American Family Mutual Insurance v. Co Fat Le

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
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No. 05-2373
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American Family Mutual Insurance *
Company, a Wisconsin corporation, *
*
Appellee, *
*
v. *
*
Co Fat Le; Dao T. Phan, husband * Appeal from the United States
and wife, and parents of Trai Van Le, * District Court for the
deceased, * Eastern District of Missouri.
*
Defendants, *
*
Kim T. Truong, mother of Dung Van *
Truong, deceased; Bao Luong, Hue *
Vu Luong, parents of Thanh Luong, *
deceased; Hoason Nguyen, mother of *
Quan Anh Ha, deceased; Duong *
Hguyen, father of Dan K. Nguyen, *
deceased; Joan Coulter, Defendant ad *
Litem for Trai Van Le, deceased, *
*
Appellants. *
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Submitted: December 14, 2005
Filed: March 3, 2006
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Before WOLLMAN, BEAM, and RILEY, Circuit Judges.
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WOLLMAN, Circuit Judge.

American Family Mutual Insurance Co. (American Family) brought a
declaratory judgment action, seeking a determination that it was not required to
defend or indemnify the insured because the incident fell within the insurance
policy’s exclusions. The district court granted summary judgment for American
Family.1 We affirm.

I.

American Family issued a homeowner’s insurance policy to Co Fat Le and Dao
T. Phan. Under the policy, Co Fat Le and Dao T. Phan’s son, Trai Van Le, was also
an insured. The policy excludes coverage for bodily injuries or property damage
“arising out of the ownership, supervision, entrustment, maintenance, operation, use,
loading or unloading of any type of motor vehicle.” It also excludes coverage for
bodily injury or property damage arising out of the use of controlled substances.

Trai Van Le owned a car that he parked in his parents’ garage. On the night
of April 28, 2001, Trai Van Le drove the car, which also held four of his friends, into
the garage and closed the garage door. Once inside the garage, Trai Van Le kept the
car’s motor running, as well as the air conditioning and the cassette player. The next
morning, Co Fat Le found the five boys dead in the car. The cause of death was
determined to be acute carbon monoxide intoxication, but acute
methylenedioxymethamphetamine (commonly known as ecstasy) intoxication was
determined to be another significant condition contributing to the deaths. The parents
of Trai Van Le’s four friends (Plaintiffs) sued Co Fat Le, Dao T. Phan, and Trai Van

1
The Honorable David D. Noce, United States Magistrate Judge for the Eastern
District of Missouri, to whom the case was submitted by consent of the parties
pursuant to 28 U.S.C. § 636(c).

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Le2 (Defendants) in Missouri state court for the wrongful deaths arising out of the
incident. Count I alleged that Trai Van Le negligently used an automobile. Count
II alleged that Defendants were negligent in maintaining a dangerous condition on
their premises. Count III alleged general negligence by Defendants.

Trai Van Le’s automobile liability insurer settled with Plaintiffs on the claim
set forth in Count I of their petition. Co Fat Le and Dao T. Phan notified American
Family and requested that it provide a defense for Counts II and III under the terms
of their homeowner’s policy. American Family brought a declaratory judgment
action in the Eastern District of Missouri for a determination that it had no duty to
defend or indemnify Defendants because the claims were excluded under the vehicle
and controlled substances exclusions of the policy. The district court granted
summary judgment to American Family, stating that the policy's vehicle exclusion
applied to each of Plaintiffs’ claims, but that the facts failed to establish that the
controlled substances exclusion applied. The district court reasoned that because the
premises liability and general negligence claims were not incidental to the running
of the vehicle in the closed garage, the claims arose out of the use or operation of the
automobile.

Plaintiffs and Defendants (collectively, Appellants) appeal, arguing that
because the duties Defendants owed to the decedents were not dependent on the use
of the motor vehicle, the doctrine of concurrent proximate cause applies and the claim
is covered by the homeowner’s policy.

II.

We review de novo the district court’s grant of summary judgment. St. Paul
Fire & Marine Ins. Co v. Schrum, 149 F.3d 878, 880 (8th Cir. 1998). Interpretation

2
The state court appointed Joan Coulter as Trai Van Le’s defendant ad litem.

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of an insurance policy is a matter of state law, and we review de novo the district
court’s interpretation of state law. Id. In determining the state law issue of insurance
policy coverage, we are bound in our construction of Missouri law by the decisions
of the Missouri courts. See id. Under Missouri law, the insured has the burden of
proving coverage, and the insurer has the burden of proving that an insurance policy
exclusion applies. Christian v. Progressive Cas. Ins,. Co., 57 S.W.3d 400, 403 (Mo.
Ct. App. 2001) (per curiam).

Missouri law provides that when an insured risk and an excluded risk constitute
concurrent proximate causes of an injury, a liability insurer is liable so long as one
of the causes is covered by the policy. Bowan v. Gen. Sec. Indem. Co. of Ariz., 174
S.W.3d 1, 5 (Mo. Ct. App. 2005). In determining whether this concurrent proximate
cause doctrine applies, we must ascertain whether the alleged covered cause is an act
independent and distinct from the excluded cause of the injury. Id. In the present
case, we must determine whether the allegations that Defendants kept an unsafe
premises and negligently failed to warn the decedents of the risk of harmful carbon
monoxide fumes were independent claims distinct from claims arising out of the
ownership or use of an automobile. We conclude that they were not.

In determining whether there are concurrent proximate causes of an injury,
Missouri courts examine whether each alleged cause could have independently
brought about the injury. See Hunt v. Capitol Indem. Corp., 26 S.W.3d 341, 345
(Mo. Ct. App. 2000); see also Prosser and Keeton on the Law of Torts (W. Page
Keeton ed., 5th ed. 1984). Under the concurrent proximate cause doctrine, an insured
seeking indemnification under a covered policy claim must be able to establish an
independent claim under that policy provision, while at the same time not relying on
an element of a claim that falls under the policy’s exclusion. See, e.g., Centermark
Props., Inc. v. Home Indem. Co., 897 S.W.2d 98, 103 (Mo. Ct. App. 1995)
(explaining that the ownership or use of an automobile, an excluded claim, was
independent from the claim of negligent supervision because it was not an essential

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element of the negligent supervision claim). For example, in Bowan v. General
Security Indemnity Co. of Arizona, 174 S.W.3d 1, a handicapped woman hired a
driving service to transport her to and from her workplace. The driver, as a result of
both his negligence and another driver’s negligence, was involved in a car accident.
The handicapped woman’s seatbelt was not fastened, and she was severely injured.
She sued, alleging that the driver was negligent in failing to make certain that her
seatbelt was fastened. The Missouri Court of Appeals held that this act of negligence
was distinct from the negligent use of the automobile, which was excluded under the
driving service’s insurance policy, because even if the driver had not operated the
vehicle negligently, the woman would still have been able to establish a claim for
negligence for the driver’s failure to make certain that her seatbelt was fastened. Id.
at 6. In contrast, in Hunt v. Capitol Indemnity Corp., 26 S.W.3d 341, the Missouri
Court of Appeals found no independent concurrent proximate cause for the injury.
In that case, a lounge patron was stabbed outside of the lounge. The stabbing victim
sued the lounge owner, claiming that he had negligently failed to protect the victim
from his assailants. The court, however, held that this act was not distinct from the
assault and battery, a claim that was excluded under the insurance policy, because
without the underlying assault and battery there would have been no injury and
therefore no basis for the stabbing victim’s action against the lounge owner for
negligence. Id. at 345.

Appellants first argue that Defendants negligently kept an unsafe premises and
that this was an independent cause of the decedents’ deaths. We disagree. Under
Missouri law, licensees such as the decedents can establish a claim against a property
owner for premises liability if they can show that: (1) a dangerous condition existed
on the property, (2) the property owner knew of the condition and realized that it
involved an unreasonable risk to the licensees, (3) the property owner had reason to
believe that the licensees would not discover the condition or realize the risk, and (4)
the property owner failed to exercise reasonable care to make the condition

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reasonably safe or warn the licensees of the condition and the risk.3 See Gray v.
Russell, 853 S.W.2d 928, 930 (Mo. 1993) (en banc); Ryan v. Rademacher, 142
S.W.3d 846, 849 (Mo. Ct. App. 2004). Here, Appellants allege that the unsafe
conditions on the premises were an inadequately ventilated garage and a running
automobile in a closed garage. The former is not an inherently dangerous condition.
It became dangerous only when the automobile was left running in the garage while
the garage door was closed. The condition of a running automobile in an
inadequately ventilated garage is not independent from the use of an automobile,
which falls under the policy exclusion. Further, just as there would have been no
injury in Hunt if there were no assault and battery, there would have been no injury
in the case at bar if Trai Van Le had not run the automobile in the closed garage.
Therefore, as in Hunt, the allegedly dangerous condition was not an independent
cause of the decedents’ deaths. Similarly, Appellants’ premises liability claim for
running an automobile in a closed garage is not independent from the use of an
automobile, and thus it also falls within the policy exclusion.

Appellants next argue that Defendants negligently failed to warn the decedents
of the risk of harmful carbon monoxide fumes. Appellants have not established that
Missouri law imposes a duty on property owners to inform their licensees of such a
danger when the licensees are not confronted with a running automobile in a closed
garage. Again, there would have been no injury if Trai Van Le had not run the
automobile in the closed garage. Accordingly, the failure to warn was not an
independent concurrent proximate cause of the decedents’ deaths.

Appellants contend that this case is no different from Columbia Mutual
Insurance Co. v. Neal, 992 S.W.2d 204 (Mo. Ct. App. 1999), and St. Paul Fire &

3
Although Appellants refer to the decedents as invitees, we believe that the
record reflects that the decedents were social guests, which is a subclass of licensees
under Missouri law. See Carter v. Kinney, 896 S.W.2d 926, 928 (Mo. 1995) (en
banc).

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Marine Insurance Co. v. Schrum, 149 F.3d 878, in which the courts found that there
were concurrent proximate causes for the plaintiffs’ injuries. In both of these cases,
however, the plaintiffs sought damages for the negligent supervision of a minor, not
for premises liability or general negligence. Negligent supervision of a minor is a
unique claim under Missouri law because “it is the obligation and ability to supervise
and control the child, not the instrumentality that caused the harm, that is the decisive
factor.” A.R.H. v. W.H.S., 876 S.W.2d 687, 689 (Mo. Ct. App. 1994). Negligent
supervision of a minor is thus a concurrent proximate cause of a child’s injury
regardless of the instrumentality that actually caused the harm. The Missouri Court
of Appeals has distinguished cases alleging the negligent supervision of a minor from
other concurrent proximate cause cases on this ground. See, e.g., Neal, 992 S.W.2d
at 208; see also Schrum, 149 F.3d at 880-81.

Finally, Appellants argue that this case is controlled by Centermark Properties,
Inc. v. Home Indemnity Co., 897 S.W.2d 98, because Defendants’ failure to supervise
the garage and Trai Van Le’s use of it is the same as Centermark’s failure to supervise
its employees. Similar to the situations in Neal and Schrum, however, the claim for
negligent supervision in Centermark did not depend on the cause of the eventual
harm, which was the third party theft of the company vehicle. That is not the case
here. Appellants’ claims are not incidental to claims arising out of the use or
ownership of an automobile. Moreover, Defendants have failed to establish that Co
Fat Le and Dao T. Phan had a duty to supervise Trai Van Le. Accordingly,
Appellants’ claims fall under the policy’s vehicle exclusion.

We conclude that Appellants’ claims for premises liability and general
negligence depend upon Trai Van Le’s use of the automobile. Appellants have
therefore not established concurrent proximate causes of the decedents’ deaths. The
insurance policy’s vehicle exclusion applies and Appellants’ claims are not covered
by the policy. Consequently, we need not reach the issue of whether the policy’s
controlled substances exclusion also applies.

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The judgment is affirmed.
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