                    United States Court of Appeals
                          FOR THE EIGHTH CIRCUIT
                                  ___________

                                  No. 06-1904
                                  ___________

Douglas Wood and Carolyn Wood,         *
                                       *
            Appellants,                *
                                       * Appeal from the United States
      v.                               * District Court for the Eastern
                                       * District of Missouri.
Foremost Insurance Company,            *
                                       *
            Appellee.                  *
                                  ___________

                            Submitted: October 19, 2006
                               Filed: December 28, 2006
                                ___________

Before MELLOY, BENTON, and SHEPHERD, Circuit Judges.
                           ___________

BENTON, Circuit Judge.

       A tornado damaged Douglas and Carolyn Wood's roof. They made a claim
under their homeowner's policy. The Woods contend that Foremost Insurance
Company did not promptly settle. They seek compensation for damage to their
property; penalties and attorney's fees under the Vexatious Refusal to Pay Claim
statute; damages for injuries suffered by Mr. Wood when he fell from the roof while
trying to repair it; and interest. The district court granted summary judgment to
Foremost. The Woods appeal.
                                          I.

      After the tornado on May 6, 2003, the Woods immediately filed a claim. On
May 17, a roofing company estimated repairs at $7,753. The Woods say they
promptly forwarded the estimate to Foremost, which it refused. Foremost denies
receiving a written estimate until November 4; the Woods claim that they thrice
submitted the estimate to Foremost after the initial refusal.

      Foremost inspected the Woods' property on May 20, and delivered a check for
$2,722 on May 21. The Woods told Foremost that it had not satisfied the policy. On
June 17, Foremost paid an additional $1,267. With the roof still damaged and snow
forecast, on November 23 Mr. Wood was injured when he fell from the roof while
laying a tarp. Foremost inspected the roof on November 24, and sent another $3,338.
On January 14, 2004, Foremost inspected the home's interior, and two weeks later
paid an additional $4,530. After three inspections and four payments over eight
months, the Woods' claim was settled (minus depreciation and the deductible).

                                          II.

       This court reviews de novo a grant of summary judgment. Wallace v. DTG
Operations, Inc., 442 F.3d 1112, 1117 (8th Cir. 2006). Summary judgment is
appropriate when there is no genuine issue as to any material fact and the moving
party is entitled to a judgment as a matter of law. Fed. R. Civ. P. 56(c). The evidence
is viewed most favorably to the nonmoving party. Hitchcock v. FedEx Ground
Package Sys., Inc., 442 F.3d 1104, 1106 (8th Cir. 2006).

                                          III.

      The insurance policy reads, "We [Foremost] will make settlement within 30
days after we receive an acceptable proof of loss from you and the amount of loss is

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determined as provided in the policy." The policy does not define an "acceptable
proof of loss," and thus is ambiguous as to when payment was due. When interpreting
an insurance policy, Missouri courts follow the principle of contra proferentem, and
construe any ambiguity against the insurer. See Krombach v. Mayflower Ins. Co.,
827 S.W.2d 208, 210 (Mo. banc 1992).

       Mr. Wood says he submitted an estimate to Foremost on May 20, and three
times thereafter. Foremost denies receiving a written estimate from the Woods until
November 4. For purposes of summary judgment, this court assumes that Foremost
received an estimate from the Woods on May 20. Equally, any ambiguity as to an
"acceptable proof of loss" is resolved against Foremost. Thus, a reasonable jury could
find that Foremost was obligated to settle within 30 days after May 20 – which did not
happen. A reasonable jury could find that Foremost breached the policy.

       Foremost emphasizes that the Woods' claim is now settled, with full
compensation for all damages (including mold, corrosion, and water damage to the
home's interior). This argument ignores that the Woods also seek damages under the
Vexatious Refusal to Pay Claim statute, sections 375.296 and 375.420 RSMo. If an
insurance company refuses to pay a claim "without reasonable cause or excuse," then
a jury may award "damages not to exceed twenty percent of the first fifteen hundred
dollars of the loss, and ten percent of the amount of the loss in excess of fifteen
hundred dollars . . . ." Section 375.420 RSMo. The statute also allows interest and
attorney's fees. Id. Viewing the facts most favorably to the Woods, a reasonable jury
could find Foremost liable under the Vexatious Refusal statute. See Dhyne v. State
Farm Fire & Cas. Co., 188 S.W.3d 454, 458-59 (Mo. banc 2006) (upholding a jury
verdict imposing liability under this statute after a three-month delay by the insurance
company).




                                          -3-
                                           IV.

       Before Foremost made its last two payments, Douglas Wood was injured when
he fell from the roof while trying to lay a tarp in anticipation of a snowfall. The
Woods seek compensation for his medical bills, lost income, physical and emotional
pain, and for Mrs. Wood's loss of consortium. The policy does not cover personal
injury claims.

      In Missouri, recovery "by the insured against the insurance company for the
policy benefit . . . is limited to that provided by the law of contract plus, if section
375.420 applies, the enhancements provided by the statute." See Overcast v. Billings
Mut. Ins. Co., 11 S.W.3d 62, 68 (Mo. banc 2000). "[A]n insurance company's denial
of coverage itself is actionable only as a breach of contract and, where appropriate, a
claim for vexatious refusal to pay." Id. at 69.

      The Woods' personal injury claim is limited by the law of contract in Missouri.
Generally, only reasonably foreseeable damages are recoverable in a contract case.
See Kansas City Bridge Co. v. Kansas City Structural Steel Co., 317 S.W.2d 370, 381
(Mo. 1958).

        According to the Woods, their injuries were reasonably foreseeable when the
policy was issued. In addition to claiming that Foremost knew their difficult financial
position, the Woods invoke the policy language: "If you have a loss, you must protect
your dwelling, other structures or personal property from any further damage. If you
fail to do so, any further damage will not be insured by this policy." Accompanying
Foremost's checks was a warning to "cash this check promptly and use its proceeds
to repair your damaged property," or there will be no coverage for "any additional
damage caused by your failure to repair or for unreasonably delayed repairs."




                                          -4-
       The Woods cite no Missouri authority to support their argument that Mr.
Wood's fall was reasonably foreseeable. The most apposite precedent is Bassett v.
Federal Kemper Insurance Co., 565 S.W.2d 823 (Mo. App. 1978). In Bassett, the
insurance company vexatiously refused paying a claim by retroactively cancelling the
policy. The insured could not pay the repair shop, which refused to release the
damaged car. The insured sued under the Vexatious Refusal statute for, among other
things, $11 in replevin costs and $56 in lost wages. The Missouri Court of Appeals
rejected recovery for these damages, holding: "The statute, being penal in nature, must
be strictly construed . . . The statutory provision necessarily excludes other
consequential or collateral damages which do not arise under the policy." Id. at 827.
By this rule, the Woods may not recover for their personal injuries – which are
damages not arising under the policy.

      The Woods invoke at length the rule of Hadley v. Baxendale, 156 Eng. Rep.
145, 151 (Ex. 1854):

      Where two parties have made a contract which one of them has broken,
      the damages which the other party ought to receive in respect of such
      breach of contract should be such as may fairly and reasonably be
      considered either arising naturally, i.e., according to the usual course of
      things, from such breach of contract itself, or such as may reasonably be
      supposed to have been in the contemplation of both parties, at the time
      they made the contract, as the probable result of the breach of it.

       The Missouri Supreme Court says that Hadley excludes "accidental" losses.
"Damages for breaches of contract are only those which are incidental to, and directly
caused by, the breach, and may reasonably be supposed to have entered into the
contemplation of the parties and not speculative profits or accidental or consequential
losses, or the loss of a fancied good bargain." Weber Implement Co. v. Acme
Harvesting Mach. Co., 187 S.W. 874, 876 (Mo. 1916) (emphasis added); see also
United Iron Works, Inc. v. Twin City Ice & Creamery Co., 295 S.W. 109, 113 (Mo.


                                         -5-
banc 1927) (Hadley does not cover "speculative profits, or accidental or consequential
losses").

        Missouri insurance law uses a dictionary definition of "accident": "An event
that takes place without one's foresight or expectation; an undesigned, sudden and
unexpected event. Hence, often, an undesigned or unforeseen occurrence of an
afflictive or unfortunate character; a mishap resulting in injury to a person or damage
to a thing; a casualty; as, to die by accident." West v. Jacobs, 790 S.W.2d 475, 477
(Mo. App. 1990); see also Soukop v. Employers' Liab. Assurance Corp., Ltd., 108
S.W.2d 86, 91 (Mo. banc 1937) (defining "accident" in similar terms); see generally
JUDGE ALMON H. MAUS, 30 MISSOURI PRACTICE: INSURANCE LAW AND PRACTICE §
7.16 (1997).

       Mr. Wood's fall was an accident. It was not foreseen by the parties when the
contract was formed, in light of the Bassett case and Missouri's modified Hadley rule.
Under the law of contract in Missouri, the Woods may not recover for their personal
injuries.

                                          V.

      The grant of summary judgment is reversed as to the non-personal-injury
claims. As to the personal injury claims, summary judgment is affirmed.

                       ______________________________




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