Maxus Metropolitan, LLC v. Travelers Property Casualty Co., 24-1176

In September 2018, a major fire destroyed part of the Metropolitan apartment complex in Birmingham, Alabama, causing damage across multiple buildings/phases.
Maxus Metropolitan, LLC (Maxus), the owner, was covered by a $35 million insurance policy with Travelers Property Casualty Company of America (Travelers) for “direct physical loss or damage” and $5 million in business income.
Travelers delayed and then denied certain claims related to soot and water remediation in buildings not directly consumed by fire (Phases 1–4), asserting the damage was not covered under the policy.
Maxus sued in Missouri for breach of contract and vexatious refusal to pay; a jury found for Maxus, awarding over $27M in damages, extra damages for vexatious refusal, and attorneys’ fees.
Travelers appealed, challenging legal definitions of “physical loss,” sufficiency of evidence, jury instructions, attorneys’ fees, and calculation of prejudgment interest.
The district court’s judgment was affirmed on all points except prejudgment interest, which was vacated and remanded for recalculation based on when payment demands were made.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether microscopic soot constitutes “direct physical loss or damage”	Soot contamination rendered buildings uninhabitable and demanded remediation under the policy	Microscopic soot is not a physical loss/damage; property was still usable and remediation was excessive	Sufficient evidence supported jury verdict that soot rendered property unusable; policy covered remediation
Did water damage result from the fire and during covered period?	Water damage was caused by fire-induced ember holes during policy term	Damage manifested after policy expired and may be from preexisting defects	Sufficient evidence: water damage from ember holes during covered period is covered
Vexatious refusal to pay claim validity	Travelers' delay and tactics amounted to willful, unreasonable claim denial	Dispute was reasonably litigable so not vexatious	Even with litigable issues, evidence of inadequate investigation and “no position” responses supported vexatious refusal finding
Validity and scope of fees and prejudgment interest awards	Attorneys’ fees should include pre-suit work and paralegal costs; interest applies to all covered/ascertainable claims	Fees should be limited to in-suit work/attorneys only; interest should not apply or was miscalculated	Fees award proper; prejudgment interest proper in concept but must be recalculated based on date of payment demand

K.C. Hopps, Ltd. v. Cincinnati Ins. Co., 78 F.4th 1002 (8th Cir. 2023) (Missouri policy on “physical loss or damage” requires tangible alteration or contamination)
BBX Cap. Corp. v. Scottsdale Ins. Co., 713 S.W.3d 590 (Mo. Ct. App. 2025) (physical loss means directly material, perceptible, or tangible; distinguishes viral vs. particulate contamination)
Olmsted Med. Ctr. v. Cont’l Cas. Co., 65 F.4th 1005 (8th Cir. 2023) (contaminants like asbestos support “direct physical loss” if property rendered useless)
Port Auth. of N.Y. & N.J. v. Affiliated FM Ins. Co., 311 F.3d 226 (3d Cir. 2002) (contamination must render property unusable/uninhabitable to constitute covered loss)
Jet Midwest Int'l Co. v. Jet Midwest Grp., LLC, 93 F.4th 408 (8th Cir. 2024) (standard for awarding attorneys’ fees in Missouri contracts and statutes)
Macheca Transp. Co. v. Phila. Indem. Ins. Co., 737 F.3d 1188 (8th Cir. 2013) (liquidated damages requirement for prejudgment interest in Missouri)