Court of Appeals of Missouri, Eastern District, Third Division
from the Circuit Court of St. Louis County 10SL-CC01716
Honorable Thomas J. Prebil
M. Dowd, Judge
an insurance coverage case. St. Paul Fire and Marine
Insurance Company ("St. Paul") appeals the trial
court's judgment which found that St. Paul has the duty
to defend the Doe Run Resources Corporation ("Doe
Run") in the toxic-tort lawsuits that underlie this
litigation, and which ordered St. Paul to reimburse Doe Run
for its defense costs and to pay prejudgment interest on
those damages. St. Paul contends that the trial court erred
(1) because the "pollution exclusion" in Doe
Run's Commercial General Liability policy ("CGL
policy") bars coverage for the bodily injuries alleged
in the underlying lawsuits; (2) because under the
circumstances Doe Run's CGL policy constitutes
"excess insurance" and another insurer has the duty
to defend Doe Run; (3) because even if St. Paul had the duty
to defend, St. Paul still should not be obligated to
reimburse Doe Run for its defense costs incurred prior to
March 16, 2012, since according to St. Paul, Doe Run did not
until then demand coverage in the underlying lawsuits under
the CGL policy; and (4) because the award to Doe Run of
prejudgment interest on the damages awarded was improper,
since the damages were not liquidated until just before the
trial. We affirm the judgment of the trial court as to Points
I and II. However, as to Points III and IV, we reverse and
remand to the trial court for further proceedings consistent
with this opinion.
and Procedural Background
is a Missouri corporation that mines, mills, smelts, and
fabricates lead ore and other metallic ores to produce lead
and lead concentrates, and other metals and metal
concentrates. Although Doe Run has operated primarily in
Missouri since the mid-nineteenth century, this case and the
toxic-tort lawsuits that underlie it concern Doe Run's
mining and other operations at its metallurgical industrial
complex in La Oroya, Peru. The La Oroya complex became the
subject of Missouri toxic-tort litigation in October 2007,
when Doe Run and others were sued in a class action lawsuit
filed on behalf of Peruvian citizens living in the vicinity
of the complex. Like the underlying lawsuits here, the 2007
lawsuit alleged that the plaintiffs suffered bodily harm as a
result of toxic releases from the complex. On August 6, 2008,
however, the 2007 lawsuit was voluntarily dismissed.
next day, Doe Run and others were sued in two of the
underlying lawsuits here- which eventually have come to
number more than 20-filed on behalf of minor plaintiffs
living in the vicinity of the La Oroya complex. Litigation of
these suits is ongoing. Each of the lawsuits presents the
same set of allegations against Doe Run and six of its
officers, including causes of action for negligence, civil
conspiracy, absolute or strict liability, and contribution,
for the harmful release of toxic substances from the La Oroya
April 2010, Doe Run filed this insurance coverage case
against four insurance companies, at the time not including
St. Paul, seeking reimbursement for defense costs that Doe
Run had incurred and has continued to incur in defense of the
underlying ongoing La Oroya complex lawsuits. The insurance
companies sued by Doe Run included National Union Fire
Insurance Company of Pittsburgh, Pennsylvania ("National
Union"), which issued Doe Run a Directors and Officers
("D&O") liability policy, and American
Guarantee & Liability Insurance Company
("AGLIC"), which issued Doe Run a global general
commercial liability policy covering a period earlier than
that of the St. Paul policy. Like St. Paul here, National
Union contended that it was not obligated to reimburse Doe
Run's defense costs because coverage for the underlying
lawsuits is excluded by the pollution exclusion provision in
its policy. The trial court rejected National Union's
argument and found in its judgment entered on November 7,
2011, that National Union had a duty to defend Doe Run, with
whom the insurer eventually settled, making a lumpsum payment
for past defense costs and agreeing to pay a portion of such
costs on an ongoing basis. Doe Run also settled with AGLIC,
which made a lump-sum payment for past defense costs. The
claims against the other two insurers were dismissed.
Paul was added to this case along with AGLIC, in Doe
Run's amended petition for declaratory relief, breach of
contract, and unreasonable refusal to pay, filed on May 17,
2012. Doe Run asserted (1) that St. Paul has the duty to
defend it in the underlying lawsuits; (2) that St. Paul's
breach of its duty to defend Doe Run has resulted in damages
to Doe Run; and (3) that St. Paul has unreasonably and in bad
faith refused to pay the losses for which it insures Doe Run,
and thus must pay an additional amount in damages pursuant to
§ 375.420 sanctioning vexatious refusals to pay.
Following a period of discovery, both parties moved for
Paul's first motion for summary judgment asserted that it
is not obligated to defend Doe Run in the underlying lawsuits
because coverage is excluded by the pollution exclusion in
the CGL policy. Doe Run filed a cross-motion for partial
summary judgment, arguing that St. Paul has a duty to defend
it in the underlying lawsuits because the pollution exclusion
is ambiguous and thus must be construed in favor of coverage
for the insured, and because the "other insurance"
provision in the CGL policy did not exclude coverage. Because
Doe Run's cross-motion addressed both the pollution
exclusion and "other insurance" provisions, St.
Paul filed a second motion for summary judgment addressing
the "other insurance" provision and asserting that
under the terms of the CGL policy, St. Paul has no duty to
defend Doe Run here because in these circumstances the CGL
policy constitutes "excess insurance" and National
Union has the duty to defend Doe Run.
trial court denied St. Paul's motions and granted Doe
Run's, finding that St. Paul has the duty to defend Doe
Run in the underlying lawsuits. Trial on the extent of St.
Paul's obligation to reimburse Doe Run for past defense
costs was scheduled for December 8, 2014. On November 12,
2014, St. Paul filed a motion in limine seeking to preclude
Doe Run from recovering defense costs incurred before it
demanded coverage from St. Paul, which St. Paul alleged Doe
Run failed to do until March 16, 2012.
outset of the trial on damages, the court heard argument on
St. Paul's motion in limine and took it under advisement.
The trial lasted two days, during which the parties presented
evidence in support of their positions on the amount of past
defense costs owed by St. Paul. At the close of Doe Run's
case, St. Paul filed a motion for judgment pursuant to
Missouri Supreme Court Rule 73.01(b), arguing that even if
St. Paul were found to have the duty to defend, St. Paul
still should not be obligated to reimburse Doe Run for its
defense costs incurred prior to March 16, 2012, since
according to St. Paul, Doe Run did not until then demand
coverage in the underlying lawsuits under the CGL policy.
February 18, 2015, the trial court rejected St. Paul's
arguments in the motion in limine and motion for judgment and
ordered that St. Paul reimburse Doe Run for all its
unrecovered fees and costs incurred in defense of the
underlying lawsuits. While the court did find that St.
Paul's refusal to pay was not vexatious and
recalcitrant-and accordingly dismissed that part of the case
with prejudice-pursuant to § 408.020, the court awarded
Doe Run prejudgment interest on all damages from the date
on April 23, 2015, the trial court entered its final judgment
in this case, restating the integral findings of its prior
judgments as to St. Paul's liability and providing the
final calculations of damages owed, including prejudgment
interest. The trial court found St. Paul liable to Doe Run
for a total of $2, 108, 535.44 in damages made up of three
sub-totals: $1, 676, 147.24 in defense costs presented at
trial; $129, 624.11 in additional defense invoices not
presented at trial; and $302, 764.09 in prejudgment interest
on those defense costs. St. Paul now appeals the final
judgment of the trial court as to whether it has a duty to
defend Doe Run, and as to whether it owes any damages in this
case-and if so, how much.
review de novo the trial court's ruling on cross-motions
for summary judgment. Scottsdale Ins. Co. v. Addison Ins.
Co., 448 S.W.3d 818, 826 (Mo.banc2014). Summary judgment
is appropriate if no genuine issues of material fact exist
and the movant is entitled to judgment as a matter of law.
ITT Commercial Fin. Corp. v. Mid-America Marine Supply
Corp., 854 S.W.2d 371, 376 (Mo.banc 1993). We review the
record in the light most favorable to the party against whom
judgment was entered. Id.
the propriety of summary judgment, the interpretation of an
insurance policy is a question of law that we review de novo.
Button v. Am. Fam. Mut. Ins. Co., 454 S.W.3d 319,
321 (Mo.banc 2015). The rules of contract construction apply
to the construction of insurance policies. Naeger v.
Farmers Ins. Co., Inc., 436 S.W.3d 654, 659 (Mo.App.E.D.
2014). Where a policy is open to the reasonable
interpretation that it provides coverage for a particular
loss, we will find that it does so; in construing the terms
of an insurance policy, we apply the meaning an ordinary
person of average understanding would attach if purchasing
the policy and resolve in favor of the insured any
ambiguities about whether there is coverage under the policy.
Button, 454 S.W.3d at 322. An ambiguity exists when
there is duplicity, indistinctness, or uncertainty in the
meaning of the language in the policy. Naeger, 436
S.W.3d at 659 (citing Seeck v. Geico Gen. Ins. Co.,
212 S.W.3d 129, 132 (Mo.banc 2007)). Language is ambiguous if
it is reasonably open to different constructions.
Id. (citing Seeck, 212 S, W.3d at 132).
words and phrases in a policy must be interpreted in the
context of the insurance contract as a whole and should not
be considered in isolation. Id. (citing Long v.
Shelter Ins. Cos., 351 S.W.3d 692, 696 (Mo.App.W.D.
2011)). As part of the insurance contract we consider not
only the form policy, but also any summaries or declarations,
definitions, or endorsements. See Christensen v. Farmers
Ins. Co. Inc., 307 S.W.3d 654, 658 (Mo.App.E.D. 2010).
clauses are strictly construed against the drafter, who also
bears the burden of showing the exclusion applies.
Id. (citing Burns v. Smith,303 S.W.3d 505,
509-10 (Mo.banc 2010)). This rule, often referred to as the
doctrine of contra proferentem, is applied
"more rigorously in insurance contracts than in other
contracts" in Missouri. Burns, 303 S.W.3d at
509-510 (citing Mansion ...