John Q. Hammons Hotels, Inc. v. Factory Mutual Insurance

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
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No. 03-3438
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John Q. Hammons Hotels, Inc.; *
Winegardner & Hammons, Inc.; *
John Q. Hammons Hotels, L.P.; *
John Q. Hammons Hotels Two, L.P., *
*
Appellants, *
*
v. *
* Appeal from the United States
Factory Mutual Insurance Company; * District Court for the Western
St. Paul Fire and Marine Insurance * District of Missouri.
Company, *
* [UNPUBLISHED]
Appellees. *
_________________ *
*
Complex Insurance Claims Litigation *
Association, *
*
Amicus on Behalf *
of Appellees. *
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Submitted: September 14, 2004
Filed: September 20, 2004
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Before MORRIS SHEPPARD ARNOLD, BRIGHT, and FAGG, Circuit Judges.
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PER CURIAM.
John Q. Hammons Hotels, Inc. and other Hammons hotel entities (collectively
Hammons) brought this diversity action seeking recovery for water intrusion-related
damages to three of its hotels under three property insurance policies issued by
Factory Mutual Insurance Company and St. Paul Fire and Marine Insurance
Company. The district court* granted summary judgment to the insurance companies,
concluding Hammons knew of the water damage in each of the hotels long before the
policies took effect and failed to provide timely notice to the insurers. Hammons
appeals. Reviewing the grant of summary judgment de novo, Ostrander v. Duggan,
341 F.3d 745, 748 (8th Cir. 2003), we affirm.
Hammons first contends it did not know it had sustained losses before the
insurance policies became effective. The district court properly granted summary
judgment to the insurers because it is undisputed that Hammons knew of appreciable
water-related damages before the insurance coverage began. United Capitol Ins. Co.
v. Hoodco, Inc., 974 S.W.2d 572, 574-75 (Mo. Ct. App. 1998) (insurer cannot insure
against loss that is known or apparent to insured); Prudential-LMI Commercial Ins.
v. Superior Court, 798 P.2d 1230, 1244 n.7 (Cal. 1990). Indeed, Hammons
unsuccessfully attempted to stop the water intrusion long before Hammons obtained
the policies in this case. The district court properly rejected the opinion affidavits
from Hammons’s paid consultant stating Hammons could not have known of the
damages before the policies went into effect because the affidavits contradict
undisputed earlier sworn testimony of Hammons’s employees. Willard v. BIC Corp.,
788 F. Supp. 1059, 1065 (W.D. Mo. 1991). The fact that Hammons may not have
known the precise cause of the water damage is not relevant because Hammons knew
of the loss. Prudential LMI, 798 P.2d at 1238. Further, given that Hammon knew of
the loss before the contract period and the loss continued into the contract period, the
continuous damage is not covered by the insurance contracts in this case. In other
*
The Honorable Scott O. Wright, United States District Judge for the Western
District of Missouri.
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words, as the district court held, the claims were not fortuitous and thus not covered
under the policies. Also, the district court correctly applied the manifestation trigger
rule rather than the continuous trigger rule. Id. at 1246-47.
Whether discussed or not, we have carefully considered all of Hammons’s
arguments and having done so, we affirm the district court’s grant of summary
judgment to the insurers.
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