Opinion ID: 1232463
Heading Depth: 2
Heading Rank: 1

Heading: The amount for damage to the silos themselves:

Text: 00 $1,378,580 B. The amount for damages incurred as a direct result of the collapse, such as clean-up and inspection, but excluding the damage to the silos themselves (as provided in A above) and to other property (as provided in C below): 00 $43,420,00 C. The amount for damages to other property incurred as a direct result of the collapse, such as to out-buildings damaged at the collapse site (excluding the amounts provided in A and B above); 00 $4500,00 D. The amount for increased business expenses: 00 $40,007 E. The amount of lost profits: 00 $0 Based on the jury verdict, the U.S. District Court for the District of Nebraska entered judgment in favor of ARASCO in the federal case in the amount of $1,466,507. The judgment was affirmed on appeal to the U.S. Court of Appeals for the Eighth Circuit. Arabian Agri. Servs. Co. v. Chief Indus., Inc., 309 F.3d 479 (8th Cir. 2002). On November 21, 2002, the parties in this case submitted evidence to the district court on the issue of the amount of damages determined in the federal case which may be covered under the insurance policy Great Northern issued to Chief. A set of 11 stipulated facts was entered. In an order filed April 7, 2003, the court reiterated its conclusion that the Foreign Suits Only Amendment relieved Great Northern of its duty to defend Chief in ARASCO's federal case, but the court concluded that the amendment did not exclude coverage for damages awarded to ARASCO unless that coverage was otherwise excluded under the policy. With regard to coverage, the court determined that the damages of $1,378,580 under subparagraph A of the jury's verdict for damage to the silos themselves were excluded from coverage under the policy exclusion for property damage to the named insured's products arising out of such products or any part of such products. The court rejected Chief's arguments that the named insured's products did not include: (1) component parts manufactured by third parties, which Chief asserted totaled $173,011 of the purchase price paid by ARASCO, and (2) component parts manufactured by Caldwell Manufacturing Co. (Caldwell), a division of Chief, which Chief asserted totaled $297,717 of the purchase price paid by ARASCO. The court noted that the policy defined named insured's products as goods or products manufactured, sold, handled or distributed by the named insured or by others trading under [its] name. The court found that all of the components manufactured by third parties were sold, handled and distributed to ARASCO by Chief or Chief U.K. and that Caldwell's products are Chief's products and damages to products manufactured by either entity should be treated the same under the terms of the policy. In reaching this determination, the court focused on policy language to the effect that the exclusion was for property damage to the named insured's products arising out of such products `or any part of such products' (emphasis supplied by district court) and therefore found that [a]ll of the silos and all of the parts manufactured by [Chief's] Caldwell [d]ivision are the named insured's products for purposes of coverage and concluded that damage to the Caldwell components was not covered under the policy. The court found that the damages which were contained in the jury verdict and listed in subparagraphs B for resulting damages, C for damages to other property, and D for increased business expenses were covered under the policy. The court found that the $43,420 in damages listed in subparagraph B was composed of $7,100 for the cost of inspecting the wreckage and $36,320 for the cost of removing the silo wreckage from the site and that these amounts constituted covered consequential damages related to the property damage to the silos. The court found that the $4,500 in damages listed in subparagraph C was for damage to other property and consisted of damage to an outbuilding which was covered. The court found that the $40,007 in damages listed in subparagraph D for increased business expenses was composed of $29,871 for removing corn stored in the silos from the wreckage site and $10,136 in increased rail contract penalties and that these amounts were covered. The court therefore concluded that Chief should recover the sum of $87,927 and entered judgment against Great Northern and in favor of Chief in that amount. Chief appeals, and Great Northern cross-appeals.