Pine Bluff School District v. Ace American Insurance Company ( 2020 )

United States Court of Appeals
For the Eighth Circuit
___________________________
No. 19-2594
___________________________
Pine Bluff School District
Plaintiff - Appellant
v.
Ace American Insurance Company
Defendant - Appellee
Chubb Insurance Company
Defendant
____________
Appeal from United States District Court
for the Eastern District of Arkansas - Pine Bluff
____________
Submitted: September 23, 2020
Filed: December 28, 2020
____________
Before SMITH, Chief Judge, BENTON and KOBES, Circuit Judges.
____________
SMITH, Chief Judge.
The Pine Bluff School District (PBSD) sued ACE American Insurance
Company (ACE),1 seeking a declaratory judgment stating that PBSD’s legal liability
insurance policy provided coverage for a teacher’s retaliatory discharge lawsuit filed
against PBSD and the principal of Pine Bluff High School. PBSD averred that
coverage existed for the underlying lawsuit or, alternatively, ACE waived all
defenses to coverage and was estopped from claiming no coverage. ACE moved for
summary judgment, contending that no coverage existed because PBSD failed to
meet reporting requirements for either of two separate claims-made-and-reported
policies. The district court 2 granted summary judgment in favor of ACE, and PBSD
appeals. We affirm.
I. Background
A. Policies
This dispute involves two identical legal liability policies that ACE issued to
PBSD. On April 2, 2015, ACE issued to PBSD the ACE Scholastic Advantage
Educators Legal Liability Policy No. EON G23670471 003 for the period of April
2, 2015, to February 1, 2016 (“2015 Policy”). On February 1, 2016, ACE issued to
PBSD the ACE Scholastic Advantage Educators Legal Liability Policy No. EON
G23670471 004 for the period of February 1, 2016 to February 1, 2017 (“2016
Policy”).
The Declarations provision of the policies states:
THIS POLICY IS A CLAIMS MADE AND REPORTED
POLICY. EXCEPT AS OTHERWISE PROVIDED HEREIN, THIS
POLICY COVERS ONLY CLAIMS FIRST MADE AGAINST THE
INSUREDS AND REPORTED TO THE INSURER DURING THE
POLICY PERIOD OR EXTENDED REPORTING PERIOD, IF
1
ACE “is an indirect, wholly owned subsidiary of Chubb Limited (NYSE:
CB), a public entity.” Appellee’s Br. at ii.
2
The Honorable Kristine G. Baker, United States District Judge for the Eastern
District of Arkansas.
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APPLICABLE. AMOUNTS INCURRED FOR DAMAGES AND
CLAIMS EXPENSES SHALL BE APPLIED AGAINST THE
RETENTION AMOUNT. PLEASE READ THIS POLICY
CAREFULLY.
Ex. A at 1, Pine Bluff Sch. Dist. v. ACE Am. Ins. Co., No. 5:18-cv-00185-KGB (E.D.
Ark. 2019), ECF No. 13-1 (bold omitted); Ex. B at 1, Pine Bluff Sch. Dist. v. ACE
Am. Ins. Co., No. 5:18-cv-00185-KGB (E.D. Ark. 2019), ECF No. 13-2 at 1 (bold
omitted).
The Insuring Agreement for the policies provides coverage for claims that are
“first made against [PBSD] and reported to [ACE] during the Policy Period.” Ex. A
at 3 (bold omitted); Ex. B at 3 (bold omitted). Both policies define “Claim” to
include:
2. a civil proceeding against any Insured seeking monetary
Damages or non-monetary or injunctive relief, commenced by
the service of a complaint or similar pleading;
. . .
4. a civil, administrative[,] or regulatory proceeding against any
Insured commenced by:
a. the issuance of a notice of charge or formal investigative
order, including without limitation any such proceeding by
or in association with:
i. the Equal Employment Opportunity Commission
[(EEOC)]….
Ex. A at 6; Ex. B at 6.
Both policies contain a “Limits of Liability” section. Ex. A at 22 (all caps
omitted); Ex. B at 22 (all caps omitted). That section contains a subsection entitled
“Limit of Liability,” which provides, in relevant part:
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All Claims arising out of the same Wrongful Act and all Interrelated
Wrongful Acts of the Insureds shall be deemed to be one Claim. Such
Claim shall be deemed to be first made on the date the earliest of such
Claim is first made, regardless of whether such date is before or during
the Policy Period.[3]
Ex. A at 22 (bold omitted); Ex. B at 22 (bold omitted).
The policies define “Wrongful Act” as including “a wrongful Employment
Practice committed or attempted by the Educational Institution or by any Insured
Educator acting solely in their capacity as such and on behalf of the Educational
Institution.” Ex. A at 15 (bold omitted); Ex. B at 15 (bold omitted). “Wrongful
Employment Practice” includes, among other things, “wrongful dismissal, discharge
or termination, whether actual or constructive”; “[d]iscrimination”; “[s]exual
harassment or unlawful workplace harassment”; “wrongful discipline”; and
“[r]etaliation” “of any past, present or prospective full-time, part-time, seasonal and
temporary Employee.” Ex. A at 16 (bold omitted); Ex. B at 16 (bold omitted). The
policies also define “Interrelated Wrongful Acts” as “[a]ll Wrongful Acts that have
as a common nexus any fact, circumstance, situation, event, transaction, cause or
series of related facts, circumstances, situations, events, transactions or causes.” Ex.
A at 11 (bold omitted); Ex. B at 11 (bold omitted).
Under the policies, an insured must “as a condition precedent to their rights
under [the policies], give to the Insurer written notice of any Claim as soon as
practicable, but in no event later than 30 days after … the end of the Policy Period.”
Ex. A at 23 (bold omitted); Ex. B at 23 (bold omitted). Endorsement 4 to the 2015
Policy amends and extends the 30-day grace reporting period to 60 days.
Both policies also contain a provision, stating: “The titles and headings to the
various parts, sections, subsections[,] and endorsements of the Policy are included
3
We will hereinafter refer to this provision as the “single claim provision.”
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solely for ease of reference. They do not in any way limit, expand[,] or otherwise
affect the provisions of such parts, sections, subsections[,] or endorsements.” Ex. A
at 26 (bold omitted); Ex. B at 26 (bold omitted).
B. Underlying Facts
About eight months after ACE issued the 2015 Policy to PBSD, Celeste
Alexander, a teacher at Pine Bluff High School during the 2014–2015 school year,
filed a charge of discrimination on December 1, 2015, with the Equal Employment
Opportunity Commission (“EEOC charge”). Alexander’s EEOC charge alleged that
PBSD retaliated against her for alleging that her supervisor—the high school
principal—had sexually harassed her. Alexander’s EEOC charge specifically
alleged:
I was hired September 19, 2014, as a Math Lab Coordinator/Math
Teacher. I was identified for RIF in April 2015. I filed a sexual
harassment complaint against my Principal in June 2015. I was not
hired for the next school year and my employer hired uncertified and
lesser-qualified math teachers in August 2015. I was told that I would
never be rehired for making false allegations. I believe I was not rehired
in retaliation for filing sexual harassment allegations in violation of
Title VII of the Civil Rights Act of 1964, as amended.
Resp. to Statement of Undisputed Facts, Pine Bluff Sch. Dist. v. ACE Am. Ins. Co.,
No. 5:18-cv-00185-KGB (E.D. Ark. 2019), ECF No. 25 at 9–10.
PBSD received the EEOC Charge, responded to it, and provided documents
to the EEOC.
The following seven dates are crucial to the appeal: (1) on January 21, 2016,
PBSD submitted a Mediation Statement to the EEOC; (2) on January 28, 2016,
PBSD submitted a Position Statement to the EEOC; (3) on January 29, 2016, in
response to the EEOC’s inquiries and document requests, PBSD submitted written
responses and documents; (4) on February 1, 2016, the 2015 Policy expired, and that
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same day, ACE issued the 2016 Policy; (5) on April 1, 2016, the 60-day grace period
for PBSD to report claims under the 2015 Policy expired; (6) on June 24, 2016, the
EEOC issued a right-to-sue letter to Alexander, which gave her 90 days from the
receipt of the letter to file suit; and (7) on September 22, 2016, Alexander filed suit
against PBSD and the principal.
Alexander’s federal complaint alleged that her supervisor—the high school
principal—began sexually harassing her around November 2014. She alleged that
after she rejected his advances, the principal retaliated against her by improperly
scrutinizing her work; ignoring her e-mails; calling her to meetings without others
present; and falsely accusing her of unprofessional conduct. According to
Alexander, she received notification in April 2015 that she was one of several
teachers terminated in a reduction of force (ROF). She alleged that she “was not
called back from the ROF or rehired, because of her complaints of sexual
harassment” and that “[o]ther teachers were hired … despite being lesser qualified
than Plaintiff Alexander in violation of Defendant PBSD’s Reduction of Force
Policies.” Compl., Pine Bluff Sch. Dist. v. ACE Am. Ins. Co., No. 5:18-cv-00185-
KGB (E.D. Ark. 2018), ECF No. 2 at 57. She alleged that she reported the sexual
harassment to PBSD on or around June 3, 2015.
On October 3, 2016, PBSD first reported Alexander’s lawsuit to ACE through
its insurance agent. PBSD’s agent submitted to ACE a loss notice and attached a
copy of the lawsuit and an e-mail from PBSD’s counsel. Counsel’s e-mail provided
that “[t]here was a related EEOC claim and investigation by the Arkansas
Department of Education Professional Licensure Standards Board, which dismissed
the allegations. The EEOC issued a right to sue letter on June 24, 2016.” Resp. to
Statement of Undisputed Facts at 12 (alteration in original).
On October 20, 2016, ACE acknowledged receipt of Alexander’s lawsuit and
requested that PBSD provide a copy of Alexander’s EEOC charge and “any
documents relating to the [June 2015] grievance process.” Id. (alteration in original).
Five days later, on October 25, 2016, ACE issued a preliminary coverage letter to
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PBSD and requested that PBSD submit to ACE a “(i) copy of the charge filed by
Alexander with the … EEOC … and (ii) a copy of any written demands, complaints,
grievances, etc. from Alexander received by the Insured prior to the EEOC charge
and lawsuit.” Ex. K at 1–2, Pine Bluff Sch. Dist. v. ACE Am. Ins. Co., No. 5:18-cv-
00185-KGB (E.D. Ark. 2019), ECF No. 13-11 (bold omitted). ACE “reserve[d] the
right to amend and/or deny coverage based upon review of this information.” Id. at
2. In the letter, ACE noted that its “investigation of this matter is continuing”; as a
result, ACE advised PBSD that it
reserves all rights with regard to the above referenced provisions, as
well as all other rights, remedies and defenses under the Policy, at law,
and in equity. These reservations include, but are not limited to, the
right to withdraw the defense provided in this matter and the right to
amend this letter to address additional coverage issues as they may
arise, based upon the Policy and/or any additional facts that may come
to [ACE’s] attention. Nothing contained in this letter, and no action on
our part in investigating these matters, should be construed as an
admission of coverage or as a waiver of any right, remedy, or defense
that may be available to [ACE].
Id. at 3.
ACE repeated its request to PBSD for copies of EEOC filings on November
22, 2017. That same day, PBSD’s counsel sent the EEOC charge to ACE.
After reviewing the EEOC documentation it had requested, ACE issued a
coverage-denial letter to PBSD on February 14, 2018. ACE informed PBSD in the
letter that there was “‘no coverage under the [2015] Policy’ because ACE ‘was first
provided with notice of this matter on October 3, 2016, more than 60 days after the
end of the [2015] Policy.’” Resp. to Statement of Undisputed Facts at 15 (alterations
in original). ACE also notified PBSD that “‘coverage for this matter [was] precluded
in its entirety’ under the 2016 Policy because ‘the Claim in this matter is considered
made … prior to the policy period of February 1, 2016, to February 1, 2017.’” Id.
(second alteration in original).
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In March 2018, PBSD settled Alexander’s lawsuit for $50,000. She also
received a $7,000 payment to her retirement account and reemployment with the
school district as part of the settlement. Alexander was awarded $100,000.00 in
attorneys’ fees and $19,367.37 in costs.
PBSD filed suit against ACE on June 1, 2018, in Arkansas state court. It
sought a declaration of coverage and to recover its legal fees incurred and settlement
monies paid for Alexander’s lawsuit. PBSD asserted in the alternative that ACE
waived all defenses to coverage and that ACE was estopped from claiming no
coverage. ACE removed the case to federal court and moved for summary judgment.
It argued that Alexander’s EEOC charge and subsequent retaliatory discharge
lawsuit constituted a single claim that was “first made” against PBSD during the
2015 Policy period but not reported until after the 2015 grace reporting period
expired. In response, PBSD argued that the policies contain ambiguous language,
which precluded summary judgment in ACE’s favor.
The district court granted summary judgment to ACE. The district court
determined that “the Policy language in the 2015 and 2016 Policies is unambiguous
and that Ms. Alexander’s December 1, 2015, EEOC charge and her subsequent
lawsuit constitute a single claim that was ‘first made’ against PBSD during the 2015
Policy period.” Pine Bluff Sch. Dist. v. ACE Am. Ins. Co., 402 F. Supp. 3d 548, 561
(E.D. Ark. 2019). The court then concluded that ACE was “entitled to summary
judgment as a matter of law for any coverage sought under the 2015 Policy.” Id. at
564. The court made particular note that “PBSD did not report the claim to ACE
until October 3, 2016, six months after the 60-day grace reporting period after the
2015 Policy expired.” Id. The district court also determined that the 2016 Policy did
not provide coverage because “the claim was first made against PBSD on December
1, 2015, before the 2016 Policy took effect.” Id. at 565.
Additionally, the court rejected PBSD’s waiver and estoppel arguments. It
refused to “find under these circumstances that ACE unreasonably delayed its
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coverage determination” and recognized that “Arkansas law does not permit waiver
and estoppel to broaden the scope of coverage afforded by a policy.” Id. at 567. The
district court granted ACE’s motion for summary judgment. PBSD appeals.
II. Discussion
On appeal, PBSD seeks reversal of the district court’s grant of summary
judgment in ACE’s favor on two bases: first, the 2015 Policy and 2016 Policy
include ambiguous language that must be construed in its favor, and second, even if
the policies are unambiguous, the doctrines of waiver and estoppel preclude ACE
from denying coverage.
“We review a grant of summary judgment de novo, viewing the record most
favorably to the nonmoving party and drawing all reasonable inferences for that
party. We also review the district court’s construction of an insurance policy and
interpretation of state law de novo.” Russell v. Liberty Ins. Underwriters, Inc., 950
F.3d 997, 1003 (8th Cir. 2020) (quotations omitted).
A. Coverage
According to PBSD, the policies’ single claim provision is ambiguous.
Specifically, PBSD asserts that the single claim provision is found in the Limits of
Liability section. PBSD argues that the Limits of Liability section where the
language appears “is only made in reference to the ultimate amounts for which ACE
would be liable, not to whether coverage exists under the policy.” Appellant’s Br. at
9. As a result, PBSD submits that the single claim provision “is more logically read
as a type of ‘anti-stacking’ provision.” Id. In support of its argument, PBSD notes
that the single claim provision does not appear in the insuring language or in the
definition of claim. And, it points out that the definition of Interrelated Wrongful
Acts does not include language about a single claim, nor is language found anywhere
in the “Notices” section or “Exclusions” section of the policies.
PBSD argues that limiting the application of the single claim provision to only
a determination of ACE’s liability exposure would mean that it otherwise satisfied
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the definition of claim in the 2016 Policy for coverage purposes. PBSD contends
that coverage exists under the 2016 Policy for Alexander’s retaliatory discharge
lawsuit because it timely notified ACE of the lawsuit on October 3, 2016—during
the 2016 policy period. PBSD’s ambiguity argument is unpersuasive.
“[W]ell settled” Arkansas 4 law “regarding the construction of insurance
contracts” provides that “[t]he language in an insurance policy is to be construed in
its plain, ordinary, and popular sense.” McGrew v. Farm Bureau Mut. Ins. Co. of
Ark., 268 S.W.3d 890, 894–95 (Ark. 2007). “If the language of the policy is
unambiguous, we will give effect to the plain language of the policy without
resorting to the rules of construction.” Id. at 895. On the other hand, if the language
of the policy “is ambiguous, and thus susceptible to more than one reasonable
interpretation, [the court must] construe the policy liberally in favor of the insured
and strictly against the insurer.” Id.“Language is ambiguous if there is doubt or uncertainty as to its meaning and
it is fairly susceptible to more than one reasonable interpretation.” Corn v. Farmers
Ins. Co., 430 S.W.3d 655, 661 (Ark. 2013). The court resolves as a matter of law
whether a policy’s language is ambiguous. Id.; see also Scottsdale Ins. Co. v.
Morrowland Valley Co., LLC, 411 S.W.3d 184, 192 (Ark. 2012) (“Although the
meaning of an ambiguity may become a question for the fact-finder if parol evidence
has been admitted to resolve that ambiguity, where the meaning of the language of
a written contract does not depend on disputed extrinsic evidence, the construction
and legal effect of the contract are questions of law.” (cleaned up)). “The terms of
an insurance contract are not to be rewritten under the rule of strict construction
against the company issuing it so as to bind the insurer to a risk which is plainly
excluded and for which it was not paid.” Corn, 430 S.W.3d at 661.
4
The parties agree that Arkansas law governs our interpretation of the 2015
Policy and 2016 Policy. See Secura Ins. v. Horizon Plumbing, Inc., 670 F.3d 857,
861 (8th Cir. 2012) (“State law governs the interpretation of insurance policies
when federal jurisdiction is based on diversity of citizenship.”).
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The 2015 Policy and 2016 Policy are “claims made and reported polic[ies].”
Ex. A at 1; Ex. B at 1. Under Arkansas law, claims-made-and-reported policies
require that a claim be made and reported in the same policy period. See Cont’l Cas.
Co. v. Walker, 741 F. Supp. 2d 987, 991 (E.D. Ark. 2008) (“Under Arkansas law, a
‘claims made and reported policy’ can only be triggered if the claim is made in
writing and given to the insurer during the policy period.”).5
The Insuring Agreement for the 2015 Policy and 2016 Policy grants coverage
for “a Claim first made against [PBSD] and reported to [ACE] during the Policy
Period.” Ex. A at 3 (emphasis added) (bold omitted); Ex. B at 3 (emphasis added)
(bold omitted). The policies define “claim” as including “a civil, administrative[,] or
regulatory proceeding against any Insured commenced by … the issuance of a notice
of charge or formal investigative order, including without limitation any such
proceeding by or in association with … the [EEOC].” Ex. A at 6 (bold omitted); Ex.
B at 6 (bold omitted). Additionally, the policies define “claim” as including “a civil
proceeding against any Insured seeking monetary Damages or non-monetary or
injunctive relief, commenced by the service of a complaint or similar pleading.” Ex.
A at 6 (bold omitted); Ex. B at 6 (bold omitted). PBSD does not dispute the district
court’s conclusion that under a plain reading of the policies, “Alexander’s December
1, 2015, EEOC charge against PBSD constitutes a claim under the Policies” and
“Alexander’s subsequent lawsuit filed against PBSD on September 22, 2016, also
constitutes a claim under the Policies.” Pine Bluff Sch. Dist., 402 F. Supp. 3d at 559–
60.
5
See also Cont’l Cas. Co. v. Jewell, Moser, Fletcher & Holleman, No. 4:04-
cv-002309-JMM, 2005 WL 1925964, at *2 (E.D. Ark. Aug. 11, 2005) (“Arkansas
courts are clear that in order for a ‘claims made and reported policy’ to apply, the
claim must be made in writing and given to the insurer during the policy period.”);
Campbell & Co. v. Utica Mut. Ins. Co., 820 S.W.2d 284, 286 (Ark. Ct. App. 1991)
(en banc) (“Coverage is therefore provided under this policy when two conditions
are met: first, a claim … must be made against the insured during the policy period,
and second, written notice of the claim must be given to [the insurer] during the
policy period.”).
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The 2015 Policy period spanned from April 2, 2015, to February 1, 2016. The
2016 Policy period spanned from February 1, 2016, to February 1, 2017. PBSD
reasons that because Alexander’s September 22, 2016 “civil action was reported to
ACE on October 3, 2016, which was during the 2016 [P]olicy period,” “ACE was
timely notified of the lawsuit during the 2016 [P]olicy period, and coverage exists
in regards to that claim.” Appellant’s Br. at 20.
PBSD’s reading of the 2016 Policy, however, requires that the single claim
provision appearing in the Limits of Liability section of both policies not apply. If
the single claim provision applies, PBSD’s notice to ACE would be untimely, and
no coverage would be available for the Alexander claim. The Limit of Liability
subsection contained in the Limits of Liability section of the polices sets forth the
single claim provision:
All Claims arising out of the same Wrongful Act and all Interrelated
Wrongful Acts of the Insureds shall be deemed to be one Claim. Such
Claim shall be deemed to be first made on the date the earliest of such
Claim is first made, regardless of whether such date is before or during
the Policy Period.
Ex. A at 22 (emphasis added) (bold omitted); Ex. B at 22 (emphasis added) (bold
omitted).
Here, both claims—the December 1, 2015 EEOC charge and the September
22, 2016 lawsuit—“ar[ose] out of the same Wrongful Act” of sexual harassment and
retaliation. See Ex. A at 22 (bold omitted); Ex. B at 22 (bold omitted).6 Alexander’s
EEOC charge alleged that she had “filed a sexual harassment complaint against [her]
Principal” and that she “believe[d] [she] was not rehired in retaliation for filing
6
The 2015 Policy and 2016 Policy define “Wrongful Act” as a “Wrongful
Employment Practice” and, in turn, define “Wrongful Employment Practice” as
including “[s]exual harassment” and “[r]etaliation.” Ex. A at 15–16 (bold omitted);
Ex. B at 15–16 (bold omitted).
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sexual harassment allegations” against him. Resp. to Statement of Undisputed Facts
at 9.
Alexander’s retaliatory discharge lawsuit mirrored her EEOC charge. She
alleged that she “was not called back from the ROF or rehired, because of her
complaints of sexual harassment” and that “[o]ther teachers were hired … despite
being lesser qualified than Plaintiff Alexander in violation of Defendant PBSD’s
Reduction of Force Policies.” Compl. at 57. In fact, when PBSD notified ACE of
Alexander’s retaliatory discharge lawsuit, PBSD’s counsel advised ACE that
“[t]here was a related EEOC claim and investigation by the Arkansas Department
of Education Professional Licensure Standards Board” concerning Alexander’s
allegations of sexual harassment and retaliation. Resp. to Statement of Undisputed
Facts at 12 (alteration in original) (emphasis added).
Because Alexander’s EEOC charge and lawsuit “ar[ose] out of the same
Wrongful Act,” they are considered “one Claim” under the single claim provision.
Ex. A at 22 (bold omitted); Ex. B at 22 (bold omitted). This “Claim … [is] deemed
to be first made on the date the earliest of such Claim is first made.” Ex. A at 22
(bold omitted); Ex. B at 22 (bold omitted). The earliest date this claim was made is
December 1, 2015—the date that Alexander filed the EEOC charge.
The question, then, is whether the single claim provision located in the Limits
of Liability section applies to PBSD’s claim. If the single claim provision applies,
then neither the 2015 Policy nor the 2016 Policy would provide coverage. No
coverage would exist under the 2015 Policy because “PBSD did not report the claim
to ACE until October 3, 2016, six months after the 60-day grace reporting period
after the 2015 Policy expired.” Pine Bluff Sch. Dist., 402 F. Supp. 3d at 564. And no
coverage would exist under the 2016 Policy because “the claim was first made
against PBSD on December 1, 2015, before the 2016 Policy took effect.” Id. at 565.
We hold that the single claim provision applies to PBSD’s claim. The single
claim provision “unambiguously does bear upon the scope of coverage, i.e., what
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substantive claims are covered, not just upon calculating the limits of [ACE’s]
liability or retention amounts.” Worthington Fed. Bank v. Everest Nat’l Ins. Co., 110
F. Supp. 3d 1211, 1225 (N.D. Ala. 2015).
The Insuring Agreement for the policies provides coverage for claims that are
“first made against [PBSD] and reported to [ACE] during the Policy Period.” Ex. A
at 3 (emphasis added) (bold omitted); Ex. B at 3 (emphasis added) (bold omitted).
“That dovetails with the polic[ies’] ‘single claim’ provision ….” Worthington, 110
F. Supp. 3d at 1225. The single claim provision provides that “[a]ll Claims arising
out of the same Wrongful Act … shall be deemed to be one Claim” and that this
single claim “shall be deemed to be first made on the date the earliest of such Claim
is first made, regardless of whether such date is before or during the Policy Period.”
Ex. A at 22 (emphasis added) (bold omitted); Ex. B at 22 (emphasis added) (bold
omitted). “Courts have construed such timing-of-claim language to allow an insurer
to deny coverage for a claim made during the policy period where the claim is
sufficiently related to a covered claim that was first made before the Policy Period.’”
Worthington, 110 F. Supp. 3d at 1225–26 (cleaned up).
PBSD’s argument “that the ‘single claim’ provision is intended only to set the
limits of liability for a single claim and retention amounts is based in large part upon
the fact that the provision is located within the [2015 Policy and 2016 Policy] under
the section header … Limit of Liability.” Id. at 1225. But this contention is flawed.
Both policies contain a provision stating that “[t]he titles and headings to the various
parts, sections, subsections[,] and endorsements of the Policy are included solely for
ease of reference. They do not in any way limit, expand or otherwise affect the
provisions of such parts, sections, subsections or endorsements.” Ex. A at 26 (bold
omitted); Ex. B at 26 (bold omitted). Most courts interpreting substantially similar
single claim provisions have agreed.7
7
See, e.g., Worthington, 110 F. Supp. 3d at 1225–26; Weaver v. Axis Surplus
Ins. Co., No. 13-cv-7374-SJF-ARL, 2014 WL 5500667, at *15 (E.D.N.Y. Oct. 30,
2014) (“Regardless of the heading under which [the single claim provision] appears,
a reasonable person reading the language in [the single claim provision] would
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Accordingly, we hold that the district court did not err in granting summary
judgment in ACE’s favor. The single claim provision unambiguously applies, and
neither the 2015 Policy nor the 2016 Policy provide coverage for PBSD’s claim
based on Alexander’s September 22, 2016 lawsuit.
B. Waiver and Estoppel
PBSD alternatively argues that that PBSD should be precluded from denying
coverage because of the doctrines of waiver and estoppel. In its brief, PBSD
acknowledges that ACE’s preliminary coverage letter dated October 25, 2016
“purports to ‘reserve[] all rights with regard to the above referenced provisions, as
well as all other rights, remedies and defenses under the Policy.’” Appellant’s Br. at
30 (quoting Ex. K at 3). Nevertheless, PBSD cites ACE’s failure to send its denial-
of-coverage letter until February 15, 2018, as evidence that the doctrines of waiver
interpret it to have only one meaning: that the Policy bars coverage for claims
deemed to be first made before the policy period, and not that it applies only to
determine whether [a certain monetary amount] of liability is available to the insured
based on the relationship between current and prior Claims ….” (quotation
omitted)), aff’d, 639 F. App’x 764 (2d Cir. 2016); Biochemics, Inc. v. Axis
Reinsurance Co., 963 F. Supp. 2d 64, 70–71 (D. Mass. 2013) (rejecting the argument
that a nearly identically worded provision, found under a heading titled “Limits of
Liability,” should be interpreted only to limit the total amount of coverage and not
to act as a complete bar to coverage because “a reasonable insured could not have
ignored that section V.A of the policy bars coverage for a claim deemed to be first
made before the policy period—including any later on the same interrelated
wrongful acts”).
PBSD relies on Fiserv Solutions, Inc. v. Endurance American Specialty Ins.
Co., No. 11-C-0603, 2016 WL 8674661 (E.D. Wis. Sept. 30, 2016), in support of its
argument “that the ‘single claim’ language is not found in the section expressly
labeled ‘Exclusions’ and cannot be considered as such.” Pine Bluff Sch. Dist., 402
F. Supp. 3d at 562. Fiserv is inapposite for the reasons set forth by the district court.
See id. at 562–63.
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and estoppel are applicable. PBSD contends that “ACE ignored the issues related to
the EEOC claim for nearly a year.” Id. According to PBSD, “ACE’s own oversight
and lack of diligence in pursuing these documents for more than a year, in
conjunction with their course of conduct in accepting this matter for a significant
period of time, reasonably led PBSD to believe that coverage existed in this matter.”
Id. at 32. PBSD maintains that ACE learned of the EEOC charge filing not later than
when it received a January 24, 2017 litigation report. That report provides, “Plaintiff
filed an EEOC charge on December 1, 2015.” Ex. 1 at 12, Pine Bluff Sch. Dist. v.
ACE Am. Ins. Co., No. 5:18-cv-00185-KGB (E.D. Ark. 2019), ECF No. 23-1.
According to PBSD, ACE failed to raise the coverage issues at that time and instead
delayed addressing them until November 22, 2017—the day that PBSD’s counsel
sent the EEOC charge to ACE.
Additionally, PBSD asserts that “ACE further demonstrated that [it] waived
its coverage position by hiring separate counsel to represent [the principal], in his
individual capacity, in the action brought by Alexander.” Appellant’s Br. at 33.
According to PBSD, ACE “consented to the hiring of [separate counsel] to represent
[the principal] in his individual capacity in the Alexander case.” Id.
“[U]nder Arkansas law[,] ‘the doctrine of waiver[ 8] or estoppel[ 9] cannot be
given the effect of enlarging or extending the coverage as defined in the contract.’”
J-McDaniel Constr. Co. v. Mid-Continent Cas. Co., 761 F.3d 916, 919 (8th Cir.
2014) (quoting Harasyn v. St. Paul Guardian Ins. Co., 75 S.W.3d 696, 702 (Ark.
8
“A waiver is an intentional abandonment or relinquishment of a known
right.” Sovereign Camp, Woodmen of the World, v. Newsom, 219 S.W. 759, 767
(Ark. 1920) (quotation omitted).
9
“Estoppel arises where, by the fault of one party, another has been induced,
ignorantly or innocently, to change his position for the worse in such manner that it
would operate as a virtual fraud upon him to allow the party by whom he has been
misled to assert the right in controversy.” Newsom, 219 S.W. at 768 (quotation
omitted).
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2002)), as corrected (Aug. 4, 2014). “Nor may estoppel ‘be asserted to extend
coverage under a contract in which it was excluded by specific language.’” Id.
(quoting Harasyn, 75 S.W.3d at 702). As the Arkansas Supreme Court has
explained:
The doctrine of waiver or estoppel, based upon the conduct or
action of the insurer, is not available to bring within the coverage of a
policy risks not covered by its terms, or risks expressly excluded
therefrom, and the application of the doctrine in this respect is to be
distinguished from the waiver of, or estoppel to deny, grounds of
forfeiture. That is, conditions going to the coverage or scope of the
policy, as distinguished from those furnishing a ground for forfeiture,
may not be waived by implication from conduct or action, without an
express agreement to that effect supported by a new consideration.
A cause of action cannot arise on the theory of estoppel. This
follows from the fact that an estoppel is defensive in character. It does
not create a cause of action. Its function is to preserve rights and not to
bring into being a cause of action.
An insurer may waive a defense by his conduct and become
estopped to thereafter assert it, but in any case estoppel operates to
preserve rights already acquired and to prevent forfeitures or avoidance
of duties, but not to create new rights or new causes of action.
Similarly, it has been said that the doctrine of estoppel is
protective only and may be invoked as a shield but not as a weapon of
offense. It is not effective to create a cause of action and should not be
used for gain or profit.
Peoples Protective Life Ins. v. Smith, 514 S.W.2d 400, 406–07 (Ark. 1974).
The present case concerns claims-made-and-reported policies. “[A]s ‘claims
made and reported’ insurance policies, the requirement that [the insured] report
plaintiff[’s] claim to [the insurer] in the same policy period in which he became
aware of [the claim] goes to the scope of coverage of the policies. It is not merely a
condition of forfeiture.” Pizzini v. Am. Int’l Specialty Lines Ins. Co., 210 F. Supp.
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2d 658, 675 (E.D. Pa. 2002) (emphasis added), aff’d, 107 F. App’x 266 (3d Cir.
2004). As a result, applying Arkansas law, the doctrines of waiver and estoppel are
inapplicable. See J-McDaniel Const. Co., 761 F.3d at 919; Peoples Protective Life
Ins., 514 S.W.2d at 406–07.
III. Conclusion
Accordingly, we affirm the judgment of the district court.
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