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Polytech, Inc. v. Affiliated FM Ins. Co.

United States Court of Appeals for the Eighth Circuit

September 13, 1993, Submitted ; April 11, 1994, Filed

No. 93-1428


 [*272]  HANSEN, Circuit Judge.

Affiliated FM Insurance Company (Affiliated) appeals the district court's order granting summary judgment on Polytech's claim for payment on a business interruption insurance policy endorsement and denying Affiliated's motion for summary judgment on Polytech's claims for breach of contract. Affiliated argues that the district court erroneously concluded that the business interruption coverage was a statutory "valued policy" under Missouri law. Affiliated also contends that the district court erred in denying Affiliated's motion for summary judgment on Polytech's breach of contract claim. We reverse in part, affirm in part, and remand.

Polytech, Inc., was a manufacturer of cast acrylic plastic sheets (plexiglass) and was located in Owensville, Missouri. An explosion and fire completely destroyed Polytech's production facilities on July 22, 1988. Polytech was insured with Affiliated against loss or damage by fire, among other things, under a policy and its accompanying endorsements.

One of the endorsements [**2]  to the insurance policy provided coverage to Polytech for business interruption losses resulting from fire. The endorsement, which described the terms of the business interruption coverage, covered Polytech's loss of "gross earnings" and "expenses" that result directly from the business interruption. Polytech filed a claim with Affiliated for business interruption coverage seeking the full coverage limits of $ 633,600. Affiliated refused payment on the claim.

Polytech filed a suit for breach of the business interruption endorsement contract and for vexatious refusal to pay the insurance proceeds. Affiliated moved for summary judgment arguing that Polytech's claim for business interruption losses was wholly speculative as a matter of law. Polytech resisted Affiliated's motion and filed its own motion for summary judgment arguing that it was entitled to judgment for the full policy limits as a matter of law because the business interruption coverage constituted a "valued policy" under contract principles or under Missouri statutory law.

The district court entered an order denying Affiliated's motion for summary judgment. The morning the trial was to begin, the district court granted [**3]  Polytech's motion for summary judgment. The district court found that while the business interruption insurance coverage was not a "valued policy" under contract law, the coverage constituted a "valued policy" under "the plain language" of Mo. Rev. Stat. § 379.140. The district  [*273]  court entered judgment for the full amount of the business interruption coverage in favor of Polytech.

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21 F.3d 271 *; 1994 U.S. App. LEXIS 6959 **

Polytech, Inc., Plaintiff-Appellee, v. Affiliated FM Insurance Company, Defendant-Appellant.

Prior History:  [**1]  Appeal from the United States District Court for the Eastern District of Missouri. District No. 90-0452-C-2. Honorable David Noce, Magistrate Judge.


business interruption, personal property, district court, coverage, valued policy, insured, policies, business interruption insurance, real property, depreciable, damages, losses, argues, summary judgment motion, lost profits, endorsement, summary judgment, matter of law, intangible, genuine issue of material fact, insurance policy, insured property, gross earnings, speculative, goodwill

Civil Procedure, Appeals, Standards of Review, De Novo Review, Insurance Law, Business Insurance, Business Interruption Insurance, General Overview, Claim, Contract & Practice Issues, Estoppel & Waiver, Types of Insurance, Property Insurance, Estoppel & Waiver, Operation & Premises, Coverage, Real Property, Real Property, Personal Property, Contracts Law, Design & Purpose, Governments, Legislation, Interpretation, Standard Coverage, Gross Earnings, Measure of Recovery, Tax Law, Federal Income Tax Computation, Valuation, Business Interests, Summary Judgment Review, Standards of Review, Torts, Business Torts, Trials, Jury Trials, Province of Court & Jury