Rsbi Aerospace, Inc. v. Affiliated Fm Insurance Company

Citations: 49 F.3d 399; 1995 U.S. App. LEXIS 3775; 1995 WL 78047Docket: 94-2706

Court: Court of Appeals for the Eighth Circuit; February 28, 1995; Federal Appellate Court

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RSBI Aerospace, Inc. initiated a breach of insurance contract lawsuit against Affiliated FM Insurance Company after Affiliated denied RSBI's claim for lost inventory due to a fire at its warehouse. Affiliated counterclaimed, alleging fraudulent misrepresentation and sought summary judgment, arguing the fire was caused by an RSBI employee, which, according to the policy, excluded coverage for losses caused by employees. The district court granted summary judgment on RSBI's claims but denied it on Affiliated's counterclaims. 

The fire, which occurred on November 2, 1991, was intentionally set, with Affiliated asserting that employee Guy Tamburello was responsible. Affiliated supported its motion with sworn statements from RSBI's President and Secretary, confirming Tamburello's employment at the time of the fire and his guilty plea to setting the fire. In contrast, RSBI provided affidavits from its President and Secretary, contradicting their earlier statements, claiming Tamburello was terminated on September 30, 1991. RSBI also presented deposition testimony from an accountant who referenced Tamburello's termination and personnel records showing his employment ended in September 1991. The appellate court affirmed the district court's ruling.

RSBI argued that affidavits from its officers and other evidence showed a genuine issue of material fact regarding whether Tamburello was an employee. However, the district court ruled that the clause excluding coverage for employees' acts was enforceable under Missouri law, making Tamburello's employment status a material issue. The court found the affidavits of Barber and Mize contradicted their earlier sworn testimonies without explanation, which, following the precedent in Camfield Tires, did not create a genuine dispute of fact to counter summary judgment. Additionally, the court determined that Tamburello's personnel records and Purinton's deposition did not challenge the overwhelming evidence that he was an employee at the time of the incident, leading to the conclusion that no reasonable jury could find otherwise. Consequently, the court granted summary judgment on RSBI's claims but denied it for Affiliated's counterclaims. RSBI subsequently appealed the decision.

On appeal, the standard of review for summary judgment is de novo, meaning the appellate court evaluates the case as if it were the trial court. Summary judgment is appropriate when there are no genuine issues of material fact, as defined by the criteria that a disputed fact must be material to the case's outcome and genuine enough for a reasonable jury to render a verdict for either party. The moving party bears the burden of proof, and all evidence must be construed in favor of the non-moving party. The court confirmed the materiality of Tamburello’s employment status, highlighting the insurance policy's exclusion clause, which explicitly denied coverage for dishonest acts committed by employees. The court concluded that since the policy specifically addressed such acts, Missouri common law did not apply in this instance.

RSBI argues that the exclusionary language in its policy should not apply due to the ambiguity of the term "employee," which they claim should be interpreted in their favor. However, this argument was not presented to the district court, and established legal precedent prohibits considering issues not raised at that level. Even if the argument were considered, it would fail, as the term "employee" is not inherently ambiguous and should be evaluated in context. Summary judgment was deemed appropriate because there was no genuine issue of material fact regarding whether Guy Tamburello was an employee at the time of the fire. Affiliated provided statements from RSBI's officers confirming Tamburello's employment during that period. Despite these statements, the officers later submitted contradictory affidavits claiming he was terminated in September 1991. Typically, such contradictions would prevent summary judgment; however, past rulings state that parties cannot create sham issues of fact to resist summary judgment. In this case, the affidavits did not clarify the inconsistency or demonstrate confusion, leading the district court to reject them as creating a genuine issue of material fact. 

On appeal, RSBI contends that the inconsistency arose from a misunderstanding of the term "employee," a revelation they claim was only brought to light by witness Robert Purinton. However, this explanation is deemed untimely, as it was not submitted to the district court and is therefore waived. RSBI also points to Purinton's deposition and personnel records, which suggest that Tamburello was terminated on September 30, 1991, as evidence of a genuine issue of material fact. Purinton, retained for the litigation, opined based on his interactions with RSBI officers and the records that Tamburello was indeed terminated. The personnel records further include conflicting documentation indicating he was terminated on that date while remaining as an unpaid advisor.

The deposition of Robert Purinton and personnel records did not establish a genuine issue of material fact as Barber and Mize provided sworn statements on multiple occasions confirming Guy Tamburello's employment with RSBI at the time of the fire. Purinton lacked independent knowledge of Tamburello's termination and based his opinion on Barber and Mize's information and RSBI's records, which, while supporting Barber and Mize’s statements, lacked accompanying affidavits to verify their accuracy. The district court determined that no reasonable jury could conclude otherwise, a finding upheld on appeal.

RSBI contended that the district court mistakenly considered Tamburello's guilty plea and deposition, but the consistent testimonies from Barber and Mize adequately supported the claim of Tamburello's employment, rendering RSBI's lack of counter-evidence significant. Summary judgment was deemed appropriate even without Tamburello's statements, and there was no indication that the court relied on them in its conclusion.

Both the guilty plea and Tamburello's sworn statement were found admissible. A guilty plea is considered powerful evidence, regardless of potential withdrawal, and the court referenced precedents affirming this. Tamburello's sworn statement was also admissible, as it is deemed reliable under Rule 56(c), even if RSBI did not participate in its collection. RSBI's objections to other documents were noted, but the district court did not rely on them for its ruling, allowing for summary judgment to stand regardless.

The district court's summary judgment favoring Affiliated FM Insurance Company was affirmed.