Gulf Underwriters Ins. Co. v. Burris, et al., No. 11-1967 (8th Cir. 2012)Annotate this Case
Lowell Burris and his wife commenced a product liability action against Menard, Versa, and Versa's affiliate in Minnesota state court. After Menard removed the action to federal court, which had diversity jurisdiction, Gulf commenced this action seeking a judgment declaring "that the policy issued by Gulf to [the named insureds] does not afford coverage to them or Menard, Inc. for any claim made by [Burris] under the terms of the Gulf Policy." The district court granted Gulf's motion for a summary declaratory judgment on the ground that Versa' dissolution after expiration of the policy meant that the insured "cannot meet its obligations under the SIR" (Self-Insured Retention endorsement), a material breach that terminated Gulf's obligations under the policy. Burris appealed. The court concluded that summary judgment for Gulf was factually unwarranted and the declaratory judgment action was dismissed with prejudice.
Court Description: Civil case - Insurance. District court erred in determining that insured's inability to comply with its self-insurance obligations was a material breach terminating Gulf's obligations under the policy as the express provisions of the policy provide that all terms of the policy apply irrespective of the self-insured obligations; further, the declaratory judgment action brought by Gulf should be dismissed with prejudice as a direct action is the preferred procedure to determine insurance coverage under Wisconsin law.