Lead Opinion
Council Tower Association (“Council Tower”) commenced this action in Missouri state court against Axis Specialty Insurance Company (“Axis”), a Connecticut insurer, and Jim Vavak, an independent claims adjuster and Missouri resident. Council Tower asserts insurance coverage and related claims for losses incurred when a portion of the brick veneer covering the east wall of Council Tower’s apartment building in St. Louis fell to the ground. Axis removed the case, and Council Tower moved to remand. See 28 U.S.C. § 1447(c). The district court
I. The Claims Against Axis.
The east exterior wall of Council Tower’s twenty-seven-story building was covered with a decorative brick veneer, twenty-six stories tall, attached to the concrete wall by steel shelf angles and anchor bolts. In October 2005, during the policy’s one-year coverage period, every brick below the eighth story of the east wall fell to the ground along with several of the supporting steel shelf angles. Council Tower filed a timely claim under the policy for reimbursement of its loss.
The Axis Commercial Property policy insured Council Tower’s building against all “RISKS OF DIRECT PHYSICAL LOSS” except losses specifically excluded or limited. Excluded losses included wear and tear; decay, deterioration, and latent defect; settling, cracking, or expansion; faulty or defective design, construction, or maintenance; and “Collapse, except as provided below in the Additional Coverage for Collapse.” As relevant here, the Additional Coverage for Collapse provided:
1. We will pay for direct physical loss or damage to Covered Property, caused by collapse of a building or any part of a building insured under this Coverage Form, if the collapse is сaused by one or more of the following ... b. Hidden decay....
4. Collapse does not include settling, cracking, shrinkage, bulging or expansion.
After an investigation by independent insurance adjuster Vavak, Axis denied the claim on the ground that the loss was caused by inadequate design or construction and therefore excluded. When an expert reported that a loss of lateral stability had caused the bricks to “collapse somewhat vertically,” Council Tower commenced this lawsuit for breach of contract and vexatious refusal to pay its claim.
After substantial discovery, the parties filed cross-motions for summary judgment. Axis argued that the loss was excluded by the wear-and-tear and faulty-design-or-construction exclusions. Council Tower argued that the east-wall failure was a collapse of a part of the building caused by hidden decay of the anchor bolts; therefore, the loss was covered under the Additional Coverage for Collapse. Axis countered that the east-wall failure was not a covered collapse under Missouri law. The district court in a thorough opinion noted that collapse “is the only theory of recovery advanced by Council Tower” and concluded that this coverage theory failed because “there was no collapse under Missouri law.” Council Tower Ass’n v. Axis Spec. Ins. Co., No. 4:08-cv-1605,
Among state courts, two competing interpretations of the term “collapse” have emerged. Many state courts limit the word “collapse” to its plain meaning, usually quoting or adopting a dictionary definition such as, “[t]o fall into a confused mass or into a flattened form by loss of rigidity оr support; to break down, give way, fall in, cave in.” Eaglestein v. Pac. Nati Fire Ins. Co.,
The Supreme Court of Missouri has not addressed this issue. Though only that Court’s decisions are controlling in a diversity case, we may not disregard decisions of the Missouri Court of Appeals unless we are “convinced by othеr persuasive data that the highest court of the state would decide otherwise.” West v. Am. Tel. & Tel. Co.,
2. The narrow issue before us is whether, under Missouri law, the falling of seven stories of a twenty-six-story extеrior brick veneer was a “collapse of a building or any part of a building.” Without question, after the fall, there was some rubble on the ground, but the entire building was not “reduc[ed] to a flattened form.” Williams,
As the district court noted, this question was directly addressed by the Missouri Court of Appeals in Williams-.
The language [in the poliсy] “or any part thereof’ obviously refers to “collapse” of a part of a building, not “partial col*729 lapse” of a part or the whole of a building. The falling or reduction to a flattened form or rubble of an attached garage, supporting foundation wall or roof would appear to be but a few examples of collapse of a part of a building. ... “Where the claim pertains to a collаpse of a part of a building, there must be a collapse of that part. A partial collapse of a part is entirely outside the contemplation of the parties to the insurance contract.”
Thе issue is particularly doubtful because none of the three Missouri Court of Appeals decisions construing the term “collapse” involved losses from events that produced a significant quantity of rubble. Council Tower argues that the pile of bricks on the ground is enough to prove a covered “collapse.” But the above-quoted passage in Williams makes clear, as the district court held, that fallen bricks alone do not establish that “part of the building” collapsed. Here, we agree with the district court that the entire twenty-six-story brick veneer covering the east wall, which served a decorative but not a structural purpose, constituted a part of the building. See Ass’n of Unit Owners of Nestani v. State Farm Fire & Cas. Co.,
Whether the fall of seven stories of bricks constituted a collapse of this twenty-six-story decorative рart of the building may be debatable, but the district court’s conclusion is consistent with the few factually similar cases from other jurisdictions. See Nw. Mut. Ins. Co. v. Bankers Union Life Ins. Co.,
3. Because the Supreme Court of Missouri has yet to construe the term “collapse,” and because a federal court’s task in a diversity case is to predict whether that Court would apply the legal standard in Williams to the facts of this case, the district court prudently examined how this case would be decided if the broader standard applied in other Stаtes were adopted. The district court noted that the falling of seven out of twenty-six stories of decorative brick veneer did not impair the structural integrity of the entire part, as cases applying the broader definition of “collapse” have required. See Kay v. United Pac. Ins. Co.,
For these reasons, we affirm the district court’s conclusion that the falling of less than one-third of Council Tower’s decorative brick veneer was not a collapse of a part of the building within the meaning of the Additional Coverage for Collapse.
II. The Claims Against Vavak
Council Tower’s complaint alleged that independent insurance adjuster Jim Vavak is liable to Council Tower for the torts of injurious falsehood and interference with the insurance contract. The district court concluded that the joinder of Vavak was fraudulent, denied Council Tower’s motion to remand the entire case to state court, and granted Vavak’s motion to dismiss the claims against him for fаilure to state a claim. See Fed.R.Civ.P. 12(b)(6). On appeal, Council Tower argues that the district court erred because its claims against Vavak have a “reasonable basis in law and fact.” That is the standard for deciding the issue of fraudulent joinder when ruling on a timely motion to remand. Menz v. New Holland N. Am., Inc.,
The assumption is wrong. After denying the mоtion to remand, the district court dismissed all claims against Vavak. The claims between two diverse parties, Council Tower and Axis, then proceeded to final resolution on the merits. In Caterpillar Inc. v. Lewis,
Injurious Falsehood. Council Tower’s complaint alleged that, in his initial preliminary report to Axis, Vavak falsely attributed the east-wall failure to deterioration of mortar between the bricks, which turned out to be wrong. The district court dismissed this claim because “Vavak’s preliminary opinion played no role in the denial of coverage, and it cannot be the basis for a claim against him.” Council Tower Ass’n v. Axis Spec. Ins. Co.,
The judgment of the district court is affirmed.
Notes
. The Honorable Catherine D. Perry, Chief Judge of the United States District Court for the Eastern District of Missouri.
. Council Tower argues in the alternative that Axis failed to prove that a specific policy exclusion applies to this loss, even if the east-wall failure was not a collapse. After careful review of Council Tower’s summary judgment pleadings, we agree with the district court that Council Tower’s claim of coverage in the district court was premised solely on the Additional Coverаge for Collapse. “[I]t is axiomatic that issues not presented to the trial
Concurrence Opinion
concurring and dissenting.
While I agree that the district court correctly dismissed the claims against Jim Vavak, I do not believe that a Missouri court would define “collapse of a ... part of a building” as narrowly as does the majority. Because I conclude that the destruction of the veneer was more than a “partial collapse” of a part of a building, but rather wаs a complete collapse of a part, I respectfully dissent.
In the majority’s view, “the entire twenty-six-story brick veneer covering the east wall, which served a decorative but not structural purpose, constituted a part of the building.” The majority, like the district court, seems to view the collapse of the seven stories as merely a partial collapse of a part of a building. As I see it, even though less than the entire twenty-six-story veneer fell from the Council Tower building, those sections that did fall constitute — by themselves — a “part” of the building.
Missouri courts have drawn a distinction between a “collapse of a part” of a building and a “partial сollapse of a part” of a building. See Williams v. State Farm Fire & Cas. Co.,
In Williams, the Missouri Court of Appeals reaffirmed that “collapse” has an unambiguous meaning in Missouri law: “a
Nothing in Williams suggests that an entire wall must collapse for a collapse to have occurred. Rather, Williams merely requires that a part of the building actually fall or be reduced to rubble, rather than partially fall, i.e., crack or bulge. The deficiency in that plaintiffs case was that no part of the basement walls were reduced to rubble — they had merely cracked and bulged.
Similarly, in Heintz v. U.S. Fidelity and Guaranty Co., the Missouri Court of Appeals rejected an insured’s claim under a policy covering “collapse of a building or any part of a building.”
These decisions reveal the difference between the words “part” and “partial” in the Missouri ease law of collapse. “Part” is used to refer to a discrete subset of the entire physical building — a garage, a wall, or a roof. “Partial,” however, is used to refer to a state-of-being — that is, being in the state of partial collapse.
The collapse of the seven stories of veneer in this case was just that — a complete collapse. To be sure, only a portion, or part, of the veneer collapsed. But seven stories of veneer is still a “part of a building” — it must be, otherwise twenty-five stories (of twenty-six) would not be. And the collapse of those seven stories was not partial — not cracking or settling or shrinking — but total, complete. The bricks and mortar and anchor bolts and shelves from
As the district court is in a better position than we to consider the remaining arguments for summary judgment on the issue of coverage, I would remand the case for resolution of those issues.
. The record indicates that the veneer wall was built in vertical sections, each no more than a few stories tall. Each brick section sits on a steel shelf, which is attached to the load-bearing concrete wall by anchor bolts. Each shelf (and its accompanying anchor bolts) can support only a limited number of bricks, so designers (and construction workers) must leave space between the top of one section and the bottom of the next-highest section to prevent the weight of the higher sections from overloading the lower shelves. Because the twenty-six-story veneer wall is most accurately characterized as multiple sections of veneer wall, I consider each of those sections to be a "part” of the building.
. Like the majority, I find our task complicated by the fact that the Supreme Court of Missouri has never said what constitutes a "collapse” under Missouri law. I therefore follow the majority’s lead in treating the decisions of the Missouri Court of Appeals as controlling.
. Under my reading of the Missouri casе law, recovery would be permitted only for those shelves that actually collapsed. The higher shelves, which likely have been weakened but have not yet collapsed, are still in a state of "partial collapse,” and so would not be covered.
. The majority hypothesizes that "even if the Supreme Court of Missouri adopted the broader,” more modern definition of collapse — as a substantial impairment of the structural integrity of the part such that it can no longer perform its function — "there would be no collapse here.” I am not so sure. Certainly the lower seven stories of veneer have been impaired to the point that they no longer perform their decorative function. In any event, none of the Missouri Court of Appeals cases indicate a departure from the traditional view of collapse as a reduction to flattened form or rubble.