KAAPA Ethanol, LLC v. Affiliated FM Ins. Co., No. 10-1929 (8th Cir. 2011)
Annotate this CaseKAAPA managed a facility that distilled corn into ethanol. KAAPA commenced a diversity action after Affiliated denied KAAPA's claim to recover the cost of extensive repairs and business interruption losses. A jury found that some losses were caused by "collapse" of storage tanks, awarded KAAPA property damage, but denied its claim for business interruption losses. Both sides appealed raising various issues. Applying Nebraska law, the court affirmed the district court's denial of Affiliated's motion for judgment as a matter of law. The court held, however, that the district court committed reversible error in instructing the jury on the meaning of the term "collapse" and remanded for a new trial. The court did not decide the loss-mitigation and other post-trial issues raised in KAAPA's cross-appeal.
Court Description: Civil case - Insurance. By failing to object to a portion of the pertinent instruction, Affiliated forfeited its argument on appeal that the policy in question did not provide "collapse coverage;" district court did not err in submitting to the jury the fact-intensive determination of the extent to which collapse, rather than faulty workmanship, was the efficient proximate cause of plaintiff's extensive losses; however, a new trial is required as the district court erred in instructing the jury as to when a collapse had occurred under Nebraska law.
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