Robert Mau v. Twin City Fire Insurance Co.
910 F.3d 388
8th Cir.2018Background
- Twin City insured Eagle Operating and (per Endorsement No. 2) its subsidiaries, which purportedly included Eagle Well Services, Inc. (EWS) and MW Industries; Mau held leadership roles across these entities and owned American Well Services (AWS).
- EWS sold assets to a Sun Well predecessor under an Asset Purchase Agreement that included a noncompetition covenant; Mau and EWS were parties to that Agreement.
- After the sale, MW sold equipment to AWS; Sun Well sued Mau (for breach, fraud, civil conspiracy) and EWS (for breach, fraud), alleging violations of the Agreement; Sun Well did not name MW as a defendant.
- Twin City refused to defend Mau and EWS; Mau and EWS sued Twin City for declaratory relief and related claims; Twin City moved for summary judgment asserting no duty to defend.
- The district court granted Twin City’s cross-motion and denied Mau’s partial summary judgment; the Eighth Circuit reviews de novo and affirms.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Twin City owed Mau a duty to defend based on his role at MW | Mau: sued as MW director/officer, an insured subsidiary, so Twin City must defend | Twin City: Sun Well’s claims arise from the Agreement and Mau’s role at EWS/AWS, not MW; no coverage via MW role | Held: No duty — claims do not depend on MW service; Mau was sued in capacity tied to EWS/AWS, not MW |
| Whether Twin City owes Mau a defense for claims tied to his role at EWS | Mau (raised only on appeal): sued as EWS president so should be covered | Twin City: even if raised, the policy’s dual-service exclusion bars coverage for service to non-insured entities (AWS/affiliate) | Held: Not considered on appeal (argument forfeited); alternatively, dual-service exclusion would preclude coverage |
| Whether Twin City owes EWS a duty to defend claims arising from the Agreement | EWS: contends liability might exist independent of the Agreement (e.g., noncompete void in places; possible rescission) so contract exclusion shouldn’t bar defense | Twin City: contract exclusion bars claims "based upon, arising from, or related to" the Agreement unless liability would exist absent it; Sun Well’s claims depend on the Agreement | Held: No duty — contract exclusion applies because the claims arise from the Agreement and would not exist absent it |
| Applicability of policy exclusions (dual-service and contract) | Plaintiffs: exclusions do not apply (EWS argued exceptions like rescission or venue limits) | Twin City: exclusions apply as written to bar any possibility of coverage | Held: Exclusions apply; therefore no possibility of coverage and no duty to defend |
Key Cases Cited
- Hiland Partners GP Holdings, LLC v. Nat’l Union Fire Ins. Co. of Pittsburgh, PA, 847 F.3d 594 (8th Cir.) (summary-judgment standard and de novo review of district court constructions)
- Pennzoil Co. v. U.S. Fid. & Guar. Co., 50 F.3d 580 (8th Cir.) (duty to defend governed by allegations in the complaint)
- Schultze v. Cont’l Ins. Co., 619 N.W.2d 510 (N.D.) (insurer has no duty to defend when no possibility of coverage)
- Tilbert v. Nodak Mut. Ins. Co., 816 N.W.2d 31 (N.D.) (ambiguities about duty to defend resolved in favor of insured)
- Philadelphia Consol. Holding Corp. v. LSI-Lowery Systems, Inc., 775 F.3d 1072 (8th Cir.) (insurance-policy construction reviewed de novo)
- Eagle Tech. v. Expander Ams., Inc., 783 F.3d 1131 (8th Cir.) (appellate courts generally decline to consider arguments raised first on appeal)