## United States Court of Appeals FOR THE EIGHTH CIRCUIT

___________ No. 06-1904

___________ Douglas Wood and Carolyn Wood, *
* Appellants, * * Appeal from the United States v. * District Court for the Eastern * District of Missouri. Foremost Insurance Company, *
* Appellee. *

___________ Submitted: October 19, 2006 Filed: December 28, 2006

___________ Before MELLOY, BENTON, and SHEPHERD, Circuit Judges.

___________ BENTON, Circuit Judge.

A tornado damaged Douglas and Carolyn Wood's roof. They made a claim under their homeowner's policy. The Woods contend that Foremost Insurance Company did not promptly settle. They seek compensation for damage to their property; penalties and attorney's fees under the Vexatious Refusal to Pay Claim statute; damages for injuries suffered by Mr. Wood when he fell from the roof while trying to repair it; and interest. The district court granted summary judgment to Foremost. The Woods appeal.-2- I.
After the tornado on May 6, 2003, the W oods immediately filed a claim. On May 17, a roofing company estimated repairs at $7,753. The Woods say they promptly forwarded the estimate to Foremo st, which it refused. Foremost denies receiving a written estimate until November 4; the Woods claim that they thrice submitted the estimate to Foremost after the initial refusal.

Foremost inspected the Woods' property on May 20, and delivered a check for $2,722 on May 21. The Woods told Foremost that it had not satisfied the policy. On June 17, Foremost paid an additional $1,267. With th e roof still damaged and snow forecast, on November 23 Mr. Wood was injured when he fell from the roof while laying a tarp. Foremost inspected the r oof on November 24, a nd sent another $3,338. On January 14, 2004, Foremost inspected the home's interior, and two weeks later paid an additional $4,530. After three inspections and four payments over eight months, the Woods' claim was settled (minus depreciation and the deductible).

II.
This court reviews de novo a grant of summary judgment. Wallace v. DTG Operations, Inc. , 442 F.3d 1112, 1117 (8th Cir. 2006). Summary judgment is appropriate when there is no genuine issue as to any material fact and the moving party is entitled to a judgm ent as a matter of law. Fed. R. Civ. P. 56(c) . The evidence is viewed most favorably to the nonmoving party. Hitchcock v. FedEx Ground Package Sys., Inc. , 442 F.3d 1104, 1106 (8th Cir. 2006).

III.
The insurance policy reads, "We [Foremost] will make settlement within 30 days after we receive an acceptable proof of loss from you and the amount of loss is-3- determined as provided in the policy." The policy does not define an "acceptable proof of loss," and thus is ambiguous as to when payment was due. When interpreting an insurance policy, Missouri c ourts follow the principle of contra proferentem , and construe any ambiguity against the insurer. See Krombach v. Mayflower Ins. Co. , 827 S.W.2d 208, 210 (Mo. banc 1992).

Mr. Wood says he submitted an estimate to Foremost on May 20, and three times thereafter. Foremost denies r eceiving a written estimate from the Woods until November 4. For purposes of summary j udgment, this court assumes that Foremost received an estimate from the Woods on Ma y 20. Equally, any ambiguity as to an "acceptable proof of loss" is resolved agains t Foremost. Thus, a reasonable jury could find that Foremost was obligated to settle within 30 days after May 20 – which did not happen. A reasonable jury could fi nd that Foremost breached the policy.

Foremost emphasizes that the Woods ' claim is now settled, with full compensation for all damages (including mold , corrosion, and wa ter damage to the home's interior). This argument ignores th at the Woods also seek damages under the Vexatious Refusal to Pay Claim statut e, sections 375.296 and 375.420 RSMo. If an insurance company refuses to pay a claim "without reasonable cause or excuse," then a jury may award "damages not to exceed twenty percen t of the first fifteen hundred dollars of the loss, and ten percent of the amount of the loss in excess of fifteen hundred dollars . . . ." Section 375.420 RSMo . The statute also allows interest and attorney's fees. Id. Viewing the facts most favorab ly to the Woods, a reasonable jury could find Foremost liable under th e Vexatious Refusal statute. See Dhyne v. State Farm Fire & Cas. Co. , 188 S.W.3d 454, 458-59 (Mo. banc 2006) (upholding a jury verdict imposing liability under this statute after a three-month delay by the insurance company).-4- IV.
Before Foremost made its last two payments, Douglas Wood was injured when he fell from the roof while trying to lay a tarp in anticipation of a snowfall. The Woods seek compensation for his medical b ills, lost income, physical and emotional pain, and for Mrs. Wood's loss of consortium. The policy does not cover personal injury claims.

In Missouri, recovery "by the insured against the insurance company for the policy benefit . . . is limited to that provide d by the law of contract plus, if section 375.420 applies, the enhancements provided by the statute." See Overcast v. Billings Mut. Ins. Co. , 11 S.W.3d 62, 68 (Mo. banc 2000). "[A]n insurance company's denial of coverage itself is actionable only as a br each of contract and, where appropriate, a claim for vexatious refusal to pay." Id. at 69.
The Woods' personal injury claim is limite d by the law of contract in Missouri. Generally, only reasonably foreseeable dama ges are recoverable in a contract case. See Kansas City Bridge Co. v. Kans as City Structural Steel Co. , 317 S.W.2d 370, 381 (Mo. 1958).

According to the Woods, their injuries were reasonably foreseeable when the policy was issued. In addition to claiming that Foremost knew their difficult financial position, the Woods invoke the policy langua ge: "If you have a loss, you must protect your dwelling, other structures or persona l property from any further damage. If you fail to do so, any further damage will not be insured by this po licy." Accompanying Foremost's checks was a warning to "cash this check promptly and use its proceeds to repair your damaged property," or ther e will be no coverage for "any additional damage caused by your failure to repairor for unreasonably delayed repairs."-5- The Woods cite no Missouri authority to support their argument that Mr. Wood's fall was reasonably foreseeable. The most apposite precedent is Bassett v. Federal Kemper Insurance Co. , 565 S.W.2d 823 (Mo. App. 1978). In Bassett , the insurance company vexatiously refused paying a claim by retroactively cancelling the policy. The insured could not pay the re pair shop, which refused to release the damaged car. The insured sued under the Vexatious Refusal statute for, among other things, $11 in replevin costs and $56 in lostwages. The Missouri Court of Appeals rejected recovery for these damages, holding: "The statute, being penal in nature, must be strictly construed . . . The statut ory provision necessarily excludes other consequential or collate ral damages which do not arise under the policy." Id. at 827. By this rule, the Woods may not recover for their personal injuries – which are damages not arising under the policy.

The Woods invoke at length the rule of Hadley v. Baxendale , 156 Eng. Rep. 145, 151 (Ex. 1854):

Where two parties have made a contract which one of them has broken, the damages which the other party ought to receive in respect of such breach of contract should be such as may fairly and reasonably be considered either arising naturally, i.e., according to the usual course of things, from such breach of contract itself, or such as may reasonably be supposed to have been in the contem plation of both parties, at the time they made the contract, as the probable result of the breach of it.
The Missouri Supreme Court says that Hadley excludes "accidental" losses. "Damages for breaches of contract are only those which are incidental to, and directly caused by, the breach, and may reasonably besupposed to have entered into the contemplation of the parties and not speculative profits or accidental or consequential losses, or the loss of a fancied good bargain." Weber Implement Co. v. Acme Harvesting Mach. Co. , 187 S.W. 874, 876 (Mo. 1916) (emphasis added); see also United Iron Works, Inc. v. Tw in City Ice & Creamery Co. , 295 S.W. 109, 113 (Mo.-6- banc 1927) ( Hadley does not cover "speculative profits , or accidental or consequential losses").

Missouri insurance law uses a dictionary definition of "accident": "An event that takes place without one's foresight or expectation; an undesigned, sudden and unexpected event. Hence, often, an undesigned or unforeseen occurrence of an afflictive or unfortunate character; a mishap resulting in injury to a person or damage to a thing; a casualty; as, to die by accident." West v. Jacobs , 790 S.W.2d 475, 477 (Mo. App. 1990); see also Soukop v. Employers' Liab. Assurance Corp., Ltd. , 108 S.W.2d 86, 91 (Mo. banc 1937) (defining "accident" in similar terms); see generally J UDGE A LMON H. M AUS , 30 M ISSOURI P RACTICE : I NSURANCE L AW AND P RACTICE§ 7.16 (1997).

Mr. Wood's fall was an accident. It was not foreseen by the parties when the contract was formed, in light of the Bassett case and Missouri's modified Hadley rule. Under the law of contract in Missouri, th e Woods may not recover for their personal injuries.

V.
The grant of summary judgment is reversed as to the non-personal-injury claims. As to the personal injury claims, summary judgment is affirmed.

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