# 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 6- 19 00

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Am eri can Rai lc ar In du st rie s, In c.

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

ff - App el la nt

v.

Hart fo rd Ins ur an ce Co m

pa ny of th e Mi dwe st

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

an t - Ap pe ll ee

Sp eci al ty Risk Serv ic es , LLC; Ran dy P. Murp hy

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

an t s

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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 - St . Lou is

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Su bm it te d: Jan ua ry

12 , 20 17
Fil ed : Fe br ua ry

7, 2 01 7

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Befo re WOL LMAN, MURPHY, an d M ELLOY, Cir cu it Ju dg es

.

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MURP HY, Circ ui t J ud ge

.

Geo rg e Ted de r wor ke d at Am eri can Rai lc ar In du st rie s (ARI). He was in jure d

whi le he was on a br eak fro m wor k. Afte r hi s wor ke rs co m pe ns at io n c l a im wasde ni ed

, he fil ed a ci vi l act io n in fed eral co ur t ag ai ns t ARI an d was award ed ov er $1 .5

m il li on in da m ag es . ARI th en fil ed th is in su ran ce cov erag e act io n aga in st Hart fo rd

In su ran ce Co m

pa ny (Hart fo rd ). The di st ric t co ur t gr an te d Hart fo rd su m m ary 1
jud gm en t aft er co nc l u d i n g t h a t th e po li cy di d no t co ve r Ted de r's in juri es an d th at

AR I ' s b r e a c h of th e no ti fic at io n pr ov is io n in th e po li cy al so ba rred co ve rag e. ARI

ap pe al s, an d we a ffi rm

.

I.

Geo rg e Ted de r wor ke d fo r ARI in Ark an sa s. W hi le Te dd er was on a br eak

fro m wor k on Apr il 24

, 20 08

, he was st ru ck by a go lf cart dr iv en by a co wor ke r. The

acci de nt in

jure d Ted de r's lo wer ba ck

. At th e ti m e of th e acci de nt

, ARI carr ie d

wor ke rs co m

pe ns at io n an d em

pl oyers' li ab il it y i n s ur an ce th at ha d be en is su ed by

Hart fo rd

. Part on e of th e po li cy in su red ARI ag ai ns t wor ke rs co m pe ns at io n cl ai m s.
Und er pa rt on e Hart fo rd ag reed to pa y "t he be ne fit s req ui red of [ARI] by th e wor ke rs

co m pe ns at io n la w." Part two of th e po li cy in su red ARI ag ai ns t bo di l y i n ju r y th at

aro se "o ut of an d in th e co ur se of th e in jure d em pl oyee's em

pl oym en t." Part two al so

st at ed th at "[t ]here will be no rig ht of act io n aga in st [Hart fo rd ] un de r th is in su ran ce

un le ss : 1. [ARI ha s] co m pl ie d wit h al l th e te rm s of t h is po li cy ." Part fo ur req ui red

ARI to "[p ]rom

pt ly gi ve [Hart fo rd ] al l no ti ces , de m an ds

, an d leg al pa pe rs rel at ed to

th e in jury, cl ai m , pro ceed in g o r su it ."

Ted de r fil ed a wor ke rs co m pe ns at i o n c l a i m on Ju ne 6, 20 08

. ARI pr om pt ly

no ti fie d Hart fo rd of Ted de r's in jury an d hi s wor ke rs co m pe ns at io n cl ai m

. The cl ai m

was refe rred to Geo rg ia Diem er at Sp eci al ty Ri sk Serv ic es (SRS ). SRS was a di vi si on

of Hart fo rd at th e ti m e of Ted de r's in jury. Diem er hi r ed an at to rn ey to de fen d

Ted de r's cl ai m ag ai ns t ARI. Thro ug ho ut th e wor ke rs co m pe n s a t i o n pr oc eed in gs ,

The Hon or ab le Ch arl es A. Sh aw, 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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-Ted de r's att or ne y to ld Diem er t ha t h e b el ie ve d t ha t Ted de r's work ers co m pe ns at io n
cl ai m wou ld no t pr ev ai l be cau se Ted de r ha d be en on br eak at th e ti m e of th e acci de nt

. Ted de r's at t o rn ey in di cat ed th at he was ne ve rth le ss req ui red to pu rs ue th e wor ke rs

co m pe ns at io n cl ai m in or de r to ex ha us t T ed de r' s ad m ini str at ive rem ed ie s be fo re fil in g

a ci vi l to rt act io n. An ad m in is tra ti ve la w jud ge (ALJ) de te rm in ed th at Ted de r's cl ai m

was no t co m

pe ns ab le un de r th e Ar

ka nsas W or ke rs ' Co m

pe ns at io n Act be cau se he ha d

n o t b een pe rfo rm in g em pl oym en t se rv ic es at th e ti m e of th e acci de nt

. The f u l l

Ark an sa s Work ers ' Co m

pe ns at io n C om m is si on affi rm ed th e ALJ's de ci si on

.

On Sep te m

be r 2, 20 09

, Ted de r fil ed a to rt act io n in fed eral di st ric t co ur t ag ai ns t

ARI. ARI d id no t p ro m

pt ly forward th is co m

pl ai nt to Hart fo rd

. On Sep te m be r 21

, ARI's co un se l in th e to rt act io n se nt a le tt er to Hart fo rd 's la wy er in th e w o r ke rs

co m pe ns at io n act io n as ki ng hi m fo r co pi es of an y rel ev an t di sc ov ery. Att ach ed to th e
le tt er was th e an swe r ARI ha d fil ed in th e to rt act io n. An ARI em pl oyee te st ifi ed at

hi s de po si ti on th at he th ou gh t he ha d no ti fie d Diem er in ap pr ox im at el y Octo be r 20 09

th at

, " he y , th is ha s go ne ci vi l." Tha t em pl oyee co ul d ho wev er no t "re cal l wit h

cert a i n t y" if th is ha pp en ed an d st at ed th at it was "jus t a co nv ers at io n. It was n't to

rep o r t it

. . . ." A jury award ed Ted de r $2 ,28 4,8 8.2 0 in 20 12

, bu t th e di st ric t co ur t

la te r red uc ed th e award to $1 ,54 7,3 88 .20

. W e affi rm ed

. See Ted de r v. Am

. Rai lc ar

In du s., In c., 73 9 F .3d 11 04 (8t h C ir. 2 01 4)

.

ARI fil ed th e pr es en t in su ran ce co ve rag e act io n ag ai ns t Hart fo rd in 20 13

. ARI

cl ai m ed th at Hart fo rd ha d br each ed pa rt two of th e in su ran ce po li cy by refu si ng to

co ve r it s lo ss es res ul ti ng fro m th e Te dd er ci vi l act io n. The di st ric t co ur t gr an te d

Hart fo rd su m

m ary jud gm en t aft er co nc lu di ng th at pa rt two of th e po li cy di d no t co ve r
Ted de r's in

juri es be cau se he ha d be en on a br ea k w h e n t he in jury oc cu rred

. It

ad di ti on al ly co nc lu de d th at ARI ha d fai le d to no ti fy Hart fo rd of th e ci vi l act io n an d

th at th is br each of th e po li cy ob vi at ed Hart fo rd 's co ve rag e ob li ga ti on s. ARI ap pe al s.

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-II.

AR I a r gu es th at th e di st ric t co ur t erre d by co nc lu di ng th at it br each ed th e

in su ran ce po li cy by no t pr om pt ly no ti fy in g H a r t f

o rd of Ted de r's ci vi l act io n. W e

rev ie w a di st ric t co ur t's "g ran t of su m m ary jud gm en t de no vo an d co ns id er th e fact s

in th e li gh t m os t fa vo rab le to th e no nm ov in g par ty." Nich ol s v. Tri- Nat'l Log is ti cs , In c., 80 9 F.3 d 98 1, 98 5 (8 th Ci r. 20 16 ). A di st ric t co ur t's gr an t of "[s ]um m ary jud gm en t is on ly ap pr op ria te whe n 'th ere is no ge nu in e di sp ut e as to an y m at eri al fact

an d th e m ov in g pa rty is en ti tl ed to jud gm en t as a m at te r of la w.'" Id

. (q uo ti ng Pi ns on

v. 45 Dev

., LLC, 75 8 F.3 d 94 8, 95 1– 52 ( 8 t h C i r

. 2 0 14 )). W e rev ie w de no vo

qu es ti on s of co nt ract in te rp ret at io n. And ers on v. Hes s Co rp ., 64 9 F.3 d 89 1, 89 6 (8 th

Ci r. 20 11 ).

It is un di sp ut ed th at Ark an sa s la w go ve rn s th is act io n. If an in su ran ce po li cy

tre at s th e gi vi ng of no ti ce of a la wsu it as a co nd it i on pr eced en t to reco ve ry , "t he

in su red m us t st ric tl y co m

pl y wit h th e no ti ce requ ire m en t, or risk fo rfei ti ng th e rig ht

to reco ve r fro m th e in su ran ce co m pa ny." Fi rem an 's Fu nd In s. Co

. v. Care Mg m t.,

In c., 36 1 S.W .3d 80 0, 80 3 (Ark

. 20 10 ). If th e no ti ce req ui rem en t is a co nd it io n

p rece de nt

, th e "i ns ur an ce co m pa ny ne ed no t sh ow th at it was pr ejud ic ed by an y
de la y s in or la ck of no ti fic at io n." Id

. The no ti ce requ ire m en t in th e po li cy he re is a

co nd it io n pr eced en t to reco ve ry be cau se pa rt two pr ov id es th at ARI do es no t ha ve a

cau se of act io n a ga in st Hart fo rd un le ss ARI co m pl ie s wi th all of t he po li cy 's te rm s.

ARI wou ld th eref

or e fo rfei t an y rig ht to reco ve r fro m Har t f o r d i f it di d no t st ric tl y

co m pl y wit h t he po li cy 's n ot ic e req ui rem en t.

Und er pa rt fo ur of th e in su ran ce po li cy , ARI was req ui red to "[p ]rom pt ly gi ve [Hart fo rd ] al l no ti ces , de m an ds

, an d le ga l pa pe rs rel at ed to th e in ju r y, c l ai m ,
p r o c e e d in g or su it ." ARI arg ue s th at Ted de r's cl ai m s th ro ug ho ut th e wor ke r s

co m pe ns at io n pr oc eed in g s t h a t he wou ld fil e a ci vi l act io n, ARI's co un se l's
Sep te m be r 21 le tt er to Hart fo rd 's wor ke rs co m pe ns at io n c o u ns el

, an d an ARI

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-em

pl oyee's co nv ers at io n wit h Diem er al l pu t Hart fo rd on no ti ce th at Ted de r ha d fil ed

a ci vi l act io n ag ai ns t ARI. It is un di sp ut ed

, ho wev er, th at ARI di d n o t fo rward to

Hart fo rd al l of th e n o t i c e s , de m an ds , o r le ga l pa pe rs rel at ed to Ted de r's to rt act io n.

It th eref or e di d no t st ric tl y co m

pl y wit h th e po li cy an d fo rfei te d an y rig ht to reco ve r

fro m Hart fo rd

.

ARI al te rn at iv el y arg ue s t h a t i t w as no t req ui red to co m pl y st ric tl y wit h th e

no ti ce pr ov is io n be cau se Hart fo rd ha d rep ud ia te d co ve rag e. In Ark an sa s, an in su rer
is es to pp ed fro m en fo rci ng it s no ti ce pr ov is io n if th e in su red can sh ow th at th e in su rer

ha d un am bi gu ou sl y de ni ed co ve rag e an d th at th e de ni al in du ced th e in su red 's fai lu re

to co m pl y wit h t he no ti ce p ro vi si on . See Kim br el l v . Un io n S ta nd ard Ins . Co., 2 07

F.3 d 53 5, 53 8 (8 th Ci r. 20 00 ); Am

. F i d

. & Cas

. Co

. v. Ne. Ark

. Bu s Lin es , 14 6

S.W .2d 1 65

, 16 5– 67 (Ark

. 19 41 ). ARI arg ue s th at Diem er's no te s an d Hart fo rd 's

wor ke rs co m

pe n s a ti on at to rn ey 's st at em en ts to th e ALJ de ni ed co ve rag e. Diem er's

no te s in di cat e th at sh e ha d to ld Ted de r's wor ke rs co m pe ns at io n at to rn ey th at Hart fo rd

di d no t be li ef th e cl a i m w a s co m pe ns ab le

. Her no te s do no t ho wev er in di cat e th at

Hart fo rd ha d in fo rm ed ARI th at it wou ld de ny co ve rag e un de r pa rt two of th e po li cy

if Ted de r fil ed a to rt act io n. At th e wor ke rs co m pe ns at io n he ari ng th e ALJ as ke d

Ha rt ford 's at to rn ey whe th er it ha d in su red ARI "fo r bo th co m p an d pr em is es li ab il it y ."

Hart fo rd 's at to rn ey res po nd ed

, "No

, You r Hon or ." Si nc e th e po li cy he re on ly in su red

ARI fo r wor ke rs co m

pe ns at io n an d e mp l oyers li ab il it y , th e Hart fo rd at to rn ey 's

res po ns e was accu rat e an d was no t an un am bi gu ou s d en ia l o f co ve rag e.

III.

Fo r th e rea so ns st at ed ab ov e, we affi rm th e jud gm en t o f th e d is tri ct co ur t.

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