Court Opinion

ID: 3025399
Source: CourtListenerOpinion
Date Created: 2015-10-13 22:33:38.877326+00
Date Added: 2024-06-11T18:20:30.261240
License: Public Domain

United States Court of Appeals
                          FOR THE EIGHTH CIRCUIT
                           _______________________

                          Nos. 99-2942EM, 99-2943EM
                          ________________________

      _____________                   *
                                      *
      No. 99-2942EM                   *
      _____________                   *
                                      *
Mark Andy, Inc.,                      *
                                      *
            Plaintiff-Appellee,       *
                                      *
      v.                              *
                                      *
Hartford Fire Insurance Company,      *
                                      *
            Defendant-Appellant,      *   On Appeal from the United
                                      *   States District Court
Trumbull Insurance Company            *   for the Eastern District
                                      *   of Missouri.
            Defendant.                *
                                      *
__________________                    *
                                      *
Hartford Fire Insurance Company,      *
                                      *
            Third-Party Plaintiff-    *
            Appellant,                *
                                      *
Trumbull Insurance Company,           *
                                      *
            Third-Party Plaintiff,    *
                                      *
      v.                              *
                                       *
Lockton Insurance Agency of St. Louis, *
Inc.,                                  *
                                       *
             Third-Party Defendant-    *
             Appellee.                 *
                                       *
      _____________                    *
                                       *
      No. 99-2943EM                    *
      _____________                    *
                                       *
Mark Andy, Inc.,                       *
                                       *
             Plaintiff-Appellant,      *
                                       *
      v.                               *
                                       *
Hartford Fire Insurance Company,       *
                                       *
             Defendant-Appellee,       *
                                       *
Trumbull Insurance Company,            *
                                       *
             Defendant.                *
                                  ___________

                          Submitted: April 10, 2000
                              Filed: October 16, 2000
                               ___________

Before RICHARD S. ARNOLD, BEAM, and MORRIS SHEPPARD ARNOLD,
      Circuit Judges.
                           ___________

RICHARD S. ARNOLD, Circuit Judge.

                                     -2-
       This case involves a dispute over insurance coverage for flood loss. The
insurance contract between the insured, Mark Andy, Inc., and the insurer, Hartford Fire
Insurance Co., stated it was for $5 million in flood coverage. On the basis of the jury's
findings of fact in answers to special interrogatories, the District Court reformed the
contract to provide $25 million in coverage, and entered judgment in favor of Mark
Andy on its claim for breach of contract. We hold that the District Court erred in
reforming the contract, and we therefore reverse the judgment of the District Court.

                                           I.

       Mark Andy manufactures commercial printing presses. Its main facility is
located in the Chesterfield Valley area of St. Louis County, Missouri, an area
designated as a flood-risk zone. Mark Andy regularly purchases various types of
insurance, including workers' compensation, general liability, and property insurance.
Its insurance policies expire each March 31. Each year since 1988, Mark Andy had
carried $25 million in flood insurance for the Chesterfield Valley property.

       In 1991, Hartford competed for the Mark Andy 1991-92 account. Because the
Chesterfield Valley facility was a "highly-protected risk," and because Hartford's St.
Louis office did not have underwriting authority for the full $25 million in flood
coverage sought for that facility,1 Hartford requested flood reinsurance from Industrial
Risk Insurers (IRI) and Hartford Specialty Co., an affiliate of Hartford. IRI offered $5
million and Hartford Specialty offered $20 million in reinsurance. Hartford then gave
Mark Andy a quote that included $25 million in flood coverage for the Chesterfield
Valley facility. The premium for the property insurance component of the quote was
$22,400. Hartford did not get the Mark Andy account that year.

      1
          At the time, Chesterfield Valley was designated as a Flood Zone C.

                                          -3-
       In March 1992, Lockton Insurance Agency of St. Louis, Inc., became Mark
Andy's insurance broker.2 Lockton provides a variety of insurance-related services,
including serving as a broker or agent for both insureds and insurance companies.
Hartford was one of the insurance companies for which Lockton served as an agent.3
Lockton did not approach Hartford for a quote for the 1992-93 Mark Andy account.

       In February 1993, Lockton prepared a document for submission to various
insurance companies, listing the types and amounts of coverage that Mark Andy
wanted for the 1993-94 year. This document reflected Mark Andy's continuing desire
for $25 million in flood coverage for the Chesterfield Valley property. Hartford was
one of thirteen insurance companies that Lockton invited to submit a quote on the Mark
Andy 1993-94 account.

       Upon receiving the submission that Lockton had prepared, Hartford assigned
three underwriters in its St. Louis office to work on preparing a quote. Robert Settle
was assigned to respond to the property insurance portion, which included the flood
insurance. As in 1991, Mr. Settle contacted IRI and Hartford Specialty about providing
reinsurance for the flood coverage of the Chesterfield Valley property.4 Mr. Settle

      2
        Mark Andy's president sent a letter to insurance companies that it was dealing
with, stating in part: "This will advise that as of March 5, 1992, The Lockton Insurance
Agency of St. Louis, Inc., is the authorized agent/broker of record for this company in
all matters relating to the above for purposes of negotiating and/or placing insurance
coverages."
      3
       Under a written agency agreement, Lockton was authorized "[t]o solicit
insurance for the classes of business which the Company writes in the agent's territory
and to bind, issue, and deliver policies therefor which the Company may from time to
time authorize to be issued and delivered."
      4
        At this point, Chesterfield Valley was designated as a Flood Zone B, which
indicates a higher risk of flooding than Zone C.

                                          -4-
asked IRI and Hartford Specialty to quote the "full limits" for flood insurance reflected
in the Lockton submission.

        Mr. Settle received a written quote from IRI on March 24, 1993 - the day the
Hartford quote was due to Lockton for the Mark Andy account. The written IRI quote
for flood reinsurance for the Chesterfield facility was for only $5 million. Upon
receiving IRI's quote, Mr. Settle informed Hartford Specialty that he would not require
its assistance and that it did not need to submit a quote. He then incorporated the IRI
quote into the full insurance package he was preparing to give to Lockton
encompassing all the insurance coverages sought by Mark Andy. The total premium
for the package was $335,000; of this, the property-insurance premium was $24,400.

       Mr. Settle hand-delivered Hartford's package to Lockton on the same day. Mr.
Settle's cover letter to Lockton stated as follows:

            We are pleased to offer a quote on this desirable account. We feel
      you will find our quote competitively priced based on the exposures and
      information provided.
            The attached pages provide you with an itemized breakdown of
      coverages and premiums applicable. We feel this clarity will help you in
      your submission with the insured.

       Mr. Settle and two other Hartford representatives orally presented Hartford's
quote to Lockton personnel at an hour-long meeting. There was evidence from which
the jury could have found that no one at the meeting noticed the difference between the
flood coverage Mark Andy had requested, and the coverage that was reflected in the
actual Hartford quote. The focus of the meeting was on the workers' compensation
component of the quote, which was the largest component.

     In addition to the Hartford quote, Lockton received quotes from other insurance
companies to which it had sent its submission. Lockton compiled a summary and

                                          -5-
comparison of different quotes. In making this summary, Lockton used its own
submission document, and not the actual Hartford quote. Thus, Lockton's summary
indicated (wrongly) that the Hartford quote included $25 million in flood coverage for
the Chesterfield Valley property.

       The next day, March 25, 1993, Lockton presented its summary report to Mark
Andy. In deciding which insurance company to use, Mark Andy did not review the
actual Hartford quote, but relied on the Lockton summary. Mark Andy chose to accept
the Hartford quote. It is undisputed that Lockton and Mark Andy believed Mark Andy
was receiving $25 million in flood coverage for the Chesterfield Valley property. On
that same day, Lockton informed Hartford that its quote had been accepted by Mark
Andy.

       Lockton, on behalf of Hartford, then prepared and gave insurance binders to
Mark Andy, effective March 31, 1993. A binder is a preliminary arrangement that
provides temporary protection for the insured until the insurer issues a formal policy.
The binders indicated that the different coverage amounts were specified in an
attachment. Lockton attached its original submission, not the actual Hartford quote, to
the binders. As a result, the binders indicated that the flood coverage was for $25
million. Hartford also received a copy of these binders. Neither Lockton, Mark Andy,
nor Hartford realized there was a difference between the flood coverage in the Hartford
quote and that reflected in the binders. The binders expired on June 30, 1993.
Hartford delivered the actual insurance policy, which provided for $5 million in flood
coverage for the Chesterfield Valley facility, to Lockton on May 7, 1993. On July 23,
1993, Lockton delivered the Hartford policy to Mark Andy.

      On July 31, 1993, the Missouri River flooded the Chesterfield Valley, causing
substantial damage to Mark Andy's facility, as well as interruption of its business.
Hartford and IRI started adjusting the loss, based on flood coverage of $5 million.
Mark Andy made a claim for $25 million. Hartford paid $5 million and denied being

                                          -6-
obligated to pay more, whereupon Mark Andy filed this suit against Hartford in a
Missouri state court, seeking reformation of the insurance contract. Mark Andy also
sought damages for breach of contract, estoppel, and negligence. Hartford removed the
action to the District Court on the basis of diversity jurisdiction, and brought a third-
party complaint against Lockton for indemnification and negligence.5

       The case proceeded to a six-week jury trial. In response to special
interrogatories submitted to the jury pursuant to Federal Rule of Civil Procedure 49(a),
the jury made the following findings:

-- Hartford intended to provide $25 million in flood insurance for the Chesterfield
Valley property when it made its quote to Lockton on Match 24, 1993.

-- Lockton intended that Hartford would provide $25 million in flood insurance for the
Chesterfield Valley property, and Lockton acted as Hartford's agent, when Lockton
(a) made the presentation of its insurance proposal to Mark Andy on March 25, 1993,
(b) issued the property insurance binder, and (c) delivered to Mark Andy the Hartford
property insurance policy.

-- When Lockton presented the insurance proposal to Mark Andy on March 25, 1993,
Lockton represented to Mark Andy, orally or in writing, that Hartford would provide
$25 million in flood insurance for the Chesterfield property; and Mark Andy reasonably
relied upon this representation in not obtaining other flood insurance for a total amount
of $25 million.

      5
        Lockton's errors-and-omissions insurance carrier lent funds to Mark Andy to
compensate for the loss. Mark Andy has no obligation to pay this money back unless
it recovers in the instant lawsuit against Hartford.

                                          -7-
-- When Lockton issued the binders, Lockton thereby represented to Mark Andy that
Hartford would provide $25 million in flood insurance for the Chesterfield property;
and Mark Andy reasonably relied upon this representation in not obtaining other flood
insurance for a total amount of $25 million.

       The jury further found that as a result of the July 1993 flood, Mark Andy
sustained property damage to its Chesterfield Valley premises in the amount of
$23,978,000 and business-interruption damages in the amount of $6,302,000.

       The District Court issued findings of fact, consistent with the jury's, and
conclusions of law and reformed the contract to provide for $25 million in flood
coverage. The District Court eventually entered judgment in Mark Andy's favor for
$20 million (taking into account the $5 million Hartford already paid Mark Andy, and
the business-interruption losses up to the extent of the flood-loss limit as reformed) plus
prejudgment interest. The District Court denied Mark Andy's motion for judgment as
a matter of law, and Mark Andy's request for an additional award to cover the full
amount of business-interruption losses found by the jury. Finally, the District Court
dismissed Hartford's third-party claim against Lockton. Hartford filed the instant
appeal, and Mark Andy cross-appealed.

                                            II.

       Hartford argues that the District Court erred in reforming the contract. Under
Missouri law, reformation of a written agreement is "an extraordinary equitable
remedy that should be granted with great caution and only in clear cases of fraud or
mistake." Secura Ins. Co. v. J. R. Saunders, No. 99-2595, slip op. at 2 (8th Cir.
Sept. 18, 2000). Reformation is appropriate if the parties have entered a definite and
explicit agreement about which both parties had the same understanding, but by mutual
mistake concerning a material provision, the written contract fails to express their
agreement. "Thus the nature of the mistake and whether there was a prior agreement

                                           -8-
are the primary factual issues in determining whether reformation is appropriate."
Kopff v. Economy Radiator Serv., 838 S.W.2d 449, 452 (Mo. App. 1992).

       Hartford first challenges the finding that Lockton was acting as Hartford's agent
when it presented Mark Andy with the competing insurance proposals. Hartford argues
that as a matter of law, Lockton was Mark Andy's agent at this point, and not
Hartford's. Lockton's actions all objectively communicated that Hartford was offering
$25 million of flood coverage. Thus if Lockton represented Hartford, then Mark Andy
and Hartford, through Lockton, had an agreement, with objective manifestations of
intent, for $25 million in flood coverage. The contract could be reformed to conform
to that objective manifestation of intent. But if Lockton acted as Mark Andy's agent
in presenting the proposals, then Hartford could not be bound by Lockton's actions.

       Hartford concedes there might have been a need for some fact-finding.
However, once the basic facts were established, Hartford argues, it was error to allow
the jury to conclude that Lockton was Hartford's agent for purposes of the transaction
at issue. Hartford then argues that once it is established that Lockton was not its agent,
reformation is not possible, because Hartford itself never agreed to, or objectively
communicated an offer for, flood coverage of $25 million.

       Mark Andy responds that Lockton's agency was a question of fact that was
properly submitted to the jury. It argues that the jury's factual finding must be upheld
because it was supported by substantial evidence, and the Court's factual finding on the
same subject must be upheld because it is not clearly erroneous. Finally, Mark Andy
contends that Hartford waived its right to challenge this finding, because it did not
object to the Court's instructions and special interrogatories as required by Federal Rule
of Civil Procedure 51.

                                           -9-
                                           A.

       We agree with Hartford that the Court erred in submitting the question of
Lockton's agency to the jury, and that the Court erred in its legal conclusions based on
that fact-finding. There was a need for some fact-finding. The agency status of a
broker such as Lockton involves questions of fact as to what conduct occurred. The
facts here were that Lockton had agency agreements with both Mark Andy and
Hartford, and that Lockton was searching to fulfill Mark Andy's insurance needs among
several insurance companies. Given these facts, the question of whether Lockton was
Hartford's agent when it presented Hartford's quote to Mark Andy should have been
determined as a matter of law.

        Under Missouri law, when a broker, such as Lockton, acts on behalf of an
insured to shop around for insurance among multiple insurance companies, the broker
is the agent of the insured. See Secura Ins. Co., slip op. at 3; Electro Battery Mfg. Co.
v. Commercial Union Ins. Co., 762 F. Supp. 844, 848 (E.D. Mo. 1991); Lampkin v.
Kelly, 771 S.W.2d 953, 954 (Mo. App. 1989). Any mistakes made by the broker are
attributable to its principal, the insured, and not to the insurance company. This is true
even when there is an agency agreement between the broker and a particular insurance
company. Electro Battery Mfg. Co., 762 F. Supp. at 849. The fact that Lockton was
permitted to issue binders for Hartford does not necessarily render Lockton Hartford's
agent as opposed to Mark Andy's. See Secura Ins. Co., slip op. at 5. Furthermore, the
fact that Lockton previously obtained coverage for the property in question through a
different insurer weighs against concluding that it was Hartford's agent on the Mark
Andy account. See id.

      There are special circumstances that allow a broker to be an agent for both the
insured and the insurer when the broker is procuring insurance. If a broker is acting
under a directive from the insured to obtain insurance from a particular insurance
company, then the broker can be considered an agent for the insurance company.

                                          -10-
Schimmel Fur Co. v. American Indem. Co., 440 S.W.2d 932, 938 (Mo. 1969). This
exception does not help Mark Andy. Lockton sought and received bids from multiple
insurers, and aided Mark Andy in weighing them to select the best possible bid.

        Therefore, the contract could not have been reformed on the basis of any
objective manifestation of intent by Lockton, because Lockton was Mark Andy's agent
at the time the contract was formed. Mark Andy's argument that Hartford waived this
argument by not objecting to the special interrogatories and instructions at trial does not
trouble us. Hartford did move for judgment as a matter of law, raising a sufficiency-of-
the-proof claim. This was adequate to preserve this issue for appeal.

                                            B.

       The only other basis for reformation would be an objective manifestation of
intent on Hartford's part, through its own employees, to offer $25 million in flood
coverage for the property in question. Without an objective manifestation of intent at
the time the contract was formed, it cannot be said that the parties had a definite and
explicit agreement for $25 million in flood insurance. See Continental Ins. Co. v.
Cotten, 427 F.2d 48, 53 (9th Cir. 1970) ("Without an objective manifestation of mutual
intent . . . there is no mutual agreement that a reformation could express.")

      The jury found that when Hartford gave its insurance quote to Lockton, Hartford
intended to provide $25 million in flood insurance. We interpret this finding to mean
that Hartford subjectively intended to provide $25 million in flood coverage. This
finding is supported by the record. Mr. Settle, the Hartford underwriter, told IRI to
quote him the "full limits" for the property insurance. Settle's communication with
Hartford Specialty indicates that he believed (wrongly) that he had received the "full
limits" from IRI.

                                           -11-
       However, Mr. Settle's subjective intent is legally irrelevant. The important
inquiry is what Hartford communicated to Lockton (and therefore to Mark Andy), not
what Mr. Settle thought. In our opinion, the evidence does not support a finding that
Hartford objectively manifested an intent to offer $25 million in flood coverage. The
only written offer ever communicated to Lockton was for $5 million in flood coverage.
Hartford never orally communicated that it was offering $25 million. The policy itself
unambiguously stated that the flood coverage was for $5 million.

       Nevertheless, Mark Andy argues that Hartford objectively manifested an intent
to offer $25 million in several ways. First, the cover letter of Hartford's quote to
Lockton stated, as set forth above, that the quote was "competitively priced based upon
the exposures and information provided." At trial, Mark Andy introduced some
evidence intended to show that the industry custom would have been for Hartford to
explain clearly in its cover letter if its offer differed in any material way from Lockton's
submission. Mark Andy also argues that the actual premium Hartford charged for $5
million is not so different from what Hartford would have charged for $25 million as
to put Mark Andy or Lockton on notice that there was a discrepancy. Finally, Mark
Andy argues that the insurance binders Lockton gave to both Mark Andy and Hartford
provided for $25 million in flood coverage.

       The most persuasive argument in support of the verdict and judgment is based
on Hartford's cover letter to Lockton. Typical of Mark Andy's and Lockton's evidence
of industry custom is the following:

                    Q. "Competitively priced, based on the exposures
              and information provided." Would you explain to the
              members of jury what that language means to someone in
              the insurance business in a relationship between the
              company and a [sic] agent?

                                           -12-
                    A. Yes. It is in a form, a promise that what is being
             quoted, that is to say that the amount of premium being
             asked for is the amount the company wants to provide, in
             this case $25 million in flood coverage at Chesterfield.

                       Exposure means exposure to loss, and that's a
             common term that underwriters and agents use every day.
             . . . It's therefore used to define the amount of insurance, the
             kind of insurance, on what - building or business personal
             property - and where.

Appendix of Mark Andy at 388-89. See also, e.g., Appendix of Lockton at 137, 257.

        In order to sustain the jury verdict, this testimony would have to be read as
indicating that the language of the cover letter, in and of itself, and without regard to
the enclosures, amounted to an objective manifestation of intent on the part of Hartford
to offer $25 million in flood-loss coverage on the Chesterfield Valley location. We
think it important to note that the plaintiff's evidence on this issue does not address the
cover letter as a whole. It is limited to the effect of only one paragraph. Nothing is
said about the next paragraph, which expressly refers to the attached "itemized
breakdown of coverages and premiums applicable." If one looks at this itemized
breakdown, it is impossible to avoid the clear statement that only $5 million of flood
coverage is being offered. And surely any reasonable insurance professional, for
example, Lockton in the present case, would have to look at the attachments, if only
for the purpose of determining what premium was being charged. Here the cover letter
itself cautions the reader to examine the underlying quote, and the quote itself is
unambiguous as to the amount of coverage. The coverage offered was $5 million, not
$25 million. If in fact there is an industry expectation that only one paragraph of the
cover letter would be read, and that an expert offeree could safely ignore the attached
pages in their entirety, this is an expectation that the law is not prepared to recognize
as reasonable. Missouri law imposes an affirmative duty on an insured to examine its

                                           -13-
policy promptly to ensure it contains the terms of coverage desired or agreed upon.
Jenkad Enters., Inc. v. Transportation Ins. Co., 18 S.W.3d 34, 37 (Mo. App. 2000)
(insurance policy could not be reformed on the ground of mutual mistake where insured
did not notice that policy did not include all the coverage applied for).

       We do not believe that the amount of the premium constituted an objective
manifestation of intent on Hartford's part to offer $25 million in flood coverage. As
noted above, in 1991, Hartford quoted property insurance coverage to Mark Andy,
including $25 million in flood coverage, at a premium of $22,400. In the instant case,
the premium quoted for the property insurance was $24,500. Hartford offered evidence
that, had it offered $25 million in flood coverage in 1993, the premium would have
been $10,000 more. Given that the Chesterfield property was classified as a higher risk
property by 1993, we do not believe that the 1993 premium was a clear statement that
Hartford was offering $25 million in flood coverage, at least not a statement clear
enough to justify ignoring the explicit written statement that only $5 million was being
offered.

        Finally, the binders that Lockton issued to Mark Andy and to Hartford that
provided for $25 million in flood coverage are not relevant. The explicit agreement
between Mark Andy and Hartford was reached on March 25, 1993, when Lockton
communicated to Hartford Mark Andy's acceptance of the Hartford quote. The binders
came later. Hartford's failure to notice the error in the binders is not a ground for
contract reformation. When the loss occurred, the binders had expired, and the policy
itself was limited to $5 million.

      In sum, there is no reasonable basis for concluding that Hartford objectively
communicated an offer for $25 million in flood coverage for the Chesterfield Valley
property. The only unambiguous statement of its proposed coverage was the actual
quote, which clearly provided for $5 million in coverage. This is not a true mutual-
mistake case in which contract-reformation is appropriate. Cf. State Farm Mut. Auto.

                                         -14-
Ins. v. McGuire, 905 S.W.2d 150, 153 (Mo. App. 1995) (insured and automobile
insurer agreed that a vehicle would be covered by a policy for Missouri residents with
a vehicle titled in Missouri as was the case; mistake by insurer in issuing a Kansas
policy did not entitle insured to the expanded benefits under the Kansas policy, and
contract was appropriately reformed to reflect actual agreement of the parties); Kopff
v. Economy Radiator Serv., 838 S.W.2d at 449 (reformation of insurance contract was
appropriate to reflect the agreement between the parties where the coverage limits
shown in the policy differed from the agreement due to a clerical error in transposing
two covered properties on the brokerage sheet). For these reasons, the District Court
erred in reforming the contract.

                                          III.

                                          A.

       On cross-appeal, Mark Andy argues that the District Court erred in failing to
award Mark Andy the full amount of its business-interruption damages ($6,302,000)
and in refusing to allow it to conform its pleadings to the evidence at trial that would
support this claim. We believe this argument has merit. At trial, Hartford itself
presented evidence that the recovery of business-interruption losses was not capped by
the property-damage flood-loss limit at the Chesterfield facility. Rather, business-
interruption losses could be claimed under a blanket insurance provision to a limit of
$38,500,000 (Mark Andy's Appendix at 221-22; 250-51; 522, 530b).

        Mark Andy's amended complaint sought the full recovery of business-
interruption losses. Although Mark Andy sought these damages under the flood-loss
provision (which it maintained should be reformed to $25 million), we do not believe
this circumstance defeats its entitlement to these damages. Hartford stresses that the
issue of recovery of business-interruption losses came before the Court in the form of
a motion by Mark Andy to amend its pleadings to conform to the proof. The District

                                         -15-
Court denied this motion, and, as Hartford rightly emphasizes, such a decision is
reviewable only for abuse of discretion. In the instant case, we believe that sustaining
the decision would work a manifest injustice, and that it should be reversed even under
the exacting standard of review that we must apply. Hartford's own witnesses
introduced the subject. Hartford itself conceded that business-interruption losses were
covered by the policy under the general limit of liability, quite apart from the sublimit
on flood losses. In these circumstances, we perceive no unfairness at all to Hartford
in allowing Mark Andy to recover for business-interruption losses. See Fed. R. Civ.
P. 54(c) ("Every final judgment shall grant the relief to which the party in whose favor
it is rendered is entitled, even if the party has not demanded such relief in the party's
pleadings").

                                           B.

       In its cross-appeal, Mark Andy also argues that the District Court erred in not
entering judgment as a matter of law on its estoppel claim. Mark Andy's theory is that
Lockton issued binders on Hartford's behalf for $25 million in flood insurance, and
Mark Andy reasonably relied on these binders. Mark Andy argues that it is the duty
of the insurer to issue a permanent policy in accordance with the terms of the binders.
This claim fails. Under Missouri law, estoppel is available only to someone who was
actually misled or deceived by the act in question, and estoppel is not available to one
who knew or had the same means of knowledge as the other as to the truth. Missouri
Ins. Guar. Ass'n v. Wal-Mart, 811 S.W.2d 28, 34 (Mo. App. 1991). Mark Andy offers
no evidence that it was actually misled by the binders, or even read them. See Secura
Ins. Co., slip op. at 6 (where the insured never read the insurance application, the
application could not be relied upon to estop one to deny he was the insurance
company's agent). All of Mark Andy's evidence that it was misled relates to the period
when Lockton initially communicated the Hartford offer.

                                          -16-
       Moreover, the binders had expired by the time of the flood, and Mark Andy had
in its possession the actual policy, which stated the flood coverage at $5 million.
Lockton, as Mark Andy's agent, should have reviewed that policy, and communicated
any problems with it to Mark Andy. See Jenkad Enters., Inc., 18 S.W.3d at 3 (given
its modern use, a binder can not be the basis for reforming a final written policy to
conform with the terms of the binder).

                                         IV.

        The District Court erred in reforming the insurance contract to $25 million in
flood coverage. Hartford was obligated to pay $5 million in flood damage to Mark
Andy, which it did. The District Court also erred in not awarding Mark Andy
$6,302,000 in business-interruption damages. Accordingly, the judgment of the District
Court is reversed, and the case is remanded to the District Court with instructions to
enter judgment in favor of Mark Andy, Inc., and against Hartford Fire Insurance Co.
in the amount of $6,302,000 plus prejudgment interest. Lastly, we affirm the dismissal
of Hartford's third-party complaint against Lockton.

      A true copy.

             Attest:

                     CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.

                                        -17-