Slater v. Republic-Vanguard Insurance
2011 U.S. App. LEXIS 17019
| 8th Cir. | 2011Background
- LCI Equipment, Inc. (LCI) imported and sold a Yanmar tractor manufactured abroad and rebuilt in Vietnam.
- Rudy Slater, later deceased, purchased the tractor and was killed in a rollover in Arkansas.
- Wanda Slater, as assignee and real party in interest, sued LCI and others for negligence and strict product liability—centered on lack of roll-over protection (ROPS).
- LCI's insurer, Republic-Vanguard, refused coverage and declined to defend under the Commercial General Liability policy.
- Slater, while the wrongful-death action was pending, obtained an assignment of LCI's policy rights and filed a declaratory-judgment action to enforce coverage, removed to federal court, and the district court granted summary judgment denying defense/indemnity under the Products/Completed-Operations endorsement.
- Slater appeals raising issues about diversity jurisdiction and the interpretation of the policy exclusion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether diversity jurisdiction existed | LCI destroys complete diversity; nondiverse nominal party | LCI is a nominal party; diversity exists | Yes; district court had diversity because LCI was nominal and assigned rights to Slater; appeal to challenge jurisdiction was not preserved |
| Whether the Products/Completed-Operations exclusion bars coverage | Tractor as a product; exclusion applies to product-related claims | Exclusion precludes coverage for product-related bodily injuries arising from product or completed operations | Yes; the exclusion applies to the underlying negligent design, inspection/testing, and warning claims |
| Whether uninstalled equipment exception creates a duty to defend | Injury arising from uninstalled equipment falls outside the exclusion | Exception not applicable or not properly preserved; not controlling | Not properly preserved for review; declined to decide |
| Whether negligent inspection/testing and failure to warn claims fall under excluded product or work categories | Claims arise from services (inspection/testing) rather than product defects | Claims are product-hazard or fall under 'Your work' exclusion | Yes; such claims are excluded either as product-hazard or under Your Work |
Key Cases Cited
- Salem Trust Co. v. Mfrs' Fin. Co., 264 U.S. 182 (1924) (nominal-party diversity doctrine)
- Kramer v. Caribbean Mills, Inc., 394 U.S. 823 (1969) (diversity when assignee is absolute and noncollusive)
- Lincoln Prop. Co. v. Roche, 546 U.S. 81 (2005) (consent to jurisdiction not allowed to defeat lack of jurisdiction)
- Associated Ins. Mgmt. Corp. v. Ark. Gen. Agency, Inc., 149 F.3d 794 (8th Cir. 1998) (assignment issues in diversity and control of litigation)
- LaBatt Co. v. Hartford Lloyd's Ins. Co., 776 S.W.2d 795 (Tex. App. 1989) (warnings/exclusions in products liability context)
- U.S. Sanitary Specialties Corp. v. Globe Indem. Co., 204 F.2d 774 (7th Cir. 1953) (interpretation of uninstalled equipment in completed-operations)
- Cincinnati Ins. Co. v. Sawmill Hydraulics, Inc., 217 F. App'x 572 (8th Cir. 2007) (uninstalled-equipment exception interpretation; site-specific)
- Utica Nat'l Ins. Co. of Tex. v. Am. Indem. Co., 141 S.W.3d 198 (Tex. 2004) (Texas' approach to exclusionary construction)