Argonaut Great Central Insurance v. Audrain County Joint Communications
2015 U.S. App. LEXIS 4196
| 8th Cir. | 2015Background
- In 1977 Hickman Foods contracted for alarm monitoring; by 2005 Q Security had acquired the contract and its alarm panels were monitored at the public 911 center run by Audrain County Joint Communications (ACJC).
- ACJC employees discovered several indicator bulbs on the Q Security panel (including Hickman’s) were inoperable in April 2006; Argonaut (insurer for Hickman) alleges ACJC never notified Q Security or fixed the lights.
- On July 24, 2006, burglars triggered the alarm and later set fire to the store; because the panel lights did not identify the location, ACJC dispatchers could not determine which customer’s alarm sounded; the fire caused > $2 million in damage.
- Argonaut paid the insured and sued ACJC for negligence; Argonaut also argued ACJC waived sovereign immunity by purchasing a liability policy and that the inoperable bulbs might qualify as a "dangerous condition" exception.
- ACJC moved for summary judgment asserting sovereign immunity under Mo. Rev. Stat. § 537.600 and statutory immunity as a 911 call center under § 190.307; ACJC also claimed it and its insurer had retroactively reformed the policy to preserve immunity.
- The district court denied summary judgment, found no clear-and-convincing proof of reformation, and held purchase of insurance waived ACJC's common-law sovereign immunity; ACJC appealed interlocutorily.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did ACJC waive common-law sovereign immunity (§ 537.600) by purchasing liability insurance? | Argonaut: purchase of insurance waived sovereign immunity to the policy limits. | ACJC: insurer and ACJC retroactively reformed the policy to exclude claims covered by sovereign immunity, so immunity preserved. | Held: ACJC failed to prove reformation by clear, convincing evidence; purchase waived common-law sovereign immunity. |
| Does the Court have jurisdiction to review denial of immunity on interlocutory appeal? | Argonaut: limited interlocutory review only for immunity from suit; district court order implicated immunity from suit under § 537.600. | ACJC: appealed denial generally including statutory immunity under § 190.307. | Held: Court has interlocutory jurisdiction only over § 537.600 (immunity from suit), not over § 190.307 (only immunity from liability). |
| Did § 190.307 (911 immunity) get waived by purchasing insurance? | Argonaut: waiver of insurance should also defeat statutory immunity. | ACJC: statutory immunity under § 190.307 is distinct and not waived by policy purchase. | Held: No interlocutory review — court dismissed this portion for lack of jurisdiction (statutory immunity grants only immunity from liability, not suit). |
| Was reformation of the insurance policy proven (mutual mistake / preexisting agreement)? | N/A (Argonaut opposed reformation) | ACJC: there was a pre-existing agreement to include an endorsement preserving sovereign immunity and a mutual mistake omitted it. | Held: Reformation not proven; evidence showed no discussion of immunity when obtaining policy; acceptance and renewal of the unmodified policy undermined reformation claim. |
Key Cases Cited
- Mitchell v. Forsyth, 472 U.S. 511 (Supreme Court 1985) (distinguishes immunity from suit vs. mere defense to liability for interlocutory appeal jurisdiction)
- Van Wyhe v. Reisch, 581 F.3d 639 (8th Cir. 2009) (interlocutory appeal appropriate where denial of immunity from suit effectively forces litigation)
- Liberal v. Estrada, 632 F.3d 1064 (9th Cir. 2011) (state statute granting only immunity from liability does not permit interlocutory appeal)
- Behrens v. Pelletier, 516 U.S. 299 (Supreme Court 1996) (multiple-claim suits do not defeat interlocutory appeal where immunity denied as to some claims)
- Langley v. Curators of the Univ. of Mo., 73 S.W.3d 808 (Mo. Ct. App. 2002) (policy language excluding waiver of sovereign immunity preserves immunity absent other proof)
- Cardinal Partners, LLC v. Desco Inv. Co., 301 S.W.3d 104 (Mo. Ct. App. 2010) (elements required to reform a written instrument: preexisting agreement, mistake, mutuality)
- Dairy Farmers of Am. v. Travelers Ins. Co., 292 F.3d 567 (8th Cir. 2002) (acceptance and renewal of a policy without a claimed term undermines reformation)
- Ethridge v. TierOne Bank, 226 S.W.3d 127 (Mo. 2007) (reformation is an extraordinary equitable remedy requiring clear, cogent, convincing proof)