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American Family Mutual Insurance Co. v. Mid-American Grain Distributors, LLC

United States District Court, E.D. Missouri, Northern Division

April 17, 2019

AMERICAN FAMILY MUTUAL INSURANCE COMPANY S.I., Plaintiff,
v.
MID-AMERICAN GRAIN DISTRIBUTORS, LLC, LEHENBAUER FARMS, INC., and JOHN AYER, Defendants.

          OPINION, MEMORANDUM AND ORDER

          HENRY EDWARD AUTREY UNITED STATES DISTRICT JUDGE

         This matter is before the Court on Plaintiff's Motion for Summary Judgment [Doc. No. 16]. Defendants oppose the Motion. For the reasons set forth below, the Motion for Summary Judgment will be granted.

         Background

         In February, 2015 Mid-American and Ayer entered into an oral contract with Lehenbauer for the design and construction of a grain storage and distribution facility [Doc. No. 25]. Mid-American and Ayer began work under the contract in or around February 2015. They continued their work under the contract until on or about March 15, 2016 when Lehenbauer terminated the contract with MidAmerican and Ayer. [Doc. No. 17]. Mid-American filed suit against Lehenbauer on July 15, 2016 in the Circuit Court of Marion County, Missouri for breach of the contract and sought damages from Lehenbauer. [Doc. No. 25]. Lehenbauer filed its counterclaim on August 29, 2016, followed by its amended counterclaim on or about September 5, 2018.

         American Family issued a “Business Key Policy” to Mid-American, which included commercial general liability coverage (“CGL”). The policy was in effect from June 14, 2014 to June 14, 2015 and was renewed for the 2015-2016 policy period. The underlying claims of the lawsuit include Breach of Contract, Negligence, and Unjust Enrichment.

         American Family's motion for summary judgment is limited solely to the dispositive issue of whether the counterclaims allege an “occurrence” under the applicable American Family insurance policy.

         Summary Judgment Standard of Review

         The Court may grant a motion for summary judgment if the movant shows that there is no genuine dispute as to any material fact and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). The substantive law determines which facts are critical and which are irrelevant. Only disputes over facts that might affect the outcome will properly preclude summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Summary Judgment is not proper if the evidence is such that a reasonable jury could return a verdict for the nonmoving party. Id.

         A moving party always bears the burden of informing the Court of the basis of its motion. Celotex, 477 U.S. at 323. Once the moving party discharges this burden, the nonmoving party must set forth specific facts demonstrating that there is a dispute as to a genuine issue of material fact, not the mere existence of some alleged factual dispute. Anderson, 477 U.S. at 247. The nonmoving party may not rest upon mere allegations or denials of its pleadings. Id. at 256.

         In passing on a motion for summary judgment, the Court must view the facts in the light most favorable to the nonmoving party, and all justifiable inferences are to be drawn in its favor. Id. at 255. The Court's function is not to weigh the evidence but to determine whether there is a genuine issue for trial. Id. at 249.

         Summary judgment is appropriate when, viewing the facts and inferences in the light most favorable to the nonmoving party, the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine dispute as to any material fact and that the movant is entitled to judgment as a matter of law. In order to survive a motion for summary judgment, “the nonmoving party must ‘substantiate his allegations with sufficient probative evidence [that] would permit a finding in [her] favor based on more than mere speculation, conjecture, or fantasy.'” Barber v. C1 Truck Driver Training, LLC, 656 F.3d 782, 801 (8th Cir. 2011) (quoting Putman v. Unity Health Sys., 348 F.3d 732, 733-34 (8th Cir. 2003)) (internal quotation marks omitted).

         Discussion

         American Family argues that none of the claims in the underlying lawsuit (Breach of Contract, Negligence, and Unjust Enrichment) allege an “occurrence” under the American Family Policy and under applicable law. Defendants MidAmerican and Lehenbauer contend that the design and construction defects caused by Mid-American's services are covered because it is an “occurrence, ” which is a covered event under the insurance policy.

         American Family's policy defines an “occurrence” to mean “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.” [Doc. No. 16]. Under Missouri law, an “accident” is defined as “an event that takes place without one's foresight or expectation; an undesigned, sudden and unexpected event. Hence, often an undesigned and unforeseen occurrence of an afflictive or unfortunate character; a mishap resulting in injury to a person or damage to a ...


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