Barbara Williams v. Employers Mutual Casualty Co.
2017 U.S. App. LEXIS 557
| 8th Cir. | 2017Background
- Collier owned Autumn Hills mobile home park; from 1999–2009 it carried CGL policies from Employers, Capitol, and Owners that promised defense/indemnity for bodily injury and property damage from "occurrences."
- A class action (Original Action) brought by Autumn Hills residents alleged radium, alpha particle activity, and coliform contamination in the park’s water from 1999–2008, resulting in bodily injury, property damage, relocation costs, and diminution in home value; class judgment awarded substantial damages.
- Collier tendered defense/indemnity to its insurers; they refused. Collier assigned its insurance rights to Williams (class representative) under Missouri law, and Williams filed an equitable garnishment action against the insurers and Collier to reach insurance proceeds.
- Insurers removed under CAFA; district court denied Williams’ motions to remand, concluding the garnishment action was a CAFA class action because it was brought by the certified class representative under a state rule analogous to Rule 23.
- District court granted judgment on the pleadings for the insurers, holding pollution exclusions and contract exclusions barred coverage; later entered a consent judgment in favor of Collier as a nominal defendant. Williams appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether district court had jurisdiction under CAFA over equitable garnishment action | Williams: suit not a "class action" under CAFA because the garnishment complaint invoked Mo. Rev. Stat. § 379.200 (not Rule 23 or an analogous rule) and did not raise class issues | Insurers: action is a class action because Williams pursues rights as certified class representative under Missouri Rule 52.08 (analogous to Rule 23); CAFA applies | Held: CAFA jurisdiction exists — suit was "filed under" a state-law analogue to Rule 23 because it proceeded by a certified class representative and resembled a class action in substance; remand denied |
| Whether consent judgment and prior orders are appealable | Williams: appealed consent judgment and earlier judgment on pleadings | Insurers: consent judgment not appealable and earlier judgment on pleadings was final; appeal untimely | Held: Appellate jurisdiction exists; consent judgment was final and Williams’ consent did not waive right to appeal because it followed a case-dispositive ruling; the judgment on the pleadings was not final because district court continued jurisdiction |
| Whether insurers had duty to defend (pollution exclusion) for radium/alpha/coliform allegations | Williams: pollution exclusion ambiguous as applied; terms like "contaminant/irritant" ambiguous; factual disputes preclude exclusion as matter of law | Insurers: radium, alpha activity, and coliform are pollutants/contaminants within policy language; exclusion bars coverage | Held: Pollution exclusion applies as matter of law — Radium and its alpha emissions and coliform bacteria are pollutants/contaminants in the pleaded context; insurers had no duty to defend |
| Whether insurers had duty to defend/indemnify for claims alleging failure to build amenities (contract vs. tort) | Williams: negligence and breach of contract can both arise from same facts; insurers might owe coverage for negligence | Insurers: allegations sound in contract; policies do not cover contractual breaches or non-occurrence conduct | Held: Allegations relate to breach of contract; Missouri law treats breaches as non-occurrences; insurers had no duty to defend or indemnify on those claims |
Key Cases Cited
- United States v. Stanko, 762 F.3d 826 (8th Cir.) (appellate courts must consider sua sponte jurisdictional limits)
- Great Rivers Coop. v. Farmland Indus., Inc., 198 F.3d 685 (8th Cir.) (final decisions appealable regardless of form)
- Addison Automatics, Inc. v. Hartford Cas. Ins. Co., 731 F.3d 740 (7th Cir.) (continuation of a certified class action by the class representative constitutes a class action for CAFA)
- McCormack Baron Mgmt. Servs., Inc. v. Am. Guarantee & Liab. Ins. Co., 989 S.W.2d 168 (Mo. banc) (insurer’s duty to defend measured by complaint; indemnity depends on facts established at trial)
- Schmitz v. Great Am. Assur. Co., 337 S.W.3d 700 (Mo. banc) (insurer liable for unjustified refusal to defend; ambiguities construed for insured)
- Secura Ins. v. Horizon Plumbing, Inc., 670 F.3d 857 (8th Cir.) (breach of contract is not an "occurrence" under Missouri law)
- Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579 (U.S.) (courts may judicially notice established scientific facts when appropriate)