Clarinet, LLC v. Essex Insurance
712 F.3d 1246
8th Cir.2013Background
- Clarinet, LLC, a Missouri LLC, sued Essex Insurance in Missouri state court for coverage under a commercial general liability policy.
- Essex removed the case to federal court pursuant to diversity jurisdiction.
- In 2006 a windstorm damaged the Switzer building, a historical property Clarinet owned and intended to renovate.
- Clarinet installed stabilization measures; later, authorities condemned and ordered demolition in 2007, demolishing the building at cost over $660,000.
- Clarinet did not inform Essex of the damage until May 11, 2007 and did not obtain Essex’s consent before demolition.
- Essex denied coverage, relying on an owned property exclusion that bars coverage for damage to the insured’s own property.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the owned property exclusion bar coverage? | Clarinet argues expenses were to prevent harm and would be covered as liability-related costs. | Essex argues the owned property exclusion plainly excludes repair and maintenance of Clarinet’s own property. | Exclusion bars coverage; district court properly granted summary judgment for Essex. |
Key Cases Cited
- Todd v. Missouri United School Ins. Council, 223 S.W.3d 156 (Mo. 2007) (presents rule favoring insured on ambiguities; but here exclusion unambiguous)
- Farmland Indus., Inc. v. Republic Ins. Co., 941 S.W.2d 505 (Mo. 1997) (policies construed by ordinary meaning; ambiguities resolved in insured’s favor)
- State Farm Fire & Cas. Co. v. D.T.S., 867 S.W.2d 642 (Mo. Ct. App. 1993) (burden of proving coverage vs. exclusions)
- Slay Warehousing Co. v. Reliance Ins. Co., 471 F.2d 1364 (8th Cir. 1973) (discusses duty to mitigate damages under some policies; distinguishable here)
- Die-Cutting Diversified, Inc. v. United Nat’l Ins. Co., 353 F. Supp. 2d 1053 (E.D. Mo. 2004) (distinguishes Slay Warehousing when there is no express mitigation duty)