Curtis L. NELSON; Ethеl A. Nelson, Plaintiffs-Appellants v. AMERICAN HOME ASSURANCE COMPANY, Defendant-Appellee.
No. 12-1638.
United States Court of Appeals, Eighth Circuit.
Submitted: Oct. 16, 2012. Filed: Dec. 6, 2012.
702 F.3d 1038
Katherine A. McBride, argued, Robert Edward Salmon, Meagher & Geer, Minneapolis, MN, for appellee.
Before RILEY, Chief Judge, COLLOTON and GRUENDER, Circuit Judges.
GRUENDER, Circuit Judge.
Curtis and Ethel Nelson entered into a stipulated judgment with Metropolitan Council (“Metro Council“) to recover damages sustained during a construction project. The Nelsons then filed suit against Metro Council‘s insurer, American Home Assurance Company (“American Home“), to collect on the judgment. On cross-motions for summary judgment, the district court1 entered judgment in favor of American Home, holding that the Nelsons did not present evidence to establish that Metro Council‘s liability wаs covered by the American Home policy. The Nelsons now appeal, arguing that the district court erred in requiring them to present evidence of coverage. We affirm.
I.
In 2005, Metro Council, a state-chartered regional planning agency for the Minnesota Twin Cities metropolitan area, аnnounced plans to upgrade the Blue Lake Interceptor Sewer System. Part of the project was to take place near Curtis and Ethel Nelson‘s home in Excelsior, Minnesota. Metro Council selected S.M. Hentges & Sons, Inc. (“Hentges“) as its general contractor. Hentges obtained a general commercial liability policy from American Home and named Metro Council as an additional insured. American Home agreed to insure Hentges against “property damage” that was caused by an “occurrence.” The policy defined “property damage” as “physical injury to tangible property, including all resulting loss of use of that property,” or “loss of use of tangible property that is not physically injured.” It defined “occurrence” as “an accident, including continuous or repeated exposure to substantially the same general or harmful condition.” Because Metro Counсil was an “additional insured,” the policy limited its coverage to “liability arising out of [Hentges‘s] operations.”
Construction began near the Nelsons’ home in the fall of 2007 and did not go smoothly. In a March 25, 2008 letter, Metro Council acknowledged that the Nelsons suffered property damages, and in an April 18, 2008 letter, it proposed to mitigate those damages by repairing the property once the project was completed. In
The Nelsons settled with Metro Council, which agreed to pay the Nelsons $250,000 and to stipulate to a Miller-Shugart judgment for $900,000.3 As part of the judgment, Metro Council assigned all of its claims against American Home to the Nelsons. The parties agreed that the settlement amounts were “all for claimed damages because of physical injury to tangible property of [the Nelsons], including resulting loss of use of that property, caused by an accident, including continuous or repeated exposure to substantially the same general harmful conditions, arising out of Hentges‘[s] operations.” This language closely tracks the language in the American Home policy.
Before the court entered judgment, Metro Council sent a copy of the proposed judgment to American Home along with notice of a hearing, at which American Home did not appear. The state court entered judgment on May 3, 2011. On May 4, 2011, the Nelsons filed suit in federal district court to collect its judgment from American Home. On May 5, 2011, the Nelsons moved for partial summary judgment on the issue of whether the policy covered their damages. In response, American Home sought a continuance, requesting time for discovery so that it could evaluate whether the policy covered Metro Council‘s liability. See
The parties subsequently filed cross-motions for summary judgment on the coverage issue. American Home argued that its policy did not cover Metro Council‘s liability because the liability did not arise out of Hentges‘s operations. Rather, it claimed that the liability arose out of Metro Council‘s own act of sending letters to the Nelsons, in which Metro Council acknowledged the property damages and agreed to be responsible for repairs. The Nelsons, on the other hand, argued that the Miller-Shugart judgmеnt alone proved coverage. The district court subsequently granted American Home‘s motion, determining that the Nelsons had the burden to show that American Home‘s policy covered their damages in order to enforce the Miller-Shugart judgment. The court held that the Nelsons’ claim failed because they did not present any evidence to establish the existence of an “occurrence” within the meaning of the policy. The Nelsons then filed a motion to reconsider, which the district court denied, finding that the Nelsons failed to demonstrate the compelling circumstances required to allow reconsideration. See D. Minn. R. 7.1(j). The Nelsons now appeal the district court‘s grant of summary judgment to American Home and the denial of the motion to reconsider.
II.
“We review a grant of summary judgment de novo.” Woods v. DaimlerChrysler Corp., 409 F.3d 984, 990 (8th Cir.2005). Summary judgment is appropriate if “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.”
While a Miller-Shugart judgment settles the issue of the underlying defendant‘s liability to the plaintiff, it does not resolve the question of whether the insurance policy provides coverage for that liability. Rather, coverage is a threshold issue that the court must аddress before deciding whether the stipulated judgment is enforceable. Corn Plus Coop. v. Cont‘l Cas. Co., 516 F.3d 674, 678-79 (8th Cir.2008); Alton M. Johnson Co. v. M.A.I. Co., 463 N.W.2d 277, 279 (Minn.1990) (“[I]f there is found to be no coverage for the Miller-Shugart judgment, that ends the matter.“). In Miller v. Shugart, the Minnesota Supreme Court noted that notwithstanding the settlement between the plaintiff and the underlying defendant, the insurer could still avoid a garnishment action if it prevailed on the issue of coverage: “If the insurer ignores the ‘invitation’ to participate in the settlement negotiations, it may run the risk of being required to pay, even within its policy limits, an inflated judgment.... Of course, the insurer escapes the risk if it should be successful on the coverage issue, and, in that event, it is plаintiff who loses.” 316 N.W.2d at 734.
Coverage is determined by the terms of the insurance policy. Wanzek Constr., Inc. v. Employers Ins. of Wausau, 679 N.W.2d 322, 327 (Minn.2004). “While the insured bears the initial burden of demonstrating coverage, the insurer carries the burden of establishing the applicability of exclusions.” Travelers Indem. Co. v. Bloomington Steel & Supply Co., 718 N.W.2d 888, 894 (Minn.2006). “To establish or trigger coverage under an occurrence-based policy, ‘an insurеd must demonstrate that damage “occurred” while the policy was in effect.‘” Parr v. Gonzalez, 669 N.W.2d 401, 406 (Minn.Ct.App.2003) (quoting N. States Power Co. v. Fid. & Cas. Co., 523 N.W.2d 657, 659-60 n. 3 (Minn.1994)).
For the first time on appeal, the Nelsons also rely on two cases to argue that, as a general principle, an insurer must provide coverage for its insured‘s settlements whether or not the plaintiff establishes coverage. See In re Silicone Implant Ins. Coverage Litig., 667 N.W.2d 405 (Minn.2003); Butler Bros. v. Am. Fid. Co., 139 N.W. 355 (Minn.1913). Normally, we do not consider arguments raised for the first time on appeal. See Trs. of Electricians’ Salary Deferral Plan v. Wright, 688 F.3d 922, 926 (8th Cir.2012) (“[A] party cannot assert arguments that were not presented to the district court in opposing summary judgment in an aрpeal contesting an adverse grant of summary judgment.” (quoting Cole v. Int‘l Union, 533 F.3d 932, 936 (8th Cir.2008))). Regardless, neither Silicone nor Butler deals with a Miller-Shugart judgment, and neither case holds, as the Nelsons contend, that an insurer must provide coverage for its insured‘s settlements. Rather, each case required the insured to prove coverage before deter
Accordingly, we affirm the district court‘s grant of summary judgment to American Home.
III.
We also affirm the district court‘s denial of the Nelsons’ motion to reconsider. The Federal Rules of Civil Procedure do not account for “motions to reconsider.” “However, we have determined that motions for reconsideration are ‘nothing more than Rule 60(b) motions when directed at non-final orders.‘” Elder-Keep v. Aksamit, 460 F.3d 979, 984 (8th Cir.2006) (quoting Anderson v. Raymond Corp., 340 F.3d 520, 525 (8th Cir.2003)). The Nelsons’ motion to reconsider was directed at a non-final summary judgment order because that order resolved only part of their dispute with American Home. See supra note 4; Auto Servs. Co. v. KPMG, LLP, 537 F.3d 853, 856 (8th Cir.2008) (“[A]n order dismissing fewer than all claims or parties is generally not a final judgment.“). Therefore, we consider the Nelsons’ motion to reconsider as we would a Rule 60(b) motion. We review the denial of a Rule 60(b) motion for an abuse of discretion. Minn. Supply Co. v. Raymond Corp., 472 F.3d 524, 534 (8th Cir.2006). “Such a motion is to be granted only in exceptional circumstances requiring extraordinary relief.” Id.
In their motion for reconsideration, the Nelsons cite expert reports created for the underlying litigation and claim that they prove coverage. The Nelsons argue that they did not provide the reports with their motion for summary judgment, however, because they did not know that American Home would argue they had to prove coverage and that the district court would expect them to present evidence of an ocсurrence to prove coverage. But these reasons do not amount to exceptional circumstances that warrant reconsideration. Rule 60 does allow the district court to relieve a party from a judgment or order if the party offers “newly discovered evidence.”
IV.
For the fоregoing reasons, we affirm the grant of summary judgment to American Home as well as the denial of the Nelsons’ motion to reconsider.