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McKee v. Federated Mutual Insurance Co.

United States District Court, W.D. Missouri, Southern Division

January 30, 2018

DON McKEE, JR., et al., Plaintiff,



         Plaintiffs initiated this suit in state court, alleging a single claim for breach of an insurance contract. Defendant Federated Mutual Insurance Company, (“Federated”), removed the case to federal court and then filed a Motion to Dismiss, contending that Plaintiffs' claim is barred by a judgment rendered and decisions made in a prior lawsuit. For the reasons set forth below, Federated's Motion to Dismiss, (Doc. 7), is DENIED.

         I. BACKGROUND

         This case stems, in part, from a fire at Moody Station and Grocery, (“Moody Station”), a convenience store that had been leased to Plaintiffs. Plaintiff operated the store under the name “The Big Store”. Federated issued separate insurance policies to Moody Station and The Big Store.

         A. The Prior Lawsuit

         In November 2011, Federated filed an interpleader action in this Court against both Moody Station and The Big Store;[1] the case was assigned number 11-3457 and was ultimately assigned to the undersigned. The interpleader action was based on Moody Station's insurance policy, (Policy No. 9302108, hereafter “Policy 108”), which provided coverage for the real property. (Case 11-3457, Doc. 1, ¶ 6.)[2] According to Federated's Complaint, The Big Store was not named as insured on Moody Station's policy, but Federated named The Big Store as a defendant in the interpleader action because The Big Store claimed an interest in the real property and therefore an interest in the insurance proceeds. (Case 11-3457, Doc. 1, ¶ 11.) In its Complaint, Federated acknowledged that in light of its prior payments to Moody Station it owed an additional $40, 980.95 under Policy 108, but The Big Store's claim created uncertainty over who should be paid. In addition, Moody Station claimed that Federated was obligated to pay more than the additional $40, 980.95. Thus, Federated's Complaint (1) sought a determination as to who was entitled to the $40, 980.95 Federated admitted that it owed under Policy 108 and (2) disputed Moody Station's claim that Federated owed even more money under Policy 108.

         Federated received permission to deposit $40, 980.95 into the Court's registry. (Case 11-3457, Doc. 23.) On June 7, 2013, the parties entered an agreement that would (1) allow The Big Store to receive $10, 879.39 out of that sum “representing the actual cash value of the contents, ” (2) require The Big Store to “release all legal interests in the subject real estate and any claims arising out of the Lease Contract Agreement entered into for the property, ” and (3) acknowledge that the sum paid to The Big Store would serve as a credit for any amounts Federated owed to Moody Station. (Case 11-3457, Doc. 41-1, p. 2.) Subsequent filings confirm that this was predominately an agreement between The Big Store and Moody Station as to how they would divide the amount Federated admitted to owing under Policy 108, with The Big Store further disclaiming any right to any additional funds that Moody Station established was owed by Federated. (E.g., Case 11-3457, Doc. 42, ¶¶ 5-8.) Also, despite the reference to the “value of the contents, ” the settlement appears intended to resolve any claims The Big Store had based on its purported ownership interest in the property, with Moody Station agreeing to allow The Big Store to have a portion of the money Federated acknowledged it owed to Moody Station in exchange for The Big Store surrendering its claim.

         As the then-existing trial setting approached, Federated filed a motion asking the Court to take judicial notice of certain facts. In that motion it characterized its original payment of interpleaded funds as “represent[ing] the $31, 101.56 [sic] remaining to be paid towards the actual cash value of the building, as well as the $10, 879.39 remaining to be paid for the actual cash value of the contents . . . .” (Case 11-3457, Doc. 55, ¶ 10.) However, Federated's characterization that it originally intended any portion of its payment to compensate The Big Store for the loss of contents in the store was not accurate: (1) Federated started the lawsuit by disputing The Big Store's claim that it was insured under Policy 108 or otherwise entitled to any of the proceeds, (Case 11-3457, Doc. 1, ¶¶ 8, 11-13), (2) Federated did not agree that it was obligated by Policy 108 to pay anything to The Big Store, much less a specified amount, (Case 11-3457, Doc. 41-1), (3) the funds Federated paid were described as the amount Federated agreed was owed to Moody's Station, (No. 11-3457, Doc. 1, ¶ 15; Doc. 15, p. 1; and (4) Federated was at best a nominal party to the agreement between The Big Store and Moody's Station that The Big Store would receive $10, 879.39.

         Nonetheless, based on the agreement, the Court granted Federated's motion to take judicial notice “that of the funds deposited in the Court registry . . . The Big Store is entitled to $10, 879.39 for the actual cash value of the contents and . . . Moody Station is entitled to $30, 101.56 for the actual cash value of the building.” (Case 11-3457, Doc. 81, p. 1.) The Court ordered the Clerk of Court to make these disbursements and dismissed The Big Store. The Court then conducted a bench trial to determine whether Federated owed additional money to Moody Station under Policy 108. The Court's decision, except for the award of attorney fees, was affirmed on appeal. Federated Mut. Ins. Co. v. Moody Station & Grocery, 821 F.3d 973 (2016).

         B. The Current Lawsuit

         As stated earlier, the Big Store brought the current lawsuit in state court, and Federated removed it to federal court based on 28 U.S.C. § 1332. The Big Store's Petition (now Complaint) alleges that it is entitled to payments under its separate policy with Federated, Policy No. 9209598 (hereafter “Policy 598). While the Complaint alleges that The Big Store is entitled to payments for the building and its contents, The Big Store now concedes this was a “clerical error” and its claim under Policy 598 is limited to the lost contents only, and further declares that it intends to amend the Complaint to clarify this point. (Doc. 12, p. 3.)


         Federated contends that The Big Store's claim for compensation under Policy 598 is barred by principles of claim preclusion and issue preclusion. When considering a motion to dismiss under Rule 12(b)(6), the Court “must accept as true all of the complaint's factual allegations and view them in the light most favorable to the Plaintiff[ ].” Stodghill v. Wellston School Dist., 512 F.3d 472, 476 (8th Cir. 2008). “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). A claim is facially plausible if it allows the reasonable inference that the defendant is liable for the conduct alleged. E.g., Horras v. American Capital Strategies, Ltd., 729 F.3d 798, 801 (8th Cir. 2013).

         In making this evaluation, the Court is limited to a review of the Complaint, exhibits attached to the Complaint, and materials necessarily embraced by the Complaint. E.g., Mattes v. ABC Plastics, Inc.,323 F.3d 695, 697 n.4 (8th Cir. 2003). However, a Court may also consider records from other lawsuits, particularly when those proceedings relate to the matter to be resolved. E.g., Levy v. Ohl, 477 F.3d 988, 991 (8th Cir. 2007); see also Stahl v. United States Dep't of Ag.,327 F.3d 697, 700 (8th Cir. 2003). Finally, a case can be dismissed based on an affirmative defense if the materials that can be considered ...

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