NOT RECOMMENDED FOR PUBLICATION

File Name: 21a0475n.06

No. 21-5129

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

JOSHUA DONALD TARTER,

Plaintiff-Appellant,

v.

NAVIGATORS INSURANCE 

COMPANY,

Defendant-Appellee.

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ON APPEAL FROM THE UNITED 

STATES DISTRICT COURT FOR THE 

EASTERN DISTRICT OF KENTUCKY

Before: DAUGHTREY, COLE, and CLAY, Circuit Judges.

MARTHA CRAIG DAUGHTREY, Circuit Judge. Defendant Navigators Insurance 

Company sought to resist paying the costs of defending its insured, plaintiff Joshua Donald Tarter, 

in a 2018 lawsuit filed in the United States District Court for the Eastern District of Kentucky,

C-Ville Fabricating, Inc., et al. v. Joshua Donald Tarter, et al., No. 5:18-cv-00379-KKC (E.D. 

Ky. Mar. 26, 2019). Relying upon what is known as the “insured versus insured exclusion” in its 

Directors and Officers Liability policy, Navigators claimed that it had no duty to defend Joshua1

in what can be described only as a high-stakes family feud. Joshua then sued Navigators, both 

alleging that the company breached its contract with him and seeking a declaration that Navigators 

was obligated to defend and indemnify him in the underlying litigation. The district court, 

1 Given the presence of so many Tarter family members in these connected lawsuits, the first names of Tarters 

will be used to lessen any confusion.
Case No. 21-5129, Tarter v. Navigators Ins. Co.

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exercising its diversity jurisdiction, examined the relevant provisions of the applicable insurance 

policy and concluded that Navigators’ position in the dispute was the sounder one. The district 

court thus granted the company’s motion to dismiss the lawsuit. We agree with the district court’s 

reasoning and affirm.

BACKGROUND

In 1945, members of the Tarter family founded Tarter Gate, a business that made and sold 

wooden gates in central Kentucky. Over the years, the company expanded and diversified by 

manufacturing both farm and ranch equipment. From that relatively humble start, there now “are 

a number of entities under common ownership and control that combine with other entities to carry 

on the family business.” The various Tarter businesses, referred to collectively as the Tarter 

Companies, include C-Ville Fabricating, Inc., d/b/a Tarter Industries; Tarter Management 

Company, Inc.; Tarter Gate Company, LLC, operating under the assumed name of Tarter Farm & 

Ranch Equipment; and Tarter Tube, LLC.

Eventually, ownership of the Tarter Companies was consolidated in the hands of two Tarter 

brothers, David and Donald, and their respective wives, Anna Lou (now Anna Lou Tarter Smith) 

and Joy. David and Anna Lou had two children, LuAnn (now LuAnn Tarter Coffey) and Douglas. 

Donald and Joy had three children, Keith, Joshua, and Nell (now Nell Tarter Duggins). Together, 

Keith, Joshua, and Nell own 50% of the Tarter Companies, and Anna Lou, LuAnn, and Douglas 

own the remaining 50%, with Anna Lou owning the largest individual share at 25%. Anna Lou 

also serves as a director of C-Ville Fabricating and Tarter Management, as well as serving as a 

manager of Tarter Gate and Tarter Tube. Joshua also “had management responsibilities in relation 

to all Tarter Companies.”
Case No. 21-5129, Tarter v. Navigators Ins. Co.

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Any semblance of family cooperation ended, however, when Joshua, together with Thomas 

Gregory and Xiaofeng Chen, formed a Chinese shell company, Hong Kong QMC Industry 

Company, Ltd. According to allegations in a lawsuit that C-Ville Fabricating, Anna Lou, LuAnn, 

and Douglas eventually filed against Joshua, Gregory, and QMC, the shell company was 

responsible not only for selling supplies to the Tarter Companies from China at grossly inflated 

prices, but also for embezzling trade secrets from the Tarter Companies. Specifically, that 

complaint alleged that Joshua “used [his] position[ ] with the Tarter Companies to overcharge the 

Tarter Companies by, at least, $20,000,000 over the term of the scheme from one supplier.”

Facing that lawsuit, Joshua called upon Navigators to defend him. The insurance company 

declined to do so, however, noting that its Directors and Officers Liability policy specifically 

excluded from coverage (including the insurer’s duty to defend):

[A]ny Claim2 made against any Insured . . . by or on behalf of any Insured or any 

security holder of the Company; provided, however, that this exclusion shall not 

apply to any Claim . . . brought by any security holder of the Company, whether 

directly or derivatively, if the security holder bringing such Claim is acting totally 

independently of, and without the solicitation, assistance, active participation or 

intervention of, the Company or any Insured Person[.]

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In large part, Navigators based its decision on the policy’s broad definition of the word “Claim,” 

which, in pertinent part, was defined to mean “a civil . . . proceeding brought against any Insured

seeking monetary or non-monetary relief and commenced by the service of a complaint . . . .” 

Because at least Anna Lou, an insured party, had commenced a civil proceeding against another 

insured party (Joshua) by service of a complaint, Navigators claimed that it had no duty to defend 

Joshua in the lawsuit despite the presence of any uninsured party as an additional plaintiff.

2 Bolded terms in the Directors and Officers Liability policy were defined specifically elsewhere in the 

insurance contract.

3 The first clause of the quoted policy provision is known as the “insured versus insured exclusion,” and the 

proviso is known as the “assistance exception” to that exclusion.
Case No. 21-5129, Tarter v. Navigators Ins. Co.

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Latching on to the fact that one of the named plaintiffs in the C-Ville Fabricating action 

was not an insured party, Joshua asserted that the policy’s “insured versus insured exclusion” was 

not applicable. Instead, he argued that the “allocation provision” was included in the policy to 

cover just such a situation and required Navigators to provide him with a defense to the suit. 

Pursuant to that “allocation provision”:

If a Claim made against any Insured includes both covered and uncovered matters, 

or is made against any Insured and others, the Insureds and the Insurer recognize

that there must be an allocation between Loss and uninsured damages, settlement 

amounts and other liabilities in connection with such Claim. The Insureds and the 

Insurer will use their best efforts to agree upon a fair and proper allocation. If no 

agreement can be reached, the Insurer will advance Costs of Defense based on what 

it believes is a fair and proper allocation until such time as the issue can be resolved.

In addressing the parties’ disagreements, the district court examined cases from other 

jurisdictions that have resolved similar insurance-coverage disputes. The district court found most 

helpful and instructive the opinion of the Eighth Circuit Court of Appeals in Jerry’s Enterprises, 

Inc. v. U.S. Specialty Insurance Co., 845 F.3d 883 (8th Cir. 2017). In Jerry’s Enterprises, the 

court was confronted, as are we, with a lawsuit brought against an insured person by both insured 

and uninsured plaintiffs. Moreover, the policy at issue in Jerry’s Enterprises, like the policy here, 

contained an “insured versus insured exclusion” with an “assistance exception,” as well as an 

allocation clause and a broad definition of the term “claim.” Affirming the district court’s grant 

of summary judgment to the insurance company on Jerry’s Enterprises’ demand for indemnity, the 

Eighth Circuit reasoned:

A claim is not afforded its ordinary meaning under the insurance policy. Rather, 

the policy defines Claim as a civil proceeding commenced by service of a 

complaint, i.e., the entirety of the . . . lawsuit. U.S. Specialty, therefore, need only 

show that the exclusion clause applied to the lawsuit as brought. It has done so. 

We have no room under the language of the exclusion clause to apply the clause to 

some parts of a lawsuit but not others.
Case No. 21-5129, Tarter v. Navigators Ins. Co.

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Id. at 888. Moreover, the Eighth Circuit noted that “the allocation clause does not restore coverage 

for any part of the” lawsuit, and “applying the allocation clause to the . . . claim would render the 

assistance exception superfluous, effectively reading that exception out of the contract.” Id. at 890

(citation omitted).

CONCLUSION

The district court’s grant of Navigators’ motion to dismiss for failure to state a claim in 

this case was based on reasoning identical to that used by the Eighth Circuit in Jerry’s Enterprises. 

In issuing its opinion in this litigation, the district court diligently considered relevant caselaw and 

ably articulated the reasons why judgment should be entered in favor of Navigators. Given the 

relatively unique confluence of factors that led to the filing of this lawsuit, we believe that our 

issuance of a full written opinion would be duplicative and also would serve no useful precedential 

purpose. We thus AFFIRM the judgment of the district court for the reasons set forth in that 

court’s Order and Opinion filed on January 15, 2021. Tarter v. Navigators Ins. Co., No. 5:20-240-

KKC, 2021 WL 149302 (E.D. Ky. Jan. 15, 2021).