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Macheca Transport Co. v. Philadelphia Indem. Ins. Co.

United States Court of Appeals, Eighth Circuit

November 21, 2013

MACHECA TRANSPORT COMPANY, doing business as Gateway Cold Storage; David Macheca; Starlin Macheca, Plaintiffs-Appellants

Submitted: Sept. 25, 2013.

Page 1189

John F. Horvath, argued, Chicago, IL, for Appellant.

Martin John Buckley, argued, Saint Louis, MO, (Adrian Phillip Sulser, on the brief), for Appellee.

Before RILEY, Chief Judge, BRIGHT and BYE, Circuit Judges.

BYE, Circuit Judge.

This is an insurance coverage dispute between Macheca Transport Company (Macheca) and Philadelphia Indemnity Insurance Company (Philadelphia) arising from an ammonia leak which occurred in a refrigerated warehouse in November 2001. The dispute has resulted in extended litigation. An initial appeal to our court reversed a summary judgment in favor of

Page 1190

Philadelphia. See Macheca Transp. v. Phila. Indem. Co., 463 F.3d 827, 834 (8th Cir.2006) ( Macheca I ). On remand, the district court again granted summary judgment to Philadelphia on one of Macheca's two coverage theories and dismissed a vexatious refusal-to-pay claim. A jury then resolved the remaining issues in Philadelphia's favor. Macheca filed a second appeal. We concluded the district court erred in granting the second summary judgment to Philadelphia and remanded for further proceedings. See Macheca Transp. v. Phila. Indem. Co., 649 F.3d 661, 675 (8th Cir.2011) ( Macheca II ). Following a second trial, a jury awarded Macheca $174,964 in damages.

Macheca now appeals for a third time. Macheca contends its damages were erroneously reduced by amounts it recovered from a separate insurance carrier, and further claims the district court erred in denying its request for prejudgment interest. We affirm in part, reverse in part, and remand.


We refrain from fully explaining the factual background involved in this case and instead focus on the facts relevant to the limited issues raised in this appeal.[1] The second jury trial addressed solely the amount of damages Macheca claimed for certain categories of loss covered under Philadelphia's policy. Significantly, Macheca had a separate policy issued by another insurer, Travelers Insurance Company (Travelers), which provided coverage for some of the same losses covered by the Philadelphia policy. Travelers paid Macheca a total of $348,481.70 (hereinafter the Travelers payment) for losses resulting from the ammonia leak, which included payments for property damage and lost business income. In the jury instructions for the second trial, the district court told the jury it " must not award damages to [Macheca] for any amount already paid by Travelers Insurance Company." Appellant's Appendix at 178.

The Travelers payment was at issue in the first jury trial. Macheca argued Philadelphia's refusal to pay for property damage prevented it from making necessary repairs to the warehouse and claimed it could not get its business back to full strength without the repairs, causing it to suffer additional lost business income. In fact, based on Philadelphia's breach of the insurance contract, Macheca claimed it could recover all the damages it suffered notwithstanding the $500,000 policy limits for lost business income.

The Travelers payment was relevant to Macheca's claim for the full amount of lost business income in two ways. First, the parties disputed whether the Travelers payment should have been sufficient to allow Macheca to make necessary repairs and thereby stem any ongoing damage for lost business income. Second, there was an issue whether Macheca's claims against Philadelphia should be reduced by the amount Travelers had already paid.

The parties filed motions in limine addressing both the claim for an amount in excess of the $500,000 lost business income policy limits, as well as the question about whether the Travelers payment should reduce Macheca's overall damages. With respect to the policy limits issue, Philadelphia filed a motion in limine seeking to prohibit Macheca's witnesses from testifying about any claim to recover alleged business interruption losses in excess of

Page 1191

$500,000. Macheca, in turn, filed a motion in limine asking to be allowed to introduce evidence of the full amount of its lost business income without regard to the policy limits. With respect to the Travelers payment, Philadelphia's second motion in limine sought, in part, to prohibit Macheca from introducing evidence of damages covered by the Travelers payment, contending Missouri law did not allow a party " to obtain duplicate damages in excess of their actual injury [and thus] any damages recovered by ...

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