Council Tower Ass'n v. Axis Specialty Insurance
2011 U.S. App. LEXIS 172
| 8th Cir. | 2011Background
- Council Tower insured by Axis under an all-risk policy with an Additional Coverage for Collapse.
- During the policy year, seven stories of the east brick veneer detached and fell, with rubble on the ground.
- Axis denied coverage, alleging the loss was caused by faulty design/construction and thus excluded.
- Council Tower sued Axis for breach of contract and vexatious refusal to pay.
- District court granted Axis summary judgment, ruling no collapse under Missouri law; claims against Vavak were dismissed as fraudulently joined.
- On appeal, the Eighth Circuit affirmed the district court’s rulings (coverage and Vavak dismissal).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether seven-story veneer collapse fits 'collapse of a building or any part' under Missouri law | Council Tower: veneer is a part of the building; seven-story fall constitutes collapse. | Axis: no collapse of a part; the loss did not impair structural integrity. | Not a collapse of a part under Missouri law. |
| Whether the loss falls within the Additional Coverage for Collapse | Council Tower: covered if caused by hidden decay in anchor bolts. | Axis: covered only if a collapse occurred; otherwise excluded. | Issue resolved in favor of Axis; no covered collapse. |
| Fraudulent joinder and remand regarding Vavak | joinder had a reasonable basis and remand should be allowed. | joinder was fraudulent; dismissal proper and prevents remand. | District court’s dismissal affirmed; Caterpillar rule applied; remand not required. |
Key Cases Cited
- Williams v. State Farm Fire & Cas. Co., 514 S.W.2d 856 (Mo. Ct. App. 1974) (collapse means falling to rubble; part must collapse, not merely partial failure)
- Eaglestein v. Pacific Nat'l Fire Ins. Co., 377 S.W.2d 540 (Mo. Ct. App. 1964) (collapse defined in context of a building's part)
- Heintz v. U.S. Fidelity & Guaranty Co., 730 S.W.2d 268 (Mo. Ct. App. 1987) (insufficient evidence of collapse where walls did not fall to rubble)
- Gage v. Union Mut. Fire Ins. Co., 169 A.2d 29 (Vt. 1961) (definition of collapse as a part of a building; not every debris event qualifies)
- Kay v. United Pac. Ins. Co., 902 F. Supp. 656 (D. Md. 1995) (broad vs narrow definitions of collapse considered in other jurisdictions)
- Thornewell v. Ind. Lumbermens Mut. Ins. Co., 147 N.W.2d 317 (Wis. 1967) (structural impairment standard discussed in collapse analysis)
- Employers Mut. Cas. Co. of Des Moines, 361 S.W.2d 704 (Tex. 1962) (definition and scope of collapse in policy terms)
- Nestani Ass'n of Unit Owners of State Farm Fire & Cas. Co., 670 F. Supp. 2d 1156 (D. Or. 2009) (treats 'part' of a building as an integral element for collapse analysis)