Walsh Construction Company II, LLC v. Ace American Insurance Company

1
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
WALSH CONSTRUCTION )
COMPANY II, LLC, )
)
Plaintiff, )
)
v. ) No. 4:23-CV-01297-CMS
)
ACE AMERICAN INSURANCE )
COMPANY, )
)
Defendant. )
OPINION, MEMORANDUM, AND ORDER
This matter is before the Court on Defendant ACE American Insurance Company’s
Motion for Summary Judgment. (Doc. 51). The Court GRANTS ACE’s Motion for Summary
Judgment on all counts.
FACTUAL AND PROCEDURAL HISTORY
Plaintiff’s Complaint
Walsh Construction Company was hired as the general contractor for the Merchants
Bridge project in Granite City, Illinois. (Doc. 1 at 1). In August 2018, Terminal Railroad
Association of St. Louis, purchased an “‘all risk’ completed value builders risk insurance
policy’” from ACE American Insurance Company. (Doc. 1 at 1; 5). The Policy identified Walsh
as an additional named insured. (Doc. 1 at 1).
On September 30, 2019, flooding of the Mississippi River damaged some of the work
that Walsh had completed on the Bridge. (Doc. 1 at 7). Work on the Bridge was suspended for a
total of 43 days: from September 30, 2019, to November 11, 2019. (Doc. 1 at 8). According to
Walsh, the work stoppage resulted in “extra costs and expenses,” including “labor and equipment
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costs.” Walsh alleged that these “expediting expenses and extra costs . . . caused physical loss
covered by the Policy” in excess of $2.8 million. (Doc. 1 at 8).
The Mississippi River flooded again on March 13, 2020. (Doc. 1 at 2). The March 2020
flood physically damaged the Bridge construction site and required work to be suspended from
March 13, 2020, to July 12, 2020. (Doc. 1 at 9). As with the September 2019 flood, Walsh
alleged that it incurred “extra costs and expenses” covered by the Policy. (Doc. 1 at 10). Walsh
claims that these extra costs exceeded $900,000, but that ACE informed Walsh that only
$752,167.39 was recoverable under the Policy. (Doc. 1 at 10). Additionally, Walsh claimed that
it had incurred “claim preparation expenses” of $16,773.75, but that ACE had declined to pay
more than $2,362.50. (Doc. 1 at 11).
On June 17, 2020, ACE denied Walsh’s claim for “extra and expediting expenses”
arising out of the September 30, 2019, flood. (Doc. 1 at 11). ACE agreed that Walsh’s work on
the Bridge had been delayed because of the September flood, but asserted that these expenses
were covered under the “period for delay coverage” added to the Policy. (Doc. 1 at 11). Four
days later, ACE supplemented its denial and asserted that Walsh’s coverage was “sublimited to
$10,000,000 or 20% of the physical loss, whichever is less.” (Doc. 1 at 12). According to Walsh,
the actual sublimit applicable to the Expediting and Extra Expense Clause was not limited to a
percentage of the physical loss. (Doc. 1 at 12).
On September 20, 2022, ACE denied Walsh’s claim for expediting and extra expenses
arising out of the September 2019 flood again. (Doc. 1 at 12). ACE told Walsh that there was no
coverage for “idle equipment” expenses during the period of restoration. (Doc. 1 at 13).
ACE also applied the same reasoning to the costs associated with the March 2020 flood.
(Doc. 1 at 15). On June 7, 2023, ACE admitted that the March 2020 flood had caused physical
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damage to the Bridge. (Doc. 1 at 15). But ACE again asserted that idle equipment and labor costs
were not covered by the Policy; according to ACE, “Walsh would have incurred the same
equipment expenses” with or without the March 2020 flood. (Doc. 1 at 15).
Walsh filed a Complaint against ACE asserting three claims: (1) Breach of Contract for
the September 2019 flood; (2) Vexatious Refusal to Pay relating to the September 2019 flood;
and (3) Breach of Contract for the March 2020 flood. (Doc. 1). ACE timely filed its Answer on
December 29, 2023. (Doc. 18). ACE now moves for summary judgment after the completion of
discovery. (Doc. 51).
ACE’s Motion for Summary Judgment
ACE moves for summary judgment on all three counts. ACE argues that summary
judgment is proper because the Policy is “unambiguous and there is no coverage under the policy
for any of Walsh’s claims[.]” (Doc. 51, p. 2). In regards to Counts 1 and 3—Walsh’s breach of
contract claims—ACE argues that Walsh is not entitled to coverage under the Policy’s
Expediting and Extra Expenses provision because any costs Walsh alleges to have incurred
during the work stoppages are not “over and above the total costs that would normally have been
incurred during the same period of time had no direct physical LOSS occurred.” (Doc. 51 at 2).
On Count 2, ACE asserts that it has not acted in a “vexatious and unreasonable manner” in
addressing Walsh’s September 30, 2019 flood claim for the same reason: “[t]here is no coverage
for Walsh’s claim for Expediting and Extra Expenses.” (Doc. 51, p. 2).
Along with its Motion for Summary Judgment, ACE filed a Memorandum of Law and
Statement of Material Facts. (Doc. 52; Doc. 53). Walsh filed a Response to ACE’s Statement of
Material Facts (Doc. 59) and its own Statement of Material Facts. (Doc. 60). ACE filed a
Response to Walsh’s Statement of Material Facts. (Doc. 65).
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The Uncontroverted Material Facts1
Walsh was engaged to renovate, repair, and expand the Merchants Bridge between St.
Louis, Missouri, and Illinois. (Doc. 65, p. 1). ACE issued Construction Risk Coverage Policy
I11144834 to Terminal Railroad Association of St. Louis with a policy term of August 1, 2018,
to October 31, 2022, which listed Walsh as an additional named insured. (Doc. 59, p. 1). The
Policy provides Construction Risk coverage for the project with a flood deductible of $250,000.
(Doc. 65, p. 1-2). In connection with the project, Walsh rented a variety of specialized
equipment. (Doc. 65, p. 1). Walsh managed the project through supervisory staff it relocated to
St. Louis. (Doc. 65, p. 4).
The September 30, 2019, flood caused physical damage to the Bridge and resulted in the
suspension of work from September 30, 2019, to November 11, 2019. (Doc. 59, p. 6). ACE
determined that the amount of physical damage to the project was $128,629.40, but did not pay
Walsh anything because this was less than the $250,000 deductible. (Doc. 59 p. 6). In addition,
Walsh submitted an expediting and extra expenses claim in the amount of $1,260,745.07. (Doc.
59, p. 6). ACE denied this claim, asserting that Walsh was attempting to file a premature delay
claim. (Doc. 65, p. 4). On September 21, 2020, ACE sent Walsh a letter including the Expediting
and Extra Expense provision of the Policy. (Doc. 65, p. 4).
The second flood, on March 13, 2020, also physically damaged the Bridge. (Doc 59. p.
8). Work was again stopped on the project from March 13, 2020, to July 12, 2020. (Doc. 59, p.
8). ACE determined that the amount of physical damage to the project was $752,167.60, and
1 This section sets out only the uncontroverted facts that may “affect the outcome of the suit.”
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). As discussed in the Analysis section
below, some facts are uncontroverted when viewed in the context of the Policy. Because these
facts rely on the interpretation of the Policy, additional facts that are relevant to the Court’s
decision to grant summary judgment for ACE on all counts are set out in the Analysis section.
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paid Walsh that amount, less the deductible. (Doc. 59, p. 9). Walsh also claimed that ACE owed
it $3,029,627 for expediting and extra expenses. (Doc. 59, p. 9). Walsh sought $14,411.75 for
claim preparation costs, and ACE ultimately paid claim preparation costs to Walsh in the amount
of $17,212.08. (Doc. 59, p. 9). On June 7, 2023, ACE denied Walsh’s claim for extra expenses
on the ground that the idle equipment and labor expenses would have been incurred regardless of
the flood. (Doc. 65, p. 6).
ANALYSIS
Summary Judgment Standard
“[S]ummary judgment is proper ‘if the pleadings, depositions, answers to interrogatories,
and admissions on file, together with the affidavits, if any, show that there is no genuine issue as
to any material fact and that the moving party is entitled to a judgment as a matter of law.’”
Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986) (citing Fed. R. Civ. P. 56(c)). A party moving
for summary judgment bears the burden of demonstrating that no genuine issue exists as to any
material fact. Id. at 323. A dispute is genuine “if the evidence is such that a reasonable jury could
return a verdict for the nonmoving party,” and a fact is material if it “might affect the outcome of
the suit under the governing law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
“The moving party can satisfy its burden in either of two ways: it can produce evidence negating
an essential element of the nonmoving party’s case, or it can show that the nonmoving party does
not have enough evidence of an essential element of its claim to carry its ultimate burden of
persuasion at trial.” Bedford v. Doe, 880 F.3d 993, 996 (8th Cir. 2018) (citing Nissan Fire &
Marine Ins. Co. v. Fritz Cos., 210 F.3d 1099, 1106 (9th Cir. 2000)).
When the moving party meets this burden, “the adverse party ‘must set forth specific
facts showing that there is a genuine issue for trial.’” Liberty Lobby, Inc., 477 U.S. at 250
(quoting Fed. R. Civ. P. 56(e)). The “party opposing a properly supported motion for summary
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judgment may not rest upon mere allegation or denials of his pleading, but must set forth specific
facts showing that there is a genuine issue for trial.” Id. at 256 (quoting Fed. R. Civ. P. 56(e)).
“The evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn
in his favor.” Id. at 255 (citing Adickes v. S.H. Kress & Co., 398 U.S. 144, 158-59 (1970)).
ACE is Entitled to Summary Judgment on All Counts.
Both parties agree that Missouri law governs this dispute. In Missouri, “[a] breach of
contract action includes the following essential elements: (1) the existence and terms of a
contract; (2) that plaintiff performed or tendered performance pursuant to the contract; (3) breach
of the contract by the defendant; and (4) damages suffered by the plaintiff.” Keveney v. Mo.
Military Acad., 304 S.W.3d 98, 104 (Mo. 2010) (en banc) (citing Howe v. ALD Servs., Inc., 941
S.W.2d 645, 650 (Mo. App. 1997)).
The interpretation of an insurance policy is a question of law reviewed de novo. Owners
Ins. Co. v. Craig, 514 S.W.3d 614, 616 (Mo. 2017) (en banc) (quoting Seeck v. Geico Gen. Ins.
Co., 212 S.W.3d 129, 132 (Mo. 2007) (en banc)). “When interpreting an insurance policy, [a
court] gives the policy language its plain meaning, or the meaning that would be attached by an
ordinary purchaser of insurance.” Seaton v. Shelter Mut. Ins. Co., 574 S.W.3d 245, 247 (Mo.
2019) (en banc) (quoting Doe Run Res. Corp. v. Am. Guar. & Liab. Ins., 531 S.W.3d 508, 511
(Mo. 2017) (en banc). “Definitions, exclusions, conditions and endorsements are necessary
provisions in insurance policies.” Piatt v. Ind. Lumbermen's Mut. Ins. Co., 461 S.W.3d 788, 792
(Mo. 2015) (en banc) (quoting Todd v. Mo. United Sch. Ins. Council, 223 S.W.3d 156, 163 (Mo.
banc 2007) (en banc)). When a word or phrase is undefined, the ordinary meaning of a term or
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phrase is determined from the dictionary.2 Martin v. U.S. Fidelity and Guar. Co., 996 S.W.3d
506, 508 (Mo. 1999) (en banc) (quoting Farmland Industries, Inc. v. Republic Ins. Co., 941
S.W.2d 505, 508 (Mo. 1997) (en banc)).
“When policy language is clear and unambiguous, the policy must be enforced as
written,” and the canons of construction are unnecessary. Taylor v. Bar Plan Mut. Ins. Co., 457
S.W.3d 340, 344 (Mo. 2015) (en banc) (citing Allen v. Cont'l W. Ins. Co., 436 S.W.3d 548, 554
(Mo. 2014) (en banc)). “An ambiguity exists when there is duplicity, indistinctness, or
uncertainty in the meaning of the language in the policy.” Seaton, 574 S.W.3d at 247 (quoting
Taylor, 457 S.W.3d at 344). “Ambiguities in the meaning of an insurance policy are resolved in
favor of the insured, and exclusionary clauses are strictly construed against the drafter.”
Mendenhall v. Prop. And Cas. Ins. Co. of Hartford, 375 S.W.3d 90, 92 (Mo. 2012) (en banc)
(citing Burns v. Smith, 303 S.W.3d 505, 509 (Mo. 2010) (en banc)).
1. ACE Did Not Breach the Insurance Contract Because the Policy Does Not Cover
Walsh’s Claimed Extra Expenses (Counts I and III)
a. The Policy only covers Extra Expenses incurred during the period of
restoration and repair.
The Expediting and Extra Expenses provision of the policy resolves this dispute. That
provision provides, in whole:
In the event of direct physical LOSS insured hereunder, and occurring during the
Policy period, the Company will pay for the reasonable and necessary extra costs
to make temporary repairs, and to expedite the permanent repair or replacement of
the insured property which is damaged by an insured peril; including additional
wages for overtime, night work, and work on public holidays and the extra costs
of express freight or other rapid means of transportation. In addition, the
Company will pay for the reasonable and necessary Extra Expense incurred
during the period of restoration and repair that are over and above the total costs
that would normally have been incurred during the same period of time had no
2 Webster’s Third International Dictionary is the “institutional dictionary” of the Supreme Court
of Missouri. AAA Laundry & Linen Supp. Co. v. Dir. of Revenue, 425 S.W.3d 126, 132 (Mo.
2014) (en banc).
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direct physical LOSS occurred. Extra Expense shall include equipment rental,
emergency expenses, temporary use of property, demobilization and
remobilization of equipment and facilities and other expenses necessarily incurred
to reduce LOSS; excluding however, any coverage provided by the Delay in
Opening Endorsement if endorsed to this Policy.
(Doc. 1-1, p. 13).
Thus, “Extra Expenses” are covered if the expenditures are: (1) reasonable and necessary;
(2) incurred during the period of restoration and repair; and (3) over and above the total costs
that would normally have been incurred during the same period of time had no direct physical
loss occurred. See KT State & Lemon LLLP v. Westchester Fire Ins. Co., 2023 WL 2456499 at
*5 (M.D. Fla. Mar. 10, 2023) (interpreting an identical provision and reaching the same
conclusion).
First, this provision of the Policy contains a temporal limit. Under the plain language of
the Policy, ACE is required to pay Walsh for only the Extra Expenses “incurred during the
period of restoration and repair.” (Doc. 1-1, p. 13). “Period of restoration and repair” is not
defined in the Policy.3 When read in conjunction with the preceding sentence, the “period of
restoration and repair” refers to the period of time in which the Bridge is repaired and restored to
the previous condition before the loss occurred – not the entire project.
The first sentence of this provision provides, “In the event of direct physical LOSS
insured hereunder, and occurring during the Policy period, the Company will pay for the
3 Both Walsh and ACE agree that Trippel, an Executive Claims Director for ACE, understood
“period of restoration and repair” to be “the period of time when the covered physical loss first
occurred up until the time of due diligence and dispatch when the physical loss is repaired or
replaced.” (Doc. 59, p. 5; Doc. 65, p. 8). While the Court ultimately agrees with Trippel’s
interpretation of the Policy, the interpretation of a contract is a question of law, Am. Fed'n of
State, Cnty. & Mun. Emps., AFL-CIO, Council 61 v. State, 653 S.W.3d 111, 127 (Mo. 2022) (en
banc), and Missouri “courts declare the law.” Gershman Inv. Corp. v. Danforth, 517 S.W.3d 33,
35 (Mo. 1974) (en banc).
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reasonable and necessary extra costs to make temporary repairs, and to expedite the permanent
repair or replacement of the insured property which is damaged by an insured peril[.]” By its
own terms, this sentence applies only in the event of a loss that requires “temporary repairs” and
when there is a need to “expedite the permanent repair or replacement of the insured property
which is damaged by an insured peril.” (Doc. 1-1, p. 13).
Naturally, then, the phrase “period of restoration and repair” refers to the time when the
preceding sentence is triggered. Each clause of a contract “must be read in the context of the
entire contract[.]” State ex rel. Pinkerton v. Fahnestock, 531 S.W.3d 36, 44 (Mo. 2017) (en banc)
(quoting McGuire v. Lindsay, 496 S.W.3d 599, 607 (Mo. App. 2016)), abrogated on other
grounds by Theroff v. Dollar Tree Stores, Inc., 591 S.W.3d 432 (Mo. 2020) (en banc). The
phrase “period of restoration and repair” borrows the term “repair” from the preceding sentence.
Through the use of the same term “repair” and the similar term “restoration,” the provision
unambiguously applies only when damage is being “repair[ed].”
The conditional phrases in the first two sentences point in the same direction. The first
sentence starts, “In the event of direct physical LOSS insured hereunder…” (Doc. 1-1, p. 13).
Similarly, the second sentence ends with the condition that “Extra Expense” coverage is
evaluated based on whether the total costs are “over and above what normally would have been
incurred during the same period of time had no direct physical LOSS occurred.” (Doc. 1-1, p.
13). Because both the first and second sentence are based on the same condition—whether a
direct physical loss has occurred—the phrase “period of restoration and repair” refers to the time
necessary to repair and replace the Bridge to its previous condition before the loss occurred.
The dictionary definitions of “restoration and repair” confirm this result. “When a term
consists of more than one word ... and an applicable definition for the term itself cannot be found
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in the dictionary, it still can be somewhat helpful to look to the dictionary's definitions of the
term's constituent parts as an aid to understanding.” JAM Inc. v. Nautilus Ins. Co., 128 S.W.3d
879, 894 (Mo. App. 2004) (quoting Mansion Hills Condo Ass’n v. Am. Family Mut. Ins. Co., 62
S.W.3d 633, 638 (Mo. App. 2001) (emphasis removed)). The relevant definition of “repair” is
“to restore by replacing a part or putting together what is torn or broken: FIX, MEND. …”
WEBSTER’S THIRD NEW INTERNATIONAL DICTIONARY OF THE ENGLISH
LANGUAGE UNABRIDGED 1923 (2002). Similarly, “Restoration” is defined as, “an act of
restoring or the condition or fact or being restored: as a: the bringing back to or putting back into
a former position or condition. … the process or putting a building back into nearly or quite the
original form. …” Id. at 1936.
In moving for summary judgment, ACE alleges that Walsh paid no “extra costs” during
the time periods during which work was stopped due to the September 2019 and March 2020
floods. (Doc. 53, p. 6-8). ACE’s expert, Melissa Impastato, reviewed Walsh’s invoices and
concluded that Walsh did not incur any additional costs during the period of restoration and
repair. (Doc. 53-10, p. 148-49; p. 175).
Walsh’s cited evidence does not contradict this finding. Walsh’s Senior Project Manager,
Daniel Sieve, testified that Walsh ultimately paid more for equipment and labor “[a]t the end of
the project.” (Doc. 59-2, p. 7:21:22). Sieve tied Walsh’s higher costs to the need to work longer
to make up for the work stoppages due to the floods: “[W]e were paying more. We were paying
for equipment that we weren’t using. We had manpower there that was not doing the full
function that they would be doing had we been doing the work. So now we had to have the
equipment for a longer period of time, say eight months, and we had to have the personnel there
for a longer period of time, about eight months. So that is the additional expense.” (Doc. 59-2, p.
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7:22:18-7:23-1). Sieve later clarified in his deposition, “[W]e had to pay those as extra expenses
to do the work because we had to have the people there and the equipment there longer than
anticipated.” (Doc. 59-2, p. 11:41-19-23).
As already explained at length, the plain language of the policy requires additional
expenses to be incurred during the “period of restoration and repair” to qualify as covered “Extra
Expenses.” But Walsh never identifies when it incurred the additional cost resulting from the
delayed project. In context, Sieve’s testimony—the only source that Walsh relies on to
controvert ACE’s Statement of Material Facts on this point—cannot be read to imply that Walsh
incurred the additional expenses during the periods of restoration and repair. Sieve testified that
the job cost twice the initial estimate “because of all the work that would have been done during
[the periods of restoration and repair] now had to be performed after [those periods] with the
same equipment being on-site for that long a period of time.” (Doc. 59-1, p. 45:172:17-22).
According to Sieve, Walsh incurred costs while workers and equipment were “sitting on-site and
then again” when Walsh “actually performed the work.” (Doc. 59-1, p. 46:174:3-7). In short,
Sieve admitted that Walsh actually incurred its alleged “over and above” costs after the period of
restoration and repair. Given that the plain language of the policy covers Extra Expenses
incurred only “during the period of restoration and repair,” the Policy does not cover Walsh’s
claims for Extra Expenses.
b. Walsh did not incur any Extra Expenses during the periods of
restoration and repair that were over and above the total costs that
would normally have been incurred during the same period of time
had the floods not occurred.
Additionally, the Policy covers only expenditures “over and above the total costs that
would normally have been incurred during the [period of restoration and repair] had no direct
physical LOSS occurred.” (Doc. 1-1, p. 13). As part of its Statement of Material Facts, ACE
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claims that all of the idle labor and equipment costs would have been incurred without the 2019
flood event. (Doc. 53, p. 6). Because Walsh therefore incurred “no extra costs… during the time
period that work was stopped due to the September 30, 2019,” (Doc. 53 at 5), ACE alleges there
is no coverage under the Policy for the idle labor and equipment costs.
Again, Walsh opposes this portion of ACE’s Statement of Material Facts, (Doc. 59, p 7),
but none of Walsh’s assertions in support of its claim controverts ACE’s factual allegations when
viewed in the context of the Policy. All of Walsh’s denials rely on deposition testimony of the
Senior Project Manager, Mr. Sieve, which does not support Walsh’s claim. (Doc. 59, p. 7; Doc.
59-2, p. 4, 6:9).
Sieve testified that Walsh did not “anticipate incurring the expense of idle equipment”
when submitting a bid for the Bridge. (Doc. 59-2, p. 13, 45:8-12). Sieve stated that Walsh would
have normally incurred the cost of working equipment during the flood-caused work stoppages,
but instead incurred the cost of idle equipment. (Doc. 59-2, p. 13, 45:13-16). Sieve then
conceded that even though the equipment was idle, “it was still paid at the same rental rate.”
(Doc. 59-2, p. 13, 45:20-21).
This concession is all but dispositive. The Policy does not differentiate between idle and
working equipment. (Doc. 1-1, p. 13). Instead, the relevant question under the Policy is whether
Walsh incurred costs that are “over and above the total costs that would normally have been
incurred during the same period of time had no direct physical LOSS occurred.” (emphasis
added). Sieve admitted that the idle equipment was billed at the same rate, meaning that the cost
Walsh incurred during the “period of restoration and repair” was precisely the same as if no loss
had occurred.
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Walsh’s Statement of Material Facts presents a second theory of coverage: that “Walsh
incurred the expense of idled rental equipment and idled personnel” because Walsh “project[ed]”
that leaving the equipment idle would be more cost-effective than demobilizing and remobilizing
the equipment. (Doc. 60). Sieve testified that demobilizing and remobilizing the idle equipment
during the flood periods would have been more expensive than the cost of leaving the idle
equipment at the worksite. (Doc. 59-2, p. 6, 14:11-15).
Walsh’s claim that it saved money by declining to demobilize and remobilize idle
equipment flips the applicable Policy language on its head. The Policy provides that ACE “will
pay for the reasonable and necessary Extra Expense incurred during the period of restoration and
repair that are over and above the total costs that would normally have been incurred during the
same period of time had no direct physical LOSS occurred.” (Doc. 1-1, p. 13) (emphasis added).
If there had been no flood event, there would have been no expenses for demobilizing and
remobilizing equipment. Moreover, the Policy applies only when Walsh’s total costs during the
same period are “over and above the total costs.” (Doc. 1-1, p. 13). There is nothing in the policy
that grants coverage to Walsh for choosing a less-expensive alternative to demobilizing and
remobilizing equipment in the event of a loss.
As the Policy does not cover Walsh’s claim for Extra Expenses, ACE did not breach the
insurance contract in refusing to pay Walsh’s Extra Expense claims. Similarly, there is no
genuine dispute that Walsh incurred no expenses that were “over and above the total costs that
would normally have been incurred during the” periods of restoration and repair had the floods
not occurred. For these reasons, ACE did not breach the insurance contract in refusing to cover
Walsh’s claimed Extra Expenses, and ACE is entitled to summary judgment on Counts I and III.
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2. Because ACE Had No Duty to Pay Walsh’s Claimed Extra Expenses,
ACE is Entitled to Summary Judgment on Walsh’s Vexatious Refusal to
Pay Claim (Count II).
To succeed on a Missouri vexatious refusal to pay claim, an insured plaintiff must prove
that: (1) he had an insurance policy with the defendant; (2) the defendant refused to pay: and (3)
the refusal was without reasonable cause or excuse. Dhyne v. State Farm Fir and Cas. Co., 188
S.W.3d 454, 457 (Mo. 2006) (en banc). The statute creating this cause of action, RSMo §
375.420, applies only to “losses insured or covered by the policy.” Sloan v. Farm Bureau Town
& Country Ins. Co. of Mo., 696 S.W.3d 481, 484 (Mo. App. 2024) (citing Spring Lumber, Inc. v.
Union Ins. Co., 627 S.W.3d 96, 122 (Mo. App. 2021)). “Where an insurer had no duty to pay
under the insurance policy, there cannot be a claim for vexatious refusal to pay.” Progressive
Preferred Ins. Co v. Reece, 498 S.W.3d 498, 506 (Mo. App. 2016).
As the Court already has concluded, the Policy does not cover Walsh’s claim for Extra
Expenses. ACE is entitled to summary judgment on Count II because ACE had no duty to pay
under the Policy.
CONCLUSION
ACE’s Motion for Summary Judgment (Doc. 51) is GRANTED on all counts. An
appropriate Judgment shall accompany this Opinion, Memorandum, and Order.
Dated this 18th day of December, 2025.
________________________________
CRISTIAN M. STEVENS
UNITED STATES DISTRICT JUDGE
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