Federal Insurance Co. v. Great American Insurance Co., No. 16-4045 (8th Cir. 2018)
Annotate this CaseFederal filed suit seeking a declaratory judgment determining the parties obligations and any priority coverage in an underlying wrongful death suit. The Eighth Circuit held that repeatedly shooting, and encouraging others to shoot, a handgun "in the general direction" of a small lake in a residential area of Kansas City, Missouri, which results in a young child's death, qualified as "gross negligence." In this case, the employee of the insured was convicted of reckless killing and his criminal conduct was determined through state court criminal proceedings. The court held that, because the conduct constituted gross negligence under the relevant indemnity clause, defendant Great American was not liable for the loss, and the district court erred in relying on the clause to require Great American to indemnify Federal and Zurich. The court vacated and remanded for further proceedings.
Court Description: Melloy, Author, with Gruender and Shepherd, Circuit Judges] Civil case - Insurance. Plaintiff's insured's employee was guilty of gross negligence when he repeatedly shot, and encouraged others to shoot, a handgun in the general direction of a small lake in a residential area, thereby resulting in a young girl's death; in making that determination, the court could consider the employee's conviction for Reckless Killing because the criminal conduct was finally determined through state court criminal proceedings; because the conduct constituted gross negligence under the relevant indemnity clause, defendant Great American was not liable for the loss, and the district court erred in relying on the clause to require Great American to indemnify Federal and Zurich; with respect to the liability for the settlement amount and the question of the relative priorities of the three insurers, the district court did not resolve the issues, and the court determines that it would be best to remand the matter and have the district court consider these matters in the first instance.
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