Westchester Surplus Lines Insurance Company; Amlin Corporate Member, Ltd.; ACE Capital Limited; Catlin Syndicate Limited; ACE Capital V Limited, Plaintiffs - Appellees,
Interstate Underground Warehouse & Storage, Inc., Defendant-Appellant.
Submitted: September 25, 2019
from United States District Court for the Western District of
Missouri - Kansas City
LOKEN, COLLOTON, and KOBES, Circuit Judges.
COLLOTON, CIRCUIT JUDGE
Underground Warehouse & Storage operates an underground
storage facility in a cave that formerly housed a limestone
mine near Kansas City. In 2014, Interstate experienced a
series of so-called "dome-outs," in which layers of
rock destabilized, detached, and collapsed from above into
primary insurer, Westchester Surplus Lines Insurance Company,
sought a declaratory judgment that Interstate's claimed
losses relating to the dome-outs were not covered under the
relevant insurance policy. Four excess insurers, Amlin, ACE
Capital Limited, Catlin, and ACE Capital V Limited, also
sought a declaration that there was no coverage under a
policy that they issued to Interstate. Interstate
counterclaimed against Westchester and alleged a vexatious
refusal to pay its claim under Missouri Revised Statutes
district court granted summary judgment for the insurers
on the ground that the cause of losses was not "building
decay" within the meaning of the primary policy, and
that there was thus no coverage under either policy. We agree
with this conclusion and therefore affirm the judgment.
earth in the area of Interstate's facility consists of
three layers of rock: the deepest layer is Bethany Falls
limestone; above that is Galesburg and Stark shale strata; at
the top is Winterset limestone. Bethany Falls limestone, the
lowest layer, is composed of three "zones" of
limestone. The bottom zone, deepest within the earth, is the
high-quality limestone that is desirable for mining. The
middle zone is usually left in place by miners to form a
smooth and stable natural "ceiling" within a mine.
The upper zone is mostly limestone rubble that has resulted
from erosion occurring since this layer was formed over 300
million years ago. Although the extent of a "rubble
zone" varies, Interstate's expert suggested that the
rubble zone could extend downward from the Galesburg and
Stark strata, through the mostly-rubble upper zone, and, in
some areas, into the middle zone above the natural ceiling.
district court, Interstate confusingly described two
different features of the earth as a "ceiling" of
the facility. When the cave used by Interstate was left
behind from a mining operation, an unimproved limestone slab
from the middle zone of the Bethany Falls limestone formed a
natural ceiling. Interstate sometimes describes this
limestone slab as the "ceiling," see App.
5 ¶ 16, 123 ¶ 16; 9 ¶ 40, 126 ¶ 40;
133-35; 3626; we will refer to this limestone slab as the
"natural ceiling." Interstate reinforced this
natural ceiling by drilling steel bolts into the layers of
rock above, and securing the bolts in place with resin epoxy.
Elsewhere in its submissions, Interstate describes all three
zones of rock penetrated by the steel bolts as the
"ceiling" of the facility. App. 3618. The district
court likewise used both meanings of the term
"ceiling." R. Doc. 139, at 3, 5.
dome-outs allegedly arose from activity relating to a
man-made freezer within Interstate's storage facility.
The facility included two freezers that were created by
isolating and insulating designated spaces within the cave,
and then cooling those spaces. The process of creating the
freezers also froze the moisture within the rubble zone above
the designated freezer spaces. In 2012, one of these freezers
was decommissioned. Interstate's expert concluded that
efforts to "salvage" or repair this freezer-by
erecting new walls within the malfunctioning freezer to
better isolate the space-resulted in a series of freeze-thaw
cycles that destabilized the rubble zone above and eventually
caused four dome-outs during 2014. During these occurrences,
the natural ceiling of the facility, along with certain
layers of rock above that limestone slab, detached and fell
into the area below. App. 5 ¶ 16, 123 ¶ 16; 9
¶ 40, 126 ¶ 40; 133-35; 3626.
submitted claims to Westchester for its dome-out related
losses. The insurance policy that Westchester issued to
Interstate included coverage for collapse of a
"building" caused by "building decay"
under certain circumstances. The excess policy incorporated
the terms and conditions of the primary policy. Westchester
investigated the claims and ultimately denied coverage. This
litigation followed. We review the district court's
interpretation of the Westchester policy de novo and
apply Missouri substantive law. Fed. Ins. Co. v. Great
Am. Ins. Co., 893 F.3d 1098, 1102 (8th Cir. 2018).
Missouri law, general rules of contract interpretation govern
the interpretation of insurance policies. See Todd v. Mo.
United Sch. Ins. Council, 223 S.W.3d 156, 160 (Mo. banc
2007). Policy terms are given "the meaning which would
be attached by an ordinary person of average understanding if
purchasing insurance." Seeck v. Geico Gen. Ins.
Co., 212 S.W.3d 129, 132 (Mo. banc 2007) (internal
quotation omitted). The insured bears the burden of showing
that the claimed loss or damage is covered under the policy.
See Am. Fam. Mut. Ins. Co. v. Coke, 413 S.W.3d 362,
368 (Mo.Ct.App. 2013).
Westchester insurance policy generally excludes coverage for
loss or damage caused by collapse, but the exclusion does not
apply to a provision entitled "Additional
Coverage-Collapse." That part of the policy establishes
coverage for "direct physical loss or damage to Covered
Property, caused by abrupt collapse of a building . . . if
such collapse is caused by . . . building decay that is
hidden from view, unless the presence of such decay is known
to an insured prior to collapse."
accepts for purposes of appeal that Interstate's facility
is a "building" within the meaning of the policy.
That term is not defined in the policy; its ordinary meaning
is "a constructed edifice designed to stand more or less
permanently, covering a space of land, usu[ally] covered by a
roof and more or less completely enclosed by walls."
Webster's Third New International Dictionary 292