# United States Court of Appeals **For the Eighth Circuit**

___________________________ No. 13-1457

___________________________ Robert Young; Ethel Young,
lllllllllllllllllllllPlaintiffs - Appellants ,

v. Allstate Insurance Company,
lllllllllllllllllllllDefendant - Appellee

.

____________ Appeal from United States District Court for the Eastern District of Missouri - St. Louis

____________ Submitted: January 16, 2014 Filed: July 16, 2014

____________ Before LOKEN, MURPHY, and COLLOTON, Circuit Judges.

____________ COLLOTON, Circuit Judge.
Robert and Ethel Young appeal a judgment entere d in favor of Allstate Insurance Company after a jury trial in the di strict court. The Youngs filed this action to recover losses sustained af ter a fire damaged their home. Allstate denied the Youngs’ insurance claim on the ground that th e Youngs misrepresented material facts regarding their losses. The district court granted summary judgment for Allstate, but this court reversed and remanded the case for trial. Young v. Allstate Ins. Co. , 685F.3d 782, 786–87 (8th Cir. 2012). A jury then re turned a verdict in favor of Allstate. The Youngs appeal, arguing that jury instructions given by the district court 1 misstated Missouri law and the elements of the claims and defenses. We affirm.

I.
The Youngs’ home and personal property were insured under a policy issued by Allstate. In January 2008, a fire broke out in th e Youngs’ garage, damaging or destroying many of its contents. As part of the claims process, the Youngs signed and submitted to Allstate an eleven-page inventory of personal property that they said was damaged or destroyed in the fi re. The parties refer to this inventory as a “content list.”
In February 2008, the Youngs became aw are that the content list contained inaccuracies. In mid-February , they told an Allstate re presentative that they wished to remove several items from the list. In March 2008, th e day before the Youngs were to be examined by Allstate under oath, they submitted a revised inventory. At this point, the Youngs informed Allstate for th e first time that their adult daughter had prepared the initial inventory based on her recollection from a time when she had lived with her parents. The Youngs told A llstate that after carefully reviewing the inventory and the debris in their home, th ey discovered that se veral items included on the initial inventory were not actually in the home at the time of the fire.
During a subsequent examination under oath, the Youngs admitted that the initial inventory listed many items that werenot damaged or destroyed in the fire. They gave various explanations for the disc repancies: Mr. Young testified that their son had cleaned the garage s hortly before the fire and re turned several borrowed items to their owners. Mrs. Young testified that a bicycle listed on the initial inventory had

1 The Honorable Henry E. Autrey, United St ates District Judge for the Eastern District of Missouri. -2-been sold in a garage sale . Mrs. Young admitted that th e initial inventory exaggerated the value of several items, but the Youngs both denied that they had intentionally overstated the claim to Allstate.
Allstate denied the Youngs’ claim in April 2008. As grounds for its denial, Allstate stated that the Youngs “concealedand/or misrepresented material facts” regarding the inventory forms and the ow nership, amount, and value of property allegedly damaged or destroyed by the fire.
The Youngs then sued Allstate in st ate court for breach of contract and vexatious refusal to pay on a valid insurance claim. Allstate removed the case to federal court and asserted as an affirmative defense th at the Youngs misrepresented material facts in their claim. Allstate al so counterclaimed, seeking a declaration that there was no coverage under the policy, citi ng a pertinent provisi on of the policy: “We do not cover any loss or occurrence inwhich any insured person has concealed or misrepresented any materi al fact or circumstance.”
The district court granted summary judgm ent for Allstate on the ground that the Youngs, by signing the initial inventory, we re deemed to have knowledge of its contents, and that “no reasonable juror could conclude that [the Youngs] did not materially misrepresent their property clai m.” The Youngs appealed, and this court reversed and remanded for fu rther proceedings. We reas oned that knowledge of the contents of a document that contains fals e information does not necessarily establish an intent to deceive. Young , 685 F.3d at 785. We concl uded that there were genuine issues of fact about whether the Youngs rea lly were ignorant of what was lost in the fire at the time of their interviews with A llstate, or whether they revised the inventory only after realizing that they had been caught making intentional misrepresentations. Id . at 786–87.

-3-After a trial, a jury return ed a verdict in favor of Allstate on the Youngs’ claims and Allstate’s counterclaim. The Youngs appeal, arguing that a key jury instruction was flawed. We review the district court’ s jury instructions for abuse of discretion, applying Missouri law in this diversity case. McCoy v. Augusta Fiberglass Coatings, Inc ., 593 F.3d 737, 744–45 (8th Cir. 2010).

II.
The Youngs’ appeal focuses on jury instru ction number 16. The district court gave the following two jury instructions , numbered 14 and 16, regarding Allstate’s counterclaim and its affirmative defense:

Instruction 14
Your verdict must be for [Alls tate] if you believe the following: That either or both Robert Young or Ethyl Young intentionally concealed or misrepresented any material fact or circumstance relating to the personal property damages sustained in the fire loss.
The term “material” means that it has some bearing on the subject matter.
Instruction 16

Your verdict must be fo r [Allstate] on [Allstate’s ] affirmative defense of fraudulent misrepresentation if you believe: First, either or both Robert or Ethyl Young represented to defendant Allstate that the first content list wa s prepared by either or both of them, intending that [Allstate] rely upon suchrepresentation of the amount and value of the contents damaged by the fire loss, and

-4-Second, the representation was false, and Third, either or both of [the Youngs ] knew of the content list’s falsity or did not know whether the list included false information, and Fourth, the representation was material to [Allstate] in determining the value of the loss, and Fifth, [Allstate] relied on the repres entation in evaluating [the Youngs’] claim and in so relying [Allstate] us ed that degree of care that would have been reasonable in [Allstate’s] situation, and Sixth, and as a direct result of su ch misrepresentation, [Allstate] was prejudiced.
The Youngs most basic objection to Instruction 16 is that the district court should not have given it at all. They c ontend that Instruction 14 accurately stated Missouri law and that Instruction 16 was superfluous.
Giving both instructions was appropriatebecause each instruction addressed a different aspect of the case. Instruc tion 14 advised the jury about Allstate’s counterclaim—that the Youngs violated a policy condition by intentionally concealing or misrepresenting a fact or circum stance in connection with the fire. See Mo. Approved Jury Inst. (MAI) 32.24; Am. Family Mut. Ins. v. Coke , 413 S.W.3d 362, 374 (Mo. Ct. App. 2013). This instruction wa s based on the policy language and broadly covered any material misrep resentation “relating to th e personal property damages sustained in the fire loss.” Instruction 16, by contrast, addressed A llstate’s affirmative defense to the Youngs’ claims that Allstate breached the contract and vexatiously refused to pay on a claim. See MAI 23.05. This latter instruction was focused specifically on the alleged misrepresentations in the content list. 2

2 Although each instruction was based on a Missouri Approved Instruction, Allstate evidently pleaded as a counter claim that which MA I 32.24 treats as an -5-“A party is entitled to a jury instruc tion on its theory of the case if the instruction is both legally accurateand supported by the evidence.” Safety Nat’l Cas. Corp

. v. Austin Resolutions, Inc ., 639 F.3d 498, 501 (8th Cir. 2011) (internal quotation omitted) (applying Missouri law). The evid ence supported both theories of defense. Therefore, the district court did not err in treating Allstate’s counterclaim and Allstate’s defense to the Youngs’ affirmative claims as separate matters to be covered by different jury instructions. Insofar as the instructions were duplicative, there was no prejudice to the Youngs in having the same issue submitted twice.
As to the wording of Instruction 16, the Youngs assert that the instruction allowed the jury to find for Allstate on its affirm ative defense of fraudulent misrepresentation without making the re quired finding that the Youngs intended to deceive Allstate. To establish that an in sured intended to decei ve an insurer, the insurer must show that the insured (1) kne w the representation was false, or “did not know whether the representation was true or false,” Botanicals on the Park, Inc. v. Microcode Corp. , 7 S.W.3d 465, 469–70 (Mo. Ct. A pp. 1999), and (2) intended that the insurer rely on the representation. See Clark v. Olson , 726 S.W.2d 718, 719 (Mo. 1987).

Instruction 16 included both elements. The first element is covered in the third paragraph, which said the ju ry must find that the Youngs “knew of the content list’s falsity or did not know whether the list included false information.” The second element is addressed in the first paragraph, which aske d whether the Youngs represented that they prepared the initial content list, “intending that [Allstate] rely

affirmative defense, and pleaded as an affirmative defense that which MAI 23.05 treats as a claim for the intentional tort of fraudulent misrepresentation. The Youngs did not object to the instructions on this ba sis, and federal courts are not required to follow the exact wording of a particul ar state’s suggested instructions. Vitale v. Aetna Cas. & Sur. Co. , 814 F.2d 1242, 1250-51 (8th Cir. 1987). -6-upon such representation of the amount and value of the contents damaged by the fire loss.”
The Youngs disagree. Intent that the in surer rely on a representation, they say, is not the same as intent to deceive. Th e Missouri courts have rejected the Youngs’ objection. In Cova v. American Family Mutual Insurance Co. , 880 S.W.2d 928 (Mo. Ct. App. 1994), the court ruled that Missouri Approved Instruction 23.05 (after which Instruction 16 was modeled) “contains the n ecessary elements” to establish “an intent to deceive.” Id . at 930. The Missouri Approved Instruction, like Instruction 16, calls for proof that a representation was made “with the intent that [the other party] rely on such representation,” but does not use the magic words “intent to deceive.” Instruction 16’s requirement that Allstate prove the Youngs were “intending that [Allstate] rely upon” their representations in the content list thus conformed to Missouri law and was sufficient to e licit a verdict on intent to deceive.
The Youngs argue that Cova involved a fraud-in-the-inducement claim, and that it does not govern the instructions in a cas e like this one that involves a fraudulent proof-of-loss claim or defense. The two cl aims do have different elements, but the difference is immaterial to the jury instruction on intent to deceive. A plaintiff alleging fraud in the inducement must show an additional element—reliance on the insured’s representation—that is not require d to establish fraudulent misrepresentation in the proof-of-loss context. See Wood v. Safeco Ins. Co. of Am. , 980 S.W.2d 43, 52–53 & n.12 (Mo. Ct. App. 1998); see also Gen. Cas. Ins. Cos. v. Holst Radiator Co. , 88 F.3d 670, 671–72 (8th Cir. 1996) (applying Missouri law). Both claims, however, require proof that the insured intended to deceive the insurer. See Vitale , 814 F.2d at 1246 n.11, 1250 (applying Missouri law); Cova , 880 S.W.2d at 930. There is no reason why a jury instruction on the element of intent to deceive cannot be worded the same way with respect to both types of claims.

-7-The Youngs also argue that Instruction 16 misstated Missouri law because it did not require a finding that the Youngs were “reckless” in failing to discover the inaccuracies contained in the initial content list. To prove fraudulent misrepresentation, Missouri law requires pr oof that the representing party “knew the statement was untrue or was reckless as to whether the statem ent was true or false.” Ryann Spencer Grp., Inc. v. Assurance Co. of Am. , 275 S.W.3d 284, 290 (Mo. Ct. App. 2008) (emphasis added). But reckle ssness may be shown by establishing that the party made representations “with the consciousness that he was without knowledge as to their truth or falsity, when, in fact, they were false.” Colgan v. Wash. Realty Co. , 879 S.W.2d 686, 689 n.1 (Mo. Ct. App. 1994) (internal quotation omitted). Paragraph three of Instruction 16 required Allstate to show that the Youngs “knew of the content list’s falsity or did not know whether the list included false information ,” i.e. , they were without knowledge as to the list’s truth or falsity. The omission of the word “reckless” from that instruction therefore was not error. See Clark , 726 S.W.2d at 719; Botanicals on the Park , 7 S.W.3d at 469–70; Cova , 880 S.W.2d at 930.

B.
The Youngs’ final argument is that a new trial is warranted because Instruction 16 was confusing and misleading. They c ontend that the term “representation” in Instruction 16 confusingly referred either to (a) the representation that the Youngs prepared the content list, or (b) the repres entation as to the amount and value of the contents damaged by the fire ( i.e. , the items on the content list). The Youngs assert this is reversible error, because if the ju ry believed that “the representation” meant only that the Youngs prepared the content list, then the jury could have found for Allstate without finding a misrepresentati on as to the amount and value of the items lost in the fire.

-8-The Youngs did not object to Instruc tion 16 on this ground. During a colloquy on the jury instructions, the Youngs objected to an earlier version of Instruction 16’s third paragraph on other grounds. The distri ct court adopted th e final language, and the Youngs raised no further objection. Because there was no objection to the precision of the instruction’s reference to “the representation,” the claim of error is forfeited, and we review only for plain error. Fed. R. Civ. P. 51; Christian v. Wagner , 623 F.3d 608, 615 (8th Cir. 2010). To obtain relief, the Youngs must show that an obvious error affected their substantial rights and that the error seriously affected the integrity, fairness, or public reputation of judicial proceedings—a standard that is especially stringent in a civil case. See Csiszer v. Wren , 614 F.3d 866, 871 (8th Cir. 2010).
The jury instruction, while perhaps not pellucid, was not obviously erroneous. A commonsense jury—considering the instructi on as a whole and in the context of the trial—likely understood that the case was about whether the Youngs made false representations in the content list. The fi rst paragraph referred to both a representation about who prepared the content list and a representation about “the amount and value of the contents damaged by the fire.” The second paragraph asked whether “the representation” was false. If there was ambiguity about which representation must be false, the third paragraph likely resolv ed it by asking whether the Youngs knew that the content list was false. The first paragraph al so established that the scienter element applied to the representation about the content list: Alls tate was required to show that the Youngs intended for th e insurance company to rely on the representation about the amount and value of the property lost in the fire. Any imprecision in this instruction is not the sort of egregious error that might warrant relief on plain error review in a civil case.

* * *
The judgment of the district court is affirmed.

______________________________ -9-