Westchester Surplus Lines Insurance Co. v. Interstate Underground Warehouse & Storage, Inc., No. 18-3448 (8th Cir. 2020)Annotate this Case
After an underground storage facility in a cave that formerly housed a limestone mine experienced a series of dome-outs, the primary insurer sought a declaratory judgment that the operator of the facility's claimed losses were not covered. Four excess insurers also sought declarations of no coverage; the operator of the facility, Interstate, counterclaimed against the insurer, alleging a vexatious refusal to pay claim under Missouri law; and the district court granted summary judgment for the insurers.
The Eighth Circuit affirmed the district court's judgment, holding that the insurers were entitled to the declaratory judgment that no coverage existed under the respective policies. The court applied the meaning that would be attached by an ordinary person of average understanding, and held that the district court properly dismissed Interstate's claims because the rubble zone above the natural ceiling of Interstate's facility was not part of the "building." The court explained that, because the decay that caused the dome-outs in this case occurred within the rubble zone, it follows that the dome-outs were not caused by "building decay" within the meaning of the policy.