United States Court of Appeals

For the Eighth Circuit

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No. 16-2846

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Hudson Enterprises, Inc., doing business as River Valley Marina

lllllllllllllllllllll Plaintiff - Appellant

v.

Certain Underwriters at Lloyd's London Insurance Companies, Subscribing to

Policy #10NCG01559 and Agreement Numbers NPPI1011456 and NPPI09112456

lllllllllllllllllllll Defendant - Appellee

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Appeal from United States District Court 

for the Eastern District of Arkansas - Little Rock

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 Submitted: April 5, 2017

 Filed: April 28, 2017

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Before GRUENDER, MURPHY, and KELLY, Circuit Judges.

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MURPHY, Circuit Judge.

On the night of April 30, 2011 a storm generated strong winds and left seven

inches of rain in the Little Maumelle River basin. The River Valley Marina lost five

of its docks to the storm. The docks were covered by an insurance policy issued by

Certain Underwriters at Llyod's London Insurance Companies(Underwriters) which

excluded losses "caused directly or indirectly" by flood. Underwriters denied
coverage based on the flood exclusion. The marina then filed this action against

Underwriters, alleging that they breached the policy. The district court granted

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Underwriters summary judgment after concluding that the docks were lost to flood. 

Hudson appeals, and we affirm. 

I.

Ray and Debra Hudson own Hudson Enterprises, which operates the River

Valley Marina. The marina owns eight docks on the north bank of the Little

Maumelle River in Little Rock, Arkansas. The Little Maumelle River runs west to

east until it converges with the Arkansas River. The marina islocated approximately

two miles above the Little Maumelle's confluence with the Arkansas River. 

On the night of April 30, 2011 approximately seven inches of rain fell in the

Little Maumelle watershed. Several area residents testified that the river rose at least

three feet above its normal levels and exceeded its banks in some places. Photos

indicate that there was standing water in the parking lot near one of the marina's

docks the next day. The rain also greatly increased the speed of the river's current. 

In addition to rain, the storm brought with it high winds that tore down tree branches

near the marina. 

The marina lost five of its eight docks to the storm. The three docks that

survived the storm were located upstream from the docks that were swept away. The

marina was covered by an insurance policy issued by Underwriters. After the storm,

the marina contacted Underwriters to obtain compensation for the loss. Its policy

insured the marina against "direct physical loss of or damage to" its eight docks. The

policy contained an exclusion, however, which stated:

The Honorable D.P. Marshall Jr., United States District Judge for the Eastern 1

District of Arkansas.

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We will not pay for loss or damage caused directly or indirectly by any of

the following. Such loss or damage is excluded regardless of any other

cause or event that contributes concurrently or in any sequence to the loss.

These exclusions apply whether or not the loss event resultsin widespread

damage affecting a substantial area, or remains localized - even when

restricted to the insured premises.

. . . .

4. Water - (a) Flood, surface water, waves, tides, tidal waves, overflow of

any body of water, or their spray, all whether driven by wind or not; . . . .

A few days after the storm, Underwriters sent an adjuster to take photographs

of the marina and talk to the Hudsons. Mr. Hudson told the adjuster that the "[t]he

velocity of that water" caused the damage to the docks. Underwriters denied

coverage after finding that the loss was caused by "a flash flood that occurred on the

Little Maumelle River following heavy rains." The Hudsons later came to believe,

however, that a utility pole caused their loss when it fell onto the docks as a result of

the storm's high winds. 

Hudson Enterprises (Hudson) filed this action against Underwriters in state

court. Underwriters removed the case to federal court. During discovery, Hudson

served an interrogatory on Underwriters that stated, "In the course of your

investigation of the facts and circumstances forming the basis for the claim for

benefits tendered by Plaintiff . . . did you obtain any expert opinion relating to your

determination to deny payment of such claim?" Underwriters answered on

November 16, 2015 by stating "discovery is ongoing and [Underwriters] have not yet

made a determination as to whether an expert witness may testify at trial." The

answer then indicated "[i]f Underwriters decide to have a testifying expert,

Underwriters will identify said expert(s)in accordance with the FederalRules ofCivil

Procedure." 

The district court entered a case scheduling order which required Underwriters

to "identify all expert witnesses and produce their opinions by 27 January 2016." 

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Underwriters disclosed their civil engineering expert to Hudson on January 27, 2016. 

The expert concluded that the flash flood was the sole cause of Hudson's loss and

rejected Hudson's utility pole hypothesis. Hudson objected to Underwriters' expert

and asked that his opinions be stricken because the expert had been disclosed too late

and because Underwriters had not supplemented their interrogatory answer after

retaining him. At the hearing on Hudson's motion to strike, counsel for Underwriters

stated that he had first contacted the expert on December 18 and had not received a

draft expert report until the last week ofJanuary. The district court denied the motion

to strike. 

The parties later filed cross motions for summary judgment. The district court

denied Hudson's motion and granted that of Underwriters. The court concluded that

there was no genuine issue of material fact regarding whether or not a flood had

caused the damage to Hudson's docks and that the policy exclusion therefore applied. 

Hudson appeals, arguing that the district court abused its discretion by refusing to

strike the report and opinions of the Underwriters expert and erred by granting their

motion for summary judgment. 

II.

Hudson argues that the district court abused its discretion when it refused to

strike Underwriters' expert report and opinions. We review a district court's

"discovery rulings in a manner both narrow and deferential, and reversal is only

warranted if an erroneous ruling amounted to a gross abuse of discretion." Robinson

v. Potter, 453 F.3d 990, 994–95 (8th Cir. 2006) (internal quotation marks omitted). 

Hudson appears to argue that Underwriters disclosed their expert in an untimely

fashion. A party must disclose expert testimony "at the times and in the sequence that

the court orders." Fed. R. Civ. P. 26(a)(2)(D). Underwriters thus complied with the

Federal Rules of Civil Procedure by disclosing their expert on the last day allowed

by the scheduling order.

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Hudson also argues that the district court should have stricken the expert report

for Underwriters because they did not supplement their interrogatory answers in a

timely fashion after they had secured their expert. A party that has responded to an

interrogatory "must supplement or correct its disclosure or response: (A) in a timely

manner if the party learns that in some material respect the disclosure or response is

incomplete or incorrect." Fed. R. Civ. P. 26(e)(1). Hudson's interrogatory asked

Underwriters if they had obtained "any expert opinion relating to your determination

to deny payment of such claim." In November 2015 Underwriters responded that

"they have not yet made a determination as to whether an expert witness may testify

at trial." Underwriters counsel did not receive draft expert reports until the last week

of January. On January 27, Underwriters disclosed to Hudson the reports and

opinions of their two expert witnesses. Because only a few days had passed at most

between when Underwriters obtained their expert's opinion and disclosed it to

Hudson, we cannot conclude that the district court grossly abused its discretion by

denying Hudson's motion to strike.

III.

Hudson argues that the district court erred by granting Underwriters summary

judgment. We review a district court's "grant of summary judgment de novo and

consider the facts in the light most favorable to the nonmoving party." Nichols v.

Tri-Nat'l Logistics, Inc., 809 F.3d 981, 985 (8th Cir. 2016). A district court's grant

of "[s]ummary judgment is only appropriate when 'there is no genuine dispute as to

any material fact and the moving party is entitled to judgment as a matter of law.'" 

Id. (quoting Pinson v. 45 Dev., LLC, 758 F.3d 948, 951–52 (8th Cir. 2014)). We

review de novo questions of contract interpretation. Anderson v. Hess Corp., 649

F.3d 891, 896 (8th Cir. 2011). It is undisputed that Arkansas law applies to this

diversity action. See Emp'rs Reinsurance Co. v. Mass. Mut. Life Ins. Co., 654 F.3d

782, 789 (8th Cir. 2011).

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Hudson first argues that the term "flood" in the exclusion to the insurance

contract is ambiguous. In Arkansas, "the intent to exclude coverage in an insurance

policy should be expressed in clear and unambiguous language, and an insurance

policy, having been drafted by the insurer without consultation with the insured, is

to be interpreted and construed liberally in favor of the insured and strictly against the

insurer." Nationwide Mut. Ins. Co. v. Worthey, 861 S.W.2d 307, 310 (Ark. 1993). 

If policy language is ambiguous, "and it is fairly susceptible of two or more

interpretations, one favorable to the insured and the other favorable to the insurer, the

one favorable to the insured will be adopted." Id. 

Hudson claims that the term "flood" is ambiguous because it is not defined in

the policy. An undefined term in an insurance policy, however, is not automatically

ambiguous. Essex Ins. Co. v. Holder, 261 S.W.3d 456, 458 (Ark. 2007). Moreover,

the Arkansas Court of Appeals has concluded that an identically worded policy

exclusion is unambiguous. Ebbing v. State Farm Fire & Cas. Co., 1 S.W.3d 459,

461–62 (Ark. Ct. App. 1999). Ebbing defined "flood waters" as "those waters above

the highest line of the ordinary flow of a stream, and generally speaking they have

overflowed a river, stream, or natural water course and have formed a continuous

body with the water flowing in the ordinary channel." Id. at 462 (quoting Ferndale v.

Great Am. Ins. Co., 527 P.2d 939, 940 (Colo. App. 1974)). Although only decisions

from a state's highest court control our interpretation of state law, Hudson has not

provided any reason why Ebbing is not predictive of how the Arkansas Supreme

Court would rule on this issue. See Pinson, 758 F.3d at 952. We therefore conclude

that the term "flood" in this insurance contract is unambiguous and adopt the

definition of "flood" given in Ebbing. 

Hudson next argues that there is a genuine issue of material fact as to whether

the damage to the docks occurred as the result of a flood. Hudson claims that strong

winds were the sole cause of its damages here because they caused a utility pole to

crash into its docks. In support of this claim, Hudson relies on the testimony of

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several area residents that the storm on April 30 and May 1 involved very strong

windsthat knocked down tree limbs. Hudson also submitted evidence that the winds

were gusting at 40 miles per hour during the storm. Hudson finally relies on a

photograph that shows a downed utility pole lying on one of the marina docks.

Underwriters' civil engineering expertrejected Hudson's utility pole hypothesis. 

Its expert concluded that the utility pole had not fallen down as the result of wind

because it would have taken wind gusts of more than 200 miles per hour to knock

down a utility pole of that size. The expert also concluded that even if the wind had

caused the pole to fall, the impact could not have caused the structural damage to the

docks. In light of this expert report, Hudson's submission of lay testimony that the

storm generated strong wind gusts and a photograph of the downed utility pole did

not create a genuine issue of material fact as to whether wind or flood caused the

damage to the docks. 

Hudson alternatively argues that the damage here was not caused by a "flood"

but rather by strong "current within the banks of" the Little Maumelle River. There

is however no genuine issue of material fact that the storm on the night of April 30

caused the waters of the Little Maumelle to rise "above the highest line of the

ordinary flow" of the river. See Ebbing, 1 S.W.3d at 462 (quoting Ferndale, 527

P.2d at 940). Several lay witnesses testified that the storm caused the river to rise at

least three feet above its ordinary flow level. Moreover, both parties agree that the

storm caused the river to overflow its banks and left standing water in a parking lot

near one of the marina's docks. The facts show that the rain event on the night of

April 30 created a flood on the Little Maumelle River. 

There is also no genuine issue of material fact that the force generated from the

flood waters directly or indirectly caused the damage to the marina's docks. The

Underwriters expert opined that at the time of the storm, the river's current would

have exerted at least 75,000 pounds of hydrodynamic force on the docks. The expert

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further stated that 75,000 pounds was "much more than enough force" to cause the

damage to the marina because the cables securing the docks to the riverbank were

only rated for 14,400 pounds of force. Hudson's argument that the damage was the

result of a strong current within the banks of the Little Maumelle River does not

defeat summary judgment because this damage was caused by the strong current in

waters which were "above the highest line of the ordinary flow" of the river. See

Ebbing, 1 S.W.3d at 462 (quoting Ferndale, 527 P.2d at 940). At the very least, the

flood indirectly caused the damage to the marina.

IV.

For the reasons stated above, we affirm the district court.

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