & Cas ua lt y

Ins ur an ce Co m

pa ny

ll ll ll ll ll ll ll ll ll ll l Pla in ti

ff - App el le e

v.

Den ni s Th om

ps on

ll ll ll ll ll ll ll ll ll ll l Defe nd

an t - Ap pe ll an t

W ay ne Ro ck et t; Ro se Co nc ret e Pro du ct s, In c.

ll ll ll ll ll ll ll ll ll ll l Defe nd

an t s

__ __ __ __ __ __ App eal fro m

Uni te d S ta te s Di st ric t Co ur t fo r th e Eas te rn Dis tri ct of M is so ur i - C ap e Gir ard eau

__ __ __ __ __ __
Su bm it te d: Apri l 1 4, 2 01 4 Fil ed : J ul y

11 , 20 14

__ __ __ __ __ __ Befo re RI LEY, Chi ef J ud ge , MELLOY and BENTON, Circu it Ju dg es

.

__ __ __ __ __ __ MELLOY, Circu it Ju dg e.

Pl ai nt iff Uni te d Fi re & Cas ua lt y In su ran ce Co m pa ny ("Un it ed Fi re" ) so ug ht a de cl arat or y jud gm en t in th e di s t r i ct co ur t req ue st in g th e co ur t de cl are th at an in su ran ce po li cy it is su ed to Ro se Co nc ret e Pro du ct s, In c., di d no t pr ov id e co ve rag eto W ay ne Ro ck et t, a su pe rv is or y le ve l em pl oyee of Ro se Co nc ret e. Ro ck et t was in vo lv ed in an acci de nt th at in jure d a fel lo w em

pl oyee, po te nt ia ll y im

pl ic at in g Ro se Co nc ret e's Uni te d Fi re in su ran ce po li cy

. Uni te d Fi re arg ue d th at th e te rm "d ire ct or s" in th e i n s u r a nc e po li cy un am bi gu ou sl y pr ov id ed co ve rag e on ly to Ro se Co nc ret e's

act ua l bo ard of di rect or s an d no t to em pl oyees su ch as Ro ck et t

. Th e d i s t r ic t co ur t 1

ag reed an d g ran te d s um m ary jud gm en t t o Un it ed Fir e. W e aff irm.

I.

Ro se Co nc ret e is a co rp or at io n in Sco t t C i t y, M is so ur i. On Mar ch 9, 20 05
, Den ni s Tho m

ps on , a Ro se Co nc ret e em pl oyee, was op erat in g a du m p tru ck whe n it

ov ert ur ne d and in

jure d hi m . The ca us e o f th e acc id en t was la te r de te rm in ed to be a de fect iv e hydrau li c pu m

p in th e tru ck

. Tho m

ps on su ed th e own ers of Ro se Co nc ret e, Larry Payne an d S te ve Ober m an n, fo r da m ag es in Mi ss ou ri st at e co ur t. As th e su it

pr og res se d, Tho m

ps on ad de d Ro ck et t, hi s su pe rv is or at Ro se Co nc ret e, to th e su it an d di sm is se d Payne an d Obe rm an n. Tho m ps on al le ge d th at Ro ck et t act ed ne gl ig en tl y be cau se he kn ew th e du m p tru ck ha d a def

ect iv e h y dr au li c p um

p a nd y et co nt in ue d

to all ow Th om

ps on to op erat e th e v eh ic le

.

At th e ti m e of th e acci de nt , Ro se Co nc ret e ha d a co m m erci al ge ne ral li ab il it y in su ran ce po li cy wit h Uni te d Fi re. Uni te d Fi re ag reed t o r e p r es en t Ro ck et t in th e Mi ss ou ri st at e co ur t su it bu t res erv ed it s rig ht s be cau s e it be li ev ed Ro ck et t di d no t
qu al ify as an "i ns ur ed " un de r th e po li cy

. Ro ck et t ev en tu al ly m ov ed to Ken tu ck y ,
ceas ed co nt act wi t h R o s e Co nc ret e, an d fai le d to res po nd to in te rro ga to rie s or
ot he rwis e co op erat e wit h li ti ga ti on

. The Mi ss ou ri st at e co ur t en te red an $8 50 ,00 0 de fau lt jud gm en t ag ai ns t Ro ck et t an d i n fa vo r of Tho m ps on

.

The Hon or ab le Ro dn ey W

. Si pp el
, Uni te d St at es Dis tri ct Ju dg e fo r th e East ern 1 Dis tri ct of M is so ur i.

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-Uni te d Fire th en br ou gh t th is su it in th e East ern Dis tri ct of Mi ss ou ri, seek in g

a de cl arat or y jud gm en t th at Ro se Co nc ret e's in su ran ce po li cy di d no t pr ov id e

co ve rag e to Ro ck et t an d th at , th eref or e, Uni te d Fi re w a s no t req ui red to pa y th e $8 50 ,00 0 jud gm en t. Ro ck et t co un te rcl ai m ed th at he was an in su red pe rs on un de r th e
po li cy an d th at Uni te d Fi re was th eref or e ob li ga te d to in de m

ni fy hi m

. Tho m

ps on al so fil ed a co un te rcl ai m req ue st in g eq ui ta bl e ga rn is hm en t of th e co m m erci al ge ne ral li ab il it y po li cy, se e Mo

. Ann

. St at

. § 37 9.2 00

. He to o al le ge d th at Ro ck et t was in su red un de r th e p ol ic y

.

The co m m erci al ge ne ral li ab il it y

in su ran ce p ol ic y

read s as fol lo ws:

SECTION I—C OVERAGES

1. In su rin g Ag reem en t

a. [Un it ed Fi re] wil l pa y th os e su m s th at th e in su red be co m es le ga ll y ob li ga te d to pa y a s da m ag es be cau se of "b od il y in jury" or "p ro pe rty da m a g e " to whi ch th is in su ran ce ap pl ie s. W e wil l ha ve th e rig ht an d du ty to de fen d th e in su red ag ai ns t an y "s ui t" se ek in g th os e d a mages

. Howev er, we wil l ha v e n o du ty to de fen d th e in su red ag ai ns t an y "s ui t" se ek in g da m ag es fo r "b od il y i n jury" or "p ro pe rty da m ag e" to whi ch th is in su ran ce do es no t ap pl y

. . .

SECTION II— W HO IS AN INSURED

1. If y ou are d es ig na te d i n t he Decl arat io ns as:

a. An in di vi du al
, y ou an d y ou r sp ou se are in su red s, bu t on ly wit h res pe ct to th e co nd uc t of a bu si ne ss of whi ch y ou are th e so le own er.

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-b. A pa rtn ers hi p or joi nt ve nt ur e, y ou are an in su red

. You r
mem be rs , y ou r pa rtn ers , an d th ei r sp ou se s are a l s o i n s u r ed s, bu t on ly wit h res pe ct to th e co nd uc t of y ou r bu si ne ss

.

c. A li m it ed li ab il it y co m pa ny, y ou are an in su red

. You r

m em be rs a r e al so in su red s, bu t on ly wit h res pe ct to th e
co nd uc t of y ou r bu si ne ss

. You r m an ag ers are in su red s, bu t

on ly w it h re sp ect to th ei r du ti es as you r m an ag ers

.
d. An or ga ni zat io n ot he r t h a n a pa rtn ers hi p, joi nt ve nt ur e or li m it ed li ab il it y co m

pa ny, y ou are an in su red

. Y ou r

" exec ut iv e of

fi cer s" an d di re ct or

s ar e in su re ds

, bu t on ly wi th re sp ect to th ei r du ti es as yo ur o ff ic er s or di re ct or

s. Y ou r st oc kh ol de rs ar e al

so in su re ds

, bu t on ly wi th re sp ect to th ei r l ia bi li ty as st oc kh ol de rs

.

e. A tru st , y ou are an in su red

. You r tru st ees are al so in su red s, bu t o nl y wit h re sp ect to th ei r du ti es as t ru st ees

. (em ph as is ad de d)

.

The di st ric t cou rt ent ered su m m ary jud gm en t in fav or of Uni te d F ire , fin di ng th at Ro ck et t was no t an in su red be cau se Ro se Co nc ret e was "[a ]n or ga ni zat io n ot he r th an a p art ne rs hi p, j oi nt ve nt ur e or li m it ed li ab il it y co m pa ny," an d bec au se Ro ck et t

was no t an ex ecu ti ve of

fic er or di rect or wit hi n th e m ean in g of th e po li cy 's te rm s. In ad di ti on , th e di st ric t co ur t fo un d th at th e po li cy co nt ai ne d ex cl us io ns rel at in g to

em pl oyee co ve rag e, so Ro ck et t c o u l d n ot be co ve red as an em pl oyee ei th er. Tho m ps on ap pe al s, arg ui ng th at Ro ck et t was a di rect or an d th eref or e co ve red by th e in su ran ce p ol ic y

.

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-II.

"We rev ie w th e di st ric t co ur t's gr an t of su mm ary jud gm en t de no vo ."
H a r le y sv il le W or ch es te r In s. Co

. v. Diam on dh ead Pro p. Owner s Ass 'n, 74 1 F.3 d
13 36
, 13 37 (8 th Ci r. 20 14 ). "Su m m ary jud gm e n t is pr op er if, aft er vi ewin g th e

ev id en ce an d dr awin g al l reas on ab le in fere nc es in th e li gh t mo s t fav or ab le to th e

no nm ov an t, no ge nu in e is su es of m at eri al fact ex is t an d th e m ov an t i s e n t it le d to jud gm en t as a m at te r of la w." Hay ek v. Ci ty of S t. Pau l, 48 8 F.3 d 10 49
, 10 54 (8 th Ci r. 20 07 ). The pa rti es ag ree th at Mi ss ou ri law ap pl ie s to th is di ve rs it y su it

. See 28 U.S.C. § 13 32 (a)( 1) ; Jo rd an v. Safe co In s. Co

. of Ill in oi s, 74 1 F.3 d 88 2, 88 4 (8 th Ci r. 20 14 ).

To rece iv e co ve rag e, Ro ck et t m us t mee t th e req ui rem en ts un de r se ct io n 1( d) of th e in su ra n ce po li cy be cau se Ro se Co nc ret e is "[a ]n or ga ni zat io n ot he r th an a
pa rtn ers hi p, j oi nt ve nt ur e, or li m it ed li ab il it y co rp or at io n." In ot he r wor ds
, Ro ck et t

m us t be a "d ire ct or ," wit hi n th e m ean in g of th e in su ran ce po li cy

. Ro se Co nc ret e di d 2

no t ha ve sp eci fic job ti tl es fo r it s em pl oyees. Th o mp s o n cl ai m s th at , a t th e ti m e of th e acci de nt , Ro ck et t was Ro se Co nc ret e's di rect or of op erat io ns

. Uni te d Fi re cl ai m s he was jus t an em

pl oyee, m os t li ke ly th e ge ne ral m an ag er. Tho m ps on arg ue s th at "d ire ct or " as us ed in th e in su ran ce po li cy is am bi gu ou s, an d th at Ro ck et t is an in su red "d ire ct or " b e c a u s e he of te n "d ire ct ed " pe op le an d pr oc es se s as pa rt of hi s job

. 3

Ro ck et t d oe s n ot all eg e th at he was a n " ex ecu ti ve off ic er." 2

Tho m ps on al so arg ue s th at Uni te d Fi re ad m it te d i n a n i n te rro ga to ry th at 3 "d ire ct or " is an am

b i g u o u s te rm in th e in su ran ce po li cy

. The in te rro ga to ry as ke d: "D oe s Pl ai nti ff's co m

m erci al ge ne ral li ab il it y po li cy de fin e th e di ffer en ce be twee n the

m ean in g of th e wor ds 'di re ct or ' an d 'm an ag er'? If so , p le as e st at e th e se ct io n of th e
co m m erci al ge ne ral li ab il it y po l i c y de fin in g th e di ffer en ce." Uni te d Fi re an swe red by no ti ng th at "Pl ai nt iff o b je c ts to th is In te rro ga to ry on th e gr ou nd s th at th e te rm s 'di rect or ' an d 'm an ag er' are no t de fin ed in th e In te rro ga to ry an d are am bi gu ou s." As is cl ear fro m th e co nt e x t , U n i t e d Fi re si m pl y ob jecte d to th e la ng ua ge in th e

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-Uni te d Fire arg ue s th at th e co nt ract is un am bi gu ou s an d on ly pr ov id es co ve rag e fo r

m em be r s o f R o s e Co nc ret e's bo ard of di rect or s. All pa rti es ag ree th at Ro ck et t was

ne ve r a m em

be r of th e b oa rd of d ire ct or s.

"When in te rp ret in g th e te rm s of an in su ran ce po li cy , [th e Mi ss ou ri Su p rem e Co ur t] ap pl ie s th e m ean in g th at wou ld b e u n de rs to od by an or di na ry pe rs on of

av erag e un de rs ta nd in g pu rch as in g th e in su ran ce." Sch m it z v. Great Am

. Ass ur

. Co
., 33 7 S.W .3d 7 0 0, 70 5– 06 (Mo . b an c 20 11 ). "In de te rm in in g whe th er or no t a wor d is am bi gu ou s, [Mi ss ou ri co ur ts ] ex am in e th e en ti re co nt ract an d ap pl y m ean in gs a
pe rs on of av erag e in te ll ig en ce an d ed uc at io n wou ld un de rs ta nd ." Bai le y v. Fed erat ed
Mu t. In s. Co
., 15 2 S.W .3d 35 5, 35 7 (Mo

. Ct

. App

. 20 04 ). "Word s are no t am bi gu ou s

m erel y be cau se th ei r m ean in g an d ap pl ic at io n co nf ou nd th e pa rti es ." Id

. Am bi gu it ie s

ex i s t whe n "t he re is du pl ic it y , in di st in ct ne ss , or un cert ai nt y in th e m ean in g of th e la ng ua ge in th e p ol ic y . Lan gu ag e is am bi gu ou s i f it is reas on ab ly ope n t o d iff eren t

co ns tru c t i o n s

. " G ul f In s. Co

. v. Nob le Bro ad
., 93 6 S.W .2d 81 0, 81 4 (Mo

. ba nc 19 97 ). Am

bi gu ou s t erm s ar e co ns tru ed ag ai ns t t he in su rer. St rad er, 2 30 S.W .3d at 62 4. If a co nt ract is no t a mb i g u o u s , th en it is en fo rced as writ te n. Bai le y , 15 2
S.W .3d at 3 57

.

W e be gi n by an al y zi ng se ct io n 1( d) in th e co nt ex t of th e en ti re po li cy

. See Am

. Nat'l Pro p. & Cas

. Co
., 40 0 S.W .3d at 42 5 (in st ru ct in g t h a t a t e r m in an in su ran ce

in te rro ga to ry it se lf; it di d no t ad m it th at th e i n s u r a n c e po li cy was am bi gu ou s. Mo reo ve r, wor ds in an in su ran ce po li cy must be in te rp ret ed in th e co nt ex t of ho w th ey are us ed in a pa rti cu la r co nt ract

. See, e.g ., Am

. Nat'l Pro p. & Cas

. Co

. v. W y at t, 40 0 S.W .3d 41 7, 42 5 (Mo

. Ct

. App

. 20 13 ). W e de cl in e t o u se th is in te rro ga to ry

r es po ns e as pr oo f of am

bi gu ou s la ng ua ge in th e in su ran ce po li cy

. The fact t h a t a n is ol at ed wor d in an in te rro ga to ry m ay be am bi gu ou s do es no t se rv e as an ad m is si on th at th e sa m e wor d us ed in a pa rti cu la r in su ran ce po li cy is li ke wis e am bi gu ou s. See St rad er v. Pro gr es si ve In s., 23 0 S.W .3d 62 1, 62 4 (Mo

. Ct

. App

. 20 07 ) (co nc lu di ng th at "wh et he r a te rm is am bi gu ou s is de t e r mi n e d in li gh t of th e sp eci fic fact ua l si tu at io n b efo re t he co ur t" ).

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-po li cy is "n ot to be read li te ral ly an d in is ol at io n, bu t m us t be co ns tru ed in th e co nt ex t of ho w it is us ed in th e po li cy ") (ci ta ti on s om it te d) ; Gol de n Ru le In s. Co

. v. R.S., 36 8
S.W .3d 32 7, 33 4 (Mo

. Ct

. App

. 20 12 ) ("Th e pl ai n m ean in g of th e va rio us te rm s in an in su ran ce p ol ic y

is no t de te rm in ed by vie win g t he ter m s i n i so la ti on bu t i n v ie win g th em in refe ren ce to th e who le po li cy ."). The Uni te d Fi re in su ran ce po li cy se pa rat es di ffer en t types of in su red s, de pe nd in g on wha t ki nd of bu si ne ss or ga ni zat io n is be in g in su red

. Fo r ex am

pl e, se ct io n 1( a) is fo r so le pr op rie to rs hi ps , 1( b) is fo r pa rtn ers hi ps , 1( c) is fo r li m it ed li ab il it y co rp or at io ns , 1( d) is fo r co rp or at io ns , an d 1( e) is fo r tru st s. Thu s, whe n co ns tru in g wha t "d ire ct or s" m ean s, th e fact th at "d ire ct or s" ap pe ars in 1( d) im pl ie s t ha t t he ter m

di rect or s i s u se d wi th in th e co nt ex t o f a co rp or at io n.

Co rp or at io ns in Mi ss ou ri are "co nt ro ll ed an d m an ag ed " by a bo ard of di rect or s. Mo

. Ann

. St at

. § 35 1.3 10

. A bo ard of di rect or s co ns is ts of on e or m or e m em be rs who

are el ect ed b y t h e co rp or at io n's sh areh ol de rs

. Mo

. Ann

. St at

. § 35 1.3 15 (1 ). W e

co nc lu de th at whe n lo ok in g at se ct io n 1( d) in th e co nt ex t of th e su rro un di ng
pr ov is io ns , co ve rag e is p ro vi de d on ly fo r m em be rs of Ro se Co nc ret e's bo ard of di rect or s. Thi s co nc lu si on i s f ur th er bu tt res se d by lo ok in g at th e ot he r in su red s id en ti fie d in 1( d)
, whi ch in cl ud e ex ecu ti ve of fic ers an d sh areh ol de rs

. A co rp or at io n is ge ne ral ly com

po se d o f ex ecu ti ve off

ic ers , a bo ard of d ire ct or s, an d s ha reh ol de rs

. See Mo

. Ann

. St at

. § 35 1.0 10 –4 09 (Mi ss ou ri la ws rel at in g to di rect or s, of fic ers , an d

s h a reh ol de rs ). Thu s, whe n an al y zi ng th e te rm "d ire ct or s" wit hi n th e co nt ex t of th e Uni t e d F i r e po li cy as a who le
, th e po li cy un am bi gu ou sl y in su res on ly m em be rs of
Ro se Co nc ret e's bo ard of di rect or s, rat he r th an al l em pl oyees who m ay "d ire ct " so m e

as pe ct of
, or an act iv it y at , th e co m pa ny. The refo re, th e pa rti es ' de ba te ov er Ro ck et t's job ti tl e an d wh et he r he "d ire ct ed " Ro se Co nc ret e em pl oyees i s i m

m at eri al be cau se th e pa rti es ag ree th at Ro ck et t was ne ve r a memb e r of Ro se Co nc ret e's bo ard of di rect or s.

Bec au se Ro ck et t was not a m em be r of Ro se Co nc ret e's bo ard of di rect or s, he is no t an in su red un de r th e co m m erci al ge ne ral li ab il it y

in su ran ce p ol ic y

.

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-III.

W e ha ve rev ie wed th e pr ov is io ns in th e in su ran ce po li cy rel at in g to co ve rag e fo r em pl oyees su ch as Ro ck et t. Fi nd in g n o a dd it io na l p ro vi si on th at co ul d pr ov id e

co ve rag e fo r Ro ck et t, we affi rm th e di st ric t co ur t ' s g r a n t o f su m m ary jud gm en t to Uni te d F ire

.

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