Axis Surplus Insurance Company v. TriStar Companies, LLC, No. 23-1450 (8th Cir. 2024)

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In 2021, a warehouse developed by TriStar Companies, LLC but possessed by Amazon collapsed during a tornado, causing injuries and deaths. Several personal injury and wrongful death lawsuits were filed against TriStar, claiming negligence in the warehouse's construction. TriStar, insured by AXIS Surplus Insurance Company, sought coverage under their policy, but AXIS denied coverage and filed a complaint for a declaratory judgment that it had no duty to defend or indemnify TriStar for the resulting lawsuits. The district court granted AXIS's motion for summary judgment, ruling that the insurance policy did not cover the warehouse due to certain exclusions and limitations.

Upon appeal, the United States Court of Appeals for the Eighth Circuit affirmed the lower court's decision. The Court of Appeals applied Missouri law, giving the insurance policy terms "the meaning which would be attached by an ordinary person of average understanding if purchasing insurance." The court found that the policy's language was clear and unambiguous. It limited coverage to premises owned, rented, or occupied by TriStar per a schedule of locations on file with AXIS. As the warehouse's location was not listed in the schedule, and TriStar did not own, rent, or occupy the warehouse when the incident occurred, the court concluded that the policy did not cover the incident.

The court rejected TriStar's interpretation of the schedule of locations, which would have resulted in coverage extending to an entire city, as untenable and against common sense. Therefore, AXIS had no duty to defend or indemnify TriStar for the lawsuits arising from the warehouse collapse.

Court Description: [Grasz, Author, with Loken and Erickson, Circuit Judges] Civil case - Insurance law. Tristar constructed a warehouse for Amazon which was severely damaged by a tornado, and it was sued for negligent construction. Its insurer sought a declaratory judgment that it was not liable for coverage under the commercial general liability policy it had issued to TriStar. The district court did not err in concluding that there was no coverage because the warehouse was neither explicitly nor implicitly contained within the policy's schedule of covered locations; there is no dispute that TriStar did not own, rent, or occupy the warehouse when it collapsed, and any actions related to the collapse are not covered.

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United States Court of Appeals For the Eighth Circuit ___________________________ No. 23-1450 ___________________________ Axis Surplus Insurance Company Plaintiff - Appellee v. TriStar Companies, LLC Defendant - Appellant ____________ Appeal from United States District Court for the Eastern District of Missouri ____________ Submitted: November 14, 2023 Filed: March 4, 2024 ____________ Before LOKEN, ERICKSON, and GRASZ, Circuit Judges. ____________ GRASZ, Circuit Judge. TriStar Companies, LLC (TriStar), held an insurance policy from AXIS Surplus Insurance Company (AXIS) that provided coverage for bodily injury and property damage liability. In 2021, a warehouse developed by TriStar, but already possessed by Amazon, collapsed during a tornado, causing injuries and deaths. AXIS sought a declaratory judgment that it had neither a duty to defend nor indemnify TriStar for personal injury and wrongful death claims arising from the collapse. The district court1 granted AXIS’s motion for summary judgment and held there was no coverage under the policy. We affirm. I. Background In 2017, TriStar was hired to manage the development and construction of a warehouse in Edwardsville, Illinois (the Warehouse). Around June 2020, Amazon took possession of the Warehouse. And by November 2020, TriStar received its last payment related to the development of the Warehouse. On December 10, 2021, a tornado hit the Warehouse, resulting in several deaths and injuries. Following this tragic incident, several wrongful death and personal injury lawsuits commenced against TriStar, claiming TriStar negligently constructed the Warehouse. TriStar carried a commercial general liability insurance policy (the Policy) with AXIS. The Policy covered bodily injury and property damage liability and stated that AXIS “will have the right and duty to defend the insured against any ‘suit’ seeking those damages.” When TriStar demanded coverage under the Policy, AXIS denied coverage and filed a complaint, seeking a declaration that it had no duty to defend or indemnify TriStar for the underlying actions. TriStar answered and counterclaimed for declaratory judgment in its favor along with a claim for breach of contract. The parties filed competing motions for summary judgment. The district court entered judgment in favor of AXIS, finding AXIS did not have a duty to defend or indemnify TriStar because the Warehouse was not covered by the Policy due to certain limitations and exclusions. Specifically, the district 1 The Honorable Audrey G. Fleissig, United States District Judge for the Eastern District of Missouri. -2- court found, inter alia, that the Schedule of Locations excluded coverage because the Warehouse “is neither explicitly nor implicitly contained within the Schedule of Locations.” TriStar appeals. II. Analysis We review de novo the district court’s grant of summary judgment. Progressive N. Ins. Co. v. McDonough, 608 F.3d 388, 390 (8th Cir. 2010). Summary judgment is appropriate “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). “Interpretation of an insurance policy is a matter of state law.” McDonough, 608 F.3d at 390 (quoting Stan Koch & Sons Trucking, Inc. v. Great W. Cas. Co., 517 F.3d 1032, 1039 (8th Cir. 2008)). Here, we apply Missouri substantive law. We give policy terms “the meaning which would be attached by an ordinary person of average understanding if purchasing insurance.” Westchester Surplus Lines Ins. Co. v. Interstate Underground Warehouse & Storage, Inc., 946 F.3d 1008, 1010 (8th Cir. 2020) (quoting Seeck v. Geico Gen. Ins. Co., 212 S.W.3d 129, 132 (Mo. 2007)). We “evaluate policies as a whole.” Ritchie v. Allied Prop. & Cas. Ins. Co., 307 S.W.3d 132, 135 (Mo. 2009). “If the policy language is clear and unambiguous, it must be construed as written.” Doe Run Res. Corp. v. Am. Guar. & Liab. Ins., 531 S.W.3d 508, 511 (Mo. 2017). An ambiguity only exists “if a phrase is ‘reasonably open to different constructions.’” Id. (quoting Mendenhall v. Prop. & Cas. Ins. Co. of Hartford, 375 S.W.3d 90, 92 (Mo. 2012)). If policy language is ambiguous, “[a]ny ambiguity is resolved in favor of the insured.” Owners Ins. Co. v. Craig, 514 S.W.3d 614, 617 (Mo. 2017). “Under Missouri law, the insured has the burden of proving coverage, and the insurer has the burden of proving that an exclusion applies.” Am. Family Mut. Ins. Co. v. Co Fat Le, 439 F.3d 436, 439 (8th Cir. 2006). -3- As the insured, TriStar has the burden of proving coverage. See id. Here, the Policy’s declarations page states the Policy’s essential terms, including language limiting coverage to “all premises you own, rent, or occupy . . . [p]er schedule of locations on file with carrier.” The Policy further contains a Limitation of Coverage clause stating the Policy only covers an occurrence that takes place in the “coverage territory” shown in the Schedule of Locations. The Schedule of Locations lists eighteen locations, which contain mailing addresses, names of entire streets or highways, and even names of entire cities. For example, Location Number 2 (920 S Main Street, Saint Charles, MO 63301) is a mailing address, while Location Number 12 (St Charles MO, Saint Charles, MO 63301) describes an entire city. None of the listed locations contain the Warehouse’s mailing address. Without the Schedule of Locations’ limiting language, the Policy would reach an absurd result of covering an entire city. Such a reading is untenable. See Brazil v. Auto Owners Ins. Co., 3 F.4th 1040, 1042 (8th Cir. 2021) (quoting Ringstreet Northcrest, Inc. v. Bisanz, 890 S.W.2d 713, 718 (Mo. Ct. App. 1995)) (“A construction which attributes a reasonable meaning to all the provisions of the agreement is preferred to one which leaves some of the provisions without function or sense.”). See also Dibben v. Shelter Ins. Co., 261 S.W.3d 553, 556 (Mo. Ct. App. 2008) (“In interpreting an insurance contract, we must endeavor to give each provision a reasonable meaning and to avoid an interpretation that renders some provisions useless or redundant.”). Like the district court, we interpret the Schedule of Locations to provide coverage for all premises “owned, rented, or occupied” by TriStar either within or at any of the listed locations in the Schedule of Locations. Here, because there is no dispute that TriStar did not own, rent, or occupy the Warehouse when it collapsed, the underlying actions related to the Warehouse incident are not covered by the Policy. -4- III. Conclusion For the foregoing reasons, we affirm the order of the district court. ______________________________ -5-

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