American Railcar Industries, Inc. Plaintiff- Appellant
Hartford Insurance Company of the Midwest Defendant-Appellee Specialty Risk Services, LLC; Randy P. Murphy Defendants
Submitted: January 12, 2017
from United States District Court for the Eastern District of
Missouri - St. Louis
WOLLMAN, MURPHY, and MELLOY, Circuit Judges.
MURPHY, Circuit Judge.
Tedder worked at American Railcar Industries (ARI). He was
injured while he was on a break from work. After his workers
compensation claim was denied, he filed a civil action in
federal court against ARI and was awarded over $1.5 million
in damages. ARI then filed this insurance coverage action
against Hartford Insurance Company (Hartford). The district
court granted Hartford summary judgment after
concluding that the policy did not cover Tedder's
injuries and that ARI's breach of the notification
provision in the policy also barred coverage. ARI appeals,
and we affirm.
Tedder worked for ARI in Arkansas. While Tedder was on a
break from work on April 24, 2008, he was struck by a golf
cart driven by a coworker. The accident injured Tedder's
lower back. At the time of the accident, ARI carried workers
compensation and employers' liability insurance that had
been issued by Hartford. Part one of the policy insured ARI
against workers compensation claims. Under part one Hartford
agreed to pay "the benefits required of [ARI] by the
workers compensation law." Part two of the policy
insured ARI against bodily injury that arose "out of and
in the course of the injured employee's employment."
Part two also stated that "[t]here will be no right of
action against [Hartford] under this insurance unless: 1.
[ARI has] complied with all the terms of this policy."
Part four required ARI to "[p]romptly give [Hartford]
all notices, demands, and legal papers related to the injury,
claim, proceeding or suit."
filed a workers compensation claim on June 6, 2008. ARI
promptly notified Hartford of Tedder's injury and his
workers compensation claim. The claim was referred to Georgia
Diemer at Specialty Risk Services (SRS). SRS was a division
of Hartford at the time of Tedder's injury. Diemer hired
an attorney to defend Tedder's claim against ARI.
Throughout the workers compensation proceedings, Tedder's
attorney told Diemer that he believed that Tedder's
workers compensation claim would not prevail because Tedder
had been on break at the time of the accident. Tedder's
attorney indicated that he was neverthless required to pursue
the workers compensation claim in order to exhaust
Tedder's administrative remedies before filing a civil
tort action. An administrative law judge (ALJ) determined
that Tedder's claim was not compensable under the
Arkansas Workers' Compensation Act because he had not
been performing employment services at the time of the
accident. The full Arkansas Workers' Compensation
Commission affirmed the ALJ's decision.
September 2, 2009, Tedder filed a tort action in federal
district court against ARI. ARI did not promptly forward this
complaint to Hartford. On September 21, ARI's counsel in
the tort action sent a letter to Hartford's lawyer in the
workers compensation action asking him for copies of any
relevant discovery. Attached to the letter was the answer ARI
had filed in the tort action. An ARI employee testified at
his deposition that he thought he had notified Diemer in
approximately October 2009 that, "hey, this has gone
civil." That employee could however not "recall
with certainty" if this happened and stated that it was
"just a conversation. It wasn't to report it . . .
." A jury awarded Tedder $2, 284, 88.20 in 2012, but the
district court later reduced the award to $1, 547, 388.20. We
affirmed. See Tedder v. Am. Railcar Indus., Inc.,
739 F.3d 1104 (8th Cir. 2014).
filed the present insurance coverage action against Hartford
in 2013. ARI claimed that Hartford had breached part two of
the insurance policy by refusing to cover its losses
resulting from the Tedder civil action. The district court
granted Hartford summary judgment after concluding that part
two of the policy did not cover Tedder's injuries because
he had been on a break when the injury occurred. It
additionally concluded that ARI had failed to notify Hartford
of the civil action and that this breach of the policy
obviated Hartford's coverage obligations. ARI appeals.
argues that the district court erred by concluding that it
breached the insurance policy by not promptly notifying
Hartford of Tedder's civil action. We review a district
court's "grant of summary judgment de novo and
consider the facts in the light most favorable to the
nonmoving party." Nichols v. Tri-Nat'l
Logistics, Inc., 809 F.3d 981, 985 (8th Cir. 2016). A
district court's grant of "[s]ummary judgment is
only appropriate when 'there is no genuine dispute as to
any material fact and the moving party is entitled to
judgment as a matter of law.'" Id. (quoting
Pinson v. 45 Dev., LLC, 758 F.3d 948, 951-52 (8th
Cir. 2014)). We review de novo questions of contract
interpretation. Anderson v. Hess Corp., 649 F.3d
891, 896 (8th Cir. 2011).
undisputed that Arkansas law governs this action. If an
insurance policy treats the giving of notice of a lawsuit as
a condition precedent to recovery, "the insured must
strictly comply with the notice requirement, or risk
forfeiting the right to recover from the insurance
company." Fireman's Fund Ins. Co. v. Care Mgmt.,
Inc., 361 S.W.3d 800, 803 (Ark. 2010). If the notice
requirement is a condition precedent, the "insurance
company need not show that it was prejudiced by any delays in
or lack of notification." Id. The notice
requirement in the policy here is a condition precedent to
recovery because part two provides that ARI does not have a
cause of action against Hartford unless ARI complies with all
of the policy's terms. ARI would therefore forfeit any
right to recover from Hartford if it did not strictly comply
with the policy's notice requirement.
part four of the insurance policy, ARI was required to
"[p]romptly give [Hartford] all notices, demands, and
legal papers related to the injury, claim, proceeding or
suit." ARI argues that Tedder's claims throughout
the workers compensation proceedings that he would file a
civil action, ARI's counsel's September 21 letter to
Hartford's workers compensation counsel, and an ARI
employee's conversation with Diemer all put Hartford on
notice that Tedder had filed a civil action against ARI. It
is undisputed, however, that ARI did not forward to Hartford
all of the notices, demands, or ...