Hudson Enterprises, Inc. v. Certain Underwriters at Lloyd's London Insurance Companies
2017 U.S. App. LEXIS 7539
| 8th Cir. | 2017Background
- River Valley Marina (Hudson Enterprises) lost five of eight docks during a storm on April 30, 2011 after ~7 inches of rain and high winds in the Little Maumelle River watershed.
- Insurance policy from Certain Underwriters at Lloyd’s London covered "direct physical loss" but excluded losses "caused directly or indirectly" by "Water - (a) Flood, surface water, ... overflow of any body of water."
- Underwriters investigated, denied the claim as caused by a flash flood, and later disclosed a civil engineering expert who concluded flood forces (not wind or a fallen utility pole) caused the damage.
- Hudson asserted the loss was caused by wind (via a fallen utility pole) and moved to strike Underwriters’ expert as untimely; the district court denied the motion.
- District court granted Underwriters’ summary judgment, concluding the exclusion applied because the docks were damaged by flood waters; Hudson appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether district court abused discretion by refusing to strike Underwriters' expert | Hudson: Expert disclosed/supplementation was untimely; report should be stricken | Underwriters: Expert disclosed on deadline; disclosure occurred promptly after obtaining opinion | No abuse of discretion; disclosure complied with scheduling order and Rule 26(e) given short interval |
| Whether the policy's term "flood" is ambiguous | Hudson: "Flood" undefined and ambiguous; should be construed for insured | Underwriters: "Flood" unambiguous; Arkansas authority defines flood waters exceeding ordinary flow | "Flood" is unambiguous under Arkansas law; adopt Ebbing definition (waters above ordinary flow) |
| Whether the docks were damaged by wind (utility pole) or by flood | Hudson: Strong winds toppled a utility pole that struck docks, causing loss | Underwriters: Engineering expert: winds recorded (~40 mph) insufficient to topple pole or cause the structural damage; hydrodynamic flood force sufficient | No genuine dispute: evidence shows flood forces (water overflow and current) caused the damage, not wind impact |
| Whether the flood exclusion bars coverage for damage caused directly or indirectly by flood | Hudson: Damage was from current within banks (not "flood") or from wind/utility pole, so exclusion inapplicable | Underwriters: Waters rose above banks; flood waters and resulting hydrodynamic forces directly/indirectly caused the loss, triggering exclusion | Flood exclusion applies: river overflowed its banks and flood forces (at least indirectly) caused the loss; summary judgment for Underwriters |
Key Cases Cited
- Ebbing v. State Farm Fire & Cas. Co., 1 S.W.3d 459 (Ark. Ct. App.) (defines "flood waters" as waters above the ordinary flow line)
- Essex Ins. Co. v. Holder, 261 S.W.3d 456 (Ark. 2007) (undefined policy terms are not automatically ambiguous)
- Ferndale v. Great Am. Ins. Co., 527 P.2d 939 (Colo. App.) (quoted definition of flood waters adopted in Ebbing)
- Robinson v. Potter, 453 F.3d 990 (8th Cir.) (review of discovery rulings standard)
- Nichols v. Tri-Nat'l Logistics, Inc., 809 F.3d 981 (8th Cir.) (summary judgment standard)
- Pinson v. 45 Dev., LLC, 758 F.3d 948 (8th Cir.) (implementation of summary judgment/choice-of-law discussion)