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MS BAIT v. Employers Insurance of Wausau

Minnesota School Boards Association Insurance Trust v. Employers Insurance of Wausau (D.Minn). Complex insurance coverage proceeding involving a $14 million coverage claim for loss sustained as a result of fire. Jury verdict for insurer affirmed on appeal.

Minnesota School Boards Association Insurance Trust (MSBAIT), a self-insured trust comprised of school districts around the state, paid approximately $14 million to Independent School District #191 for a loss sustained as a result of a fire at the Burnsville High School. MSBAIT sought indemnification from its insurers, including Employers Insurance of Wausau. Wausau denied coverage because MSBAIT canceled the Wausau policy three weeks before the Burnsville High School fire occurred.

MSBAIT filed suit against Wausau alleging that it was insured for the Burnsville High School fire loss notwithstanding the cancellation because the Wausau policy allegedly provided "run-off" coverage. MSBAIT claimed that Wausau owed it in excess of $14 million, including damages for lost investment income and attorney fees.

Following a five week trial, a jury determined that the Wausau policy did not provide "run-off" coverage and that the Wausau policy did not insure MSBAIT for any of the loss it sustained as a result of the Burnsville High School fire. Thus, the jury returned a verdict for Wausau.

The District Court denied MSBAIT's post-trial motions.

MSBAIT appealed the district court’s denial of its motion for judgment as a matter of law following an adverse jury verdict on its breach of contract claim against Employers Insurance of Wausau. MSBAIT also contended on appeal that the district court improperly instructed the jury. The Eighth Circuit Court of Appeals affirmed the judgment, finding ample evidence to support the jury verdict and that there was no error in the jury instructions.

© 2008 Zelle Hofmann/ Not Certified by the Texas Board of Legal Specialization
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