St. Paul Fire & v. Charles Lippincott ( 2002 )

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
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No. 01-3200
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St. Paul Fire & Marine Insurance *
Company, *
*
Appellee, *
* Appeal from the United States
v. * District Court for the
* Eastern District of Missouri.
Charles Lippincott, Dr.; Barbara J. *
Lippincott, *
*
Appellants. *
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Submitted: March 13, 2002
Filed: April 19, 2002
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Before MORRIS SHEPPARD ARNOLD, HEANEY, and RILEY, Circuit Judges.
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RILEY, Circuit Judge.
Charles and Barbara Lippincott (the Lippincotts) appeal the district court's1
grant of summary judgment to St. Paul Fire & Marine Insurance Company (St. Paul).
St. Paul brought a declaratory judgment action for a determination that the
1
The Honorable Lawrence O. Davis, United States Magistrate Judge for the
Eastern District of Missouri, sitting by consent of the parties under 28 U.S.C.
§ 636(c).
Lippincotts' claim was not covered under either of two insurance policies issued by
St. Paul. We affirm.
This action is related to a suit Steve and Bonnie Thompson (the Thompsons)
filed against the Lippincotts in the Circuit Court of Greene County, Missouri. The
Thompsons sued the Lippincotts for fraud and recision, alleging the Lippincotts
intentionally and negligently concealed structural damage to a house they sold to the
Thompsons. Before listing the house for sale, the Lippincotts patched a structural
crack with spackling, covered a crack with carpet, and then filled a room with boxes,
making it difficult to discover the cracks. In selling the home to the Thompsons, the
Lippincotts completed a disclosure statement falsely representing that they were not
"aware of any past or present cracks or flaws in the walls or foundations." St. Paul
defended the Lippincotts in the Thompsons' suit, but reserved the right to deny
liability, disclaim indemnity, and withdraw from the defense at any time. The court
in Greene County entered judgment in favor of the Thompsons on the negligent
misrepresentation claim. The court awarded the Thompsons $75,000, consisting of
$47,900 for repairs and $27,100 for diminution of fair market value.
St. Paul brought this declaratory judgment action against the Lippincotts
seeking a judicial determination whether the basic insurance policy and a personal
umbrella policy covered the judgment against the Lippincotts in the underlying suit.
The district court granted St. Paul's summary judgment motion and entered a
declaratory judgment that under the basic insurance policy and the personal umbrella
policy, St. Paul had no liability to the Lippincotts for the Thompsons' judgment.
Summary judgment is proper when there is no genuine issue as to any material
fact and a party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c);
Casteel v. Cont'l Cas. Co., 273 F.3d 1142, 1143 (8th Cir. 2001). In this case,
summary judgment was appropriate as the facts were undisputed and the issue was
purely the interpretation of the contractual terms of the two insurance policies.
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The Lippincotts argue the Thompsons' judgment was covered under the
insurance policies issued by St. Paul. The primary insurance policy covered "legal
liability resulting from an occurrence in which there is actual accidental property
damage." The Lippincotts argue the umbrella policy expanded the definition of
"occurrence" in the primary policy to include "anything that causes property damage,
personal injury or death without your expecting or intending it." They contend that,
under Missouri law, a negligent misrepresentation qualifies as "anything that causes
property damage." The Lippincotts may be correct that a negligent misrepresentation
claim qualifies as an "occurrence." Wood v. Safeco Ins. Co., 980 S.W.2d 43, 52
(Mo. Ct. App. 1998). However, we need not decide that issue because the
Thompsons' judgment was clearly not a recovery for "property damage" under the
policies.
An essential premise of the Lippincotts' position is that the Thompsons'
judgment was an award for "property damage" as defined under the insurance
contracts. The primary insurance policy defined "property damage" as "damage to
someone else's property or its loss or destruction and the loss of its use." The
umbrella policy defined "property damage" as damage to "tangible property or its loss
or destruction" and "the loss of its use."
We must apply the law of Missouri which dictates that such clear and
unambiguous language in an insurance policy should be given its plain meaning.
Killian v. Tharp, 919 S.W.2d 19, 21 (Mo. Ct. App. 1996). The plain meaning of
"property damage" under these policies is a tangible, that is, a physical or material,
loss or destruction of property. We have recently examined the definition of
"property damage" in a similar insurance contract under Missouri law and concluded
"there is no 'property damage' unless and until the [occurrence causes] 'physical injury
to tangible property.'" Esicorp, Inc v. Liberty Mut. Ins. Co., 266 F.3d 859, 862-63 &
n.2 (8th Cir. 2001) (distinguishing Hawkeye-Security Ins. Co. v. Davis, 6 S.W.3d
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419, 426 (Mo. Ct. App. 1999) from Missouri Terrazzo Co. v. Iowa Nat'l Mut. Ins.
Co., 740 F.2d 647, 650-52 (8th Cir. 1984)).
The Lippincotts' negligent misrepresentations did not cause any property
damage to the house. Neither did the Lippincotts' actions to conceal the cracks in the
house cause any property damage to the house. The structural flaws in the house
constitute tangible property damage, but these flaws predate the occurrence of
concealments and misrepresentations by which the Lippincotts incurred liability.
The Thompsons' judgment covered the intangible losses incurred when the
Thompsons relied to their economic detriment upon the Lippincotts'
misrepresentations. These damages are pecuniary in nature and are not property
damage within the meaning of the St. Paul insurance policies. See, e.g., State Farm
Fire & Cas. Co. v. Brewer, 914 F. Supp. 140, 142-43 (S.D. Miss. 1996); Bush v.
Shoemaker-Beal, 987 P.2d 1103, 1104-05 (Kan. Ct. App. 1999); Qualman v.
Bruckmoser, 471 N.W.2d 282, 285 (Wis. Ct. App. 1991).
Accordingly, we affirm the opinion of the district court.
A true copy.
Attest:
CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.
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