                    United States Court of Appeals
                          FOR THE EIGHTH CIRCUIT
                                  ___________

                                  No. 08-2835
                                  ___________

The Weitz Company, LLC,               *
                                      *
            Appellant,                *
                                      * Appeal from the United States
      v.                              * District Court for the Southern
                                      * District of Iowa.
Lloyd’s of London, also known as      *
Underwriters at Lloyd’s; Lexington    *
Insurance Company; Continental        *
Casualty Company, also known as       *
CNA; United States Fire Insurance     *
Company,                              *
                                      *
            Appellees.                *
                                 ___________

                            Submitted: March 12, 2009
                               Filed: August 4, 2009
                                ___________

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

SHEPHERD, Circuit Judge.

      The Weitz Company (“Weitz”), an Iowa limited liability company, filed this
diversity action for breach of contract and bad-faith denial of an insurance claim
against Lloyd’s of London, Lexington Insurance Company, Continental Casualty
Company, and United States Fire Insurance Company (the “Insurers”). The district
court granted summary judgment for the Insurers and dismissed Weitz’s claims,
holding that Weitz failed to provide timely notice of loss and the Insurers had an
objectively reasonable basis for denying Weitz’s claim. For the reasons set forth
below, we reverse and remand.

                                           I.

       In January 2001, CC-Aventura, Inc., an affiliate of H. Group Holdings, Inc.
(“Hyatt”), hired Weitz as the general contractor to build a luxury retirement
community in Aventura, Florida (the “Project”). Hyatt agreed to purchase and
maintain “All Risks” property insurance that protected Weitz’s interests in its work
at the Project site. As part of its coverage portfolio, Hyatt obtained commercial
property policies (the “Policies”) from the Insurers to cover all of the corporation’s
real and personal property, including the Project. Weitz was not a named insured in
the Policies.1 To establish that it had obtained the required insurance, Hyatt gave
Weitz an “Evidence of Property Insurance” certificate from Hyatt’s broker, Marsh
USA, Inc. The certificate listed “BUILDERS RISK COVERAGE 19333 WEST
COUNTRY CLUB DRIVE AVENTURA, FL 33180,” which is the Project site’s
address. (J.A. 11.) After repeated requests over a three-year period, Hyatt finally
furnished Weitz with copies of the actual Policies in June 2004.

      Severe rains caused water damage to the Project site in June 2002. Hyatt
representatives Tim Reidy and Juan Rodriguez, who visited the Project regularly,

      1
       In a previous ruling in this case, the district court concluded that Weitz is a
third-party beneficiary under the “New Construction, Alteration and Repairs” clause
in Section I of the Policies, which reads in part: “This policy also covers new
buildings and structures at any location while in the course of construction and when
completed . . . including . . . [t]he interests of contractors and subcontractors in such
property to the extent the Insured has assumed liability therefore.” (J.A. 31.) The
Insurers do not dispute this decision. Thus, Weitz has the right to sue under the
Policies. See Weitz Co. v. Lloyd’s of London, et al., No. 4:04-cv-90353, 2004 WL
3158070, at *5 (S.D. Iowa Dec. 6, 2004).

                                          -2-
discovered the damage soon after water entered the construction site. However, Reidy
and Rodriguez did not inform Hyatt’s Risk Management Department of the damage.
Meanwhile, Weitz took immediate steps to repair the water damage. In November
2002, Weitz informed Hyatt that Weitz was compiling costs associated with repairing
the damage and that Weitz planned to submit a claim against the Policies. On
December 10, 2002, Weitz sent a claim letter to Reidy that stated:

      We hereby request that the attached Insurance claim for water damage
      be submitted to your Builders Risk Carrier. The attached package
      contains all costs associated with the rainwater damage that occurred at
      the Classic Residence by Hyatt project located at 19333 West Country
      Club Drive, Aventura, FL. The water damage was a result of extremely
      high volume, windy rains during the month of June 2002. The
      submission of this package has been delayed to allow [t]he Weitz
      Company and the subcontractors the necessary time to compile all costs
      related to this claim. Please submit at your earliest convenience.

(Id. at 467.) On December 23, 2002, Reidy forwarded Weitz’s notice of the water
damage claim to Dan Corrigan at GAB Robins North America, Inc. (“GAB”), the
claims adjuster named in the Policies. Hyatt’s Risk Manager, David Mikulina, was
copied on the letter to GAB. Consequently, both the Insurers and Hyatt’s Risk
Management Department first received notice of the loss on the same day.

       Reidy, Mikulina, and Corrigan conversed via telephone regarding the water
damage claim and the state of construction at the Project when the loss occurred.
Reidy told Corrigan that the structure was not enclosed, watertight, or on schedule,
and that problems existed with materials and workmanship. GAB did not visit the
Project site, view photographs of the damaged property, or discuss the claim with
Weitz. Instead, GAB only discussed the claim with Reidy and Mikulina. On
February 28, 2003, Corrigan informed Hyatt, in writing, that the Policies did not cover
the water damage to the Project for reasons including improper construction and
failure to protect the property. Corrigan’s letter did not claim that Weitz failed to

                                         -3-
provide timely notice of loss. However, the letter contained language reserving any
rights or defenses the Insurers may have had under the Policies or the law. The
Policies’ Notice of Loss provision reads, in relevant part:

       Any loss or damage insured hereunder in excess of $10,000 shall be
       reported in writing with full particulars to Marsh USA Inc., 500 West
       Monroe, Chicago, Illinois 60661 for transmittal to this Company for
       adjustment as soon as practicable after it becomes known to the Insured’s
       [Hyatt’s] Risk Management Department. The Insured may immediately
       make all necessary repairs or replacement. . . . GAB Robins North
       America[,] Inc. will be assigned for loss adjustments under this policy.

(Id. at 43.)

       Reidy and Mikulina discussed GAB’s findings with Corrigan and concurred
with its decision to deny coverage. In March 2003, Hyatt notified GAB that Hyatt no
longer wished to pursue the water damage claim. Hyatt did not inform Weitz of this
development. Because the Insurers denied the claim, Weitz suffered the entire loss
of $3,430,893.74 under the terms of its construction contract. Hyatt owed nothing.
If the Insurers had granted the claim, Hyatt would have had to pay a $250,000
deductible per occurrence under the terms of the Policies.

       On July 7, 2004, Weitz sued the Insurers for breach of contract and for bad-faith
denial of an insurance claim. The Insurers moved for summary judgment on both of
Weitz’s claims. The Insurers argued that Illinois had the most significant relationship
to the Policies and, therefore, Illinois law should apply in this case. Weitz argued that
Iowa or Florida law applied to its breach-of-contract claim and Iowa law applied to
its bad-faith denial claim. The Insurers asserted that Weitz’s claim for breach of
contract failed because Weitz did not give timely notice of loss to the Insurers. They
also argued that Weitz’s claim for bad-faith denial failed because Illinois law does not
recognize a bad-faith denial cause of action. They further asserted that, even if Iowa


                                          -4-
law applied, Weitz could not satisfy the elements of a bad-faith denial claim because
the issue of coverage was “fairly debatable.” Weitz responded by arguing that it had
complied with the Policies’ notice-of-loss provision and established a prima facie case
of bad-faith denial under Iowa law.

       The district court granted summary judgment for the Insurers. On Weitz’s
breach-of-contract claim, the district court found that Illinois law applied because
Illinois had the most significant relationship to the transaction and the parties. The
court noted that Hyatt did not procure the Policies specifically for the Project in
Florida; instead, the Policies covered all of Hyatt’s property in the United States and
Puerto Rico. The court further noted that the Insurers issued the Policies to Hyatt in
Illinois, negotiations between Hyatt and the Insurers took place in Illinois,
endorsements were entitled “Illinois Changes,” complaints were to be lodged with the
Illinois Department of Insurance, Marsh USA and GAB were both located in Illinois,
and notice of loss was to be sent to Marsh USA in Illinois. The court determined that
the Policies’ notice-of-loss provision required Weitz to give the Insurers “notice of
loss ‘as soon as practicable’ after the loss or damage became known.” Weitz Co. v.
Lloyd’s of London, et al., No. 4:04-cv-90353, slip op. at 15 (S.D. Iowa Mar. 31, 2008)
(emphasis added). The district court ruled that Weitz’s claim for breach-of-contract
claim failed because there was no genuine issue of material fact that “Weitz failed to
give the Insurers notice of its claim for water damage within a reasonable time or ‘as
soon as practicable’ as required by the [P]olicies.” Id. at 18.

      Though the district court believed its conclusion on the notice-of-loss issue
rendered moot Weitz’s claim for bad-faith denial, the court briefly addressed the
claim. The court decided that, even “when evaluated under Iowa law as urged by
Weitz,” its claim failed because “the Insurers had an objectively reasonable basis for
not paying the claim and the record is absent of specific facts showing the Insurers
knew or had reason to know that the denial was without basis.” Id. at 25. In so



                                         -5-
holding, the court emphasized that “Hyatt representatives agreed with Corrigan’s
assessment and advised Corrigan that the claim would not be pursued.” Id. at 26.

                                           II.

         Weitz contends the district court erred in applying Illinois law to Weitz’s
breach-of-contract claim. We review de novo the district court’s choice-of-law
determination. St. Paul Fire & Marine Ins. Co. v. Bldg. Constr. Enters., Inc., 526 F.3d
1166, 1168 (8th Cir. 2008) (quotation omitted). Because our analysis of the merits of
Weitz’s breach-of-contract claim merely involves interpreting the plain, unambiguous
language of the Policies’ notice-of-loss provision, we do not need to conduct a choice-
of-law analysis regarding this claim, see Modern Equip. Co. v. Cont’l W. Ins. Co., 355
F.3d 1125, 1128 n.7 (8th Cir. 2004) (“If there is not a true conflict between the laws
. . . on the pertinent issue, then no choice-of-law is required.”). Florida, Illinois, and
Iowa each follow the general rule that, in the absence of ambiguity, courts must
enforce the plain language of provisions in insurance contracts.2 Therefore, regardless
of which state’s law applies, our interpretation and application of the Policies’ notice-
of-loss provision will be the same.

       On the merits of its breach-of-contract claim, Weitz argues that the district court
erred in holding that Weitz’s insurance claim was barred under the Policies’ notice-of-


      2
        See Swire Pac. Holdings, Inc. v. Zurich Ins. Co., 845 So.2d 161, 165 (Fla.
2003) (“[W]e must follow the guiding principle that this Court has consistently
applied that insurance contracts must be construed in accordance with the plain
language of the policy.”); Country Mut. Ins. Co. v. Livorsi Marine, Inc., 856 N.E.2d
338, 343 (Ill. 2006) (“If the words used in the [insurance] policy are unambiguous,
they are given their plain, ordinary, and popular meaning.”); LeMars Mut. Ins. Co. v.
Joffer, 574 N.W.2d 303, 307 (Iowa 1998) (“The cardinal principle in the construction
and interpretation of insurance policies is that the intent of the parties at the time the
policy was sold must control. Except in cases of ambiguity, the intent of the parties
is determined by the language of the policy.” (citation omitted)).

                                           -6-
loss provision. Specifically, Weitz believes it complied with the plain language of the
provision, which required providing notice of loss “as soon as practicable after it
becomes known to the Insured’s [Hyatt’s] Risk Management Department.” (J.A. 43.)
The Insurers argue that Weitz did not advance this plain-language argument in the
district court; therefore, the issue is waived on appeal. Further, the Insurers assert that
adopting Weitz’s interpretation would produce an absurd result in which a third-party
beneficiary could delay giving notice for years as long as Hyatt’s Risk Management
Department remained unaware.3

       Weitz has not waived its ability to argue that it complied with the plain
language of the notice-of-loss provision. “Although, as a general rule, we do not
consider issues not presented to the district court, a blanket statement condemning
new arguments is far too broad.” Universal Title Ins. Co. v. United States, 942 F.2d
1311, 1314 (8th Cir. 1991) (quotation omitted). “The real question should be whether
[Weitz’s] new argument is such as to raise a new issue. . . . [I]t would be in
disharmony with one of the primary purposes of appellate review were we to refuse
to consider each nuance or shift in approach urged by a party simply because it was
not similarly urged below.” Id. (quotation omitted). In the district court, Weitz
argued that it had substantially complied with the notice-of-loss provision by giving
notice within a reasonable time. On appeal, Weitz still contends it complied with the
notice-of-loss provision but asserts that timeliness should be measured from when
Hyatt’s Risk Management Department learned of the loss, not when Weitz discovered
the loss. Although it certainly constitutes a “shift in approach,” Weitz’s argument
does not “raise a new issue” on appeal. Id. Indeed, the timeliness of Weitz’s notice


      3
       We decline the Insurers’ invitation to ignore the Policies’ plain language in
order to avoid what they perceive to be an “absurd result.” If the Insurers believed
their own policy language was absurd, then they should have drafted different
language. See, e.g., Montgomery Ward & Co. v. Home Ins. Co., 753 N.E.2d 999,
1004 (Ill. App. Ct. 2001) (the insurer “easily could have refused to have included this
type of notice requirement in the policy” because “[i]nsurance carriers are certainly
sophisticated enough and wield sufficient bargaining power to protect their interests”).
                                          -7-
was squarely at issue below. See Weitz Co., No. 4:04-cv-90353, slip op. at 8-9, 15-
23. Moreover, even if Weitz’s shift in approach did raise a new issue, “[w]e also have
the discretion to consider an issue for the first time on appeal where the proper
resolution is beyond any doubt . . . or when the argument involves a purely legal issue
in which no additional evidence or argument would affect the outcome of the case.”
Universal Title, 942 F.2d at 1314-15 (quotation omitted). Thus, we will consider
Weitz’s argument on appeal.

       “We review de novo the district court’s interpretation of provisions in an
insurance contract, as well as its ultimate decision to grant summary judgment.”
Transcon. Ins. Co. v. W.G. Samuels Co., 370 F.3d 755, 757 (8th Cir. 2004). We have
already established that, under Florida, Illinois, or Iowa law, we must enforce the
Policies’ plain, unambiguous language. See Swire Pac. Holdings, Inc. v. Zurich Ins.
Co., 845 So.2d 161, 165 (Fla. 2003); Country Mut. Ins. Co. v. Livorsi Marine, Inc.,
856 N.E.2d 338, 343 (Ill. 2006); LeMars Mut. Ins. Co. v. Joffer, 574 N.W.2d 303, 307
(Iowa 1998). The provision in question requires that notice of loss be given “as soon
as practicable after it becomes known to the Insured’s Risk Management Department”
(J.A. 43 (emphasis added)), not merely “after the loss or damage became known” as
the district court found, Weitz Co., No. 4:04-cv-90353, slip op. at 15 (emphasis
added). The Insurers do not contend that this language is ambiguous. Nor do they
dispute that Hyatt is the “Insured” under the Policies or that Hyatt’s Risk Management
Department did not receive notice of the loss until December 23, 2003—the same day
the Insurers first received notice.

      In sum, under the Policies’ plain language, timeliness of notice of loss is
measured from when Hyatt’s Risk Management Department became aware of the loss,
not when Weitz or other Hyatt personnel discovered the damage.4 The undisputed


      4
       Even under Illinois law, which the Insurers advocated and the district court
applied, state and federal courts have enforced language similar to the Policies’ notice-
of-loss provision. See Keystone Consol. Indus., Inc. v. Employers Ins. Co. of
                                           -8-
facts demonstrate that the Insurers and Hyatt’s Risk Management Department received
notice of loss on the same day. Therefore, there can be no genuine issue of material
fact that Weitz complied with the Policies’ notice-of-loss provision. We reverse the
district court’s order granting summary judgment for the Insurers on Weitz’s breach-
of-contract claim.

                                         III.

       On its bad-faith denial claim, Weitz argues that the district court erred in
granting summary judgment because genuine issues of material fact remain as to
whether the Insurers’ denial was reasonable under the circumstances. “We review a
district court’s grant of summary judgment de novo. Summary judgment is proper if
there is no genuine issue as to any material fact and the moving party is entitled to
judgment as a matter of law. We must view the evidence, and the inferences that may
be reasonably drawn from it, in the light most favorable to the nonmoving party.”
Carraher v. Target Corp., 503 F.3d 714, 716 (8th Cir. 2007) (citations omitted).

      Weitz urged the district court to apply Iowa law to this tort claim, but the
Insurers advocated the application of Illinois law. Iowa recognizes an independent
cause of action for bad-faith denial. See United Fire & Cas. Co. v. Shelly Funeral
Home, Inc., 642 N.W.2d 648, 657 (Iowa 2002). Illinois does not maintain an
independent cause of action for bad faith. See Cramer v. Ins. Exch. Agency, 675
N.E.2d 897, 904 (Ill. 1996). However, an Illinois statute provides an extra-contractual
remedy for bad faith that piggybacks on a plaintiff’s action for breach of an insurance


Wausau, 470 F. Supp. 2d 873, 884 (C.D. Ill. 2007) (applying Illinois law and
enforcing provision requiring notice “as soon as practicable” after the “insurance
manager or other person designated by the named insured for that purpose has actual
knowledge of the occurrence”); Montgomery Ward & Co. v. Home Ins. Co., 753
N.E.2d 999, 1004 (Ill. App. Ct. 2001) (enforcing provision requiring notice “as soon
as possible after the accident has been brought to the notice of the insurance
department of the insured at its head office in Chicago”).
                                          -9-
contract. See 215 Ill. Comp. Stat. 5/155(1).5 Therefore, although Illinois and Iowa
law clearly conflict on this issue, both states provide a potential remedy for bad-faith
denial. Believing it unnecessary to conduct a choice-of-law analysis, the district court
concluded that Weitz’s claim “fail[ed] as a matter of law even under the [Iowa] case
law Weitz urges the court to apply.” Weitz Co., No. 4:04-cv-90353, slip op. at 24.
The district court never decided whether Weitz’s claim failed under Illinois law. On
remand, the court will need to determine which state’s law applies before Weitz’s bad-
faith denial claim goes to trial.

       Under Iowa law, “to establish a claim for [] bad faith, the insured must prove
two facts: (1) [] the insurer had no reasonable basis for denying benefits under the
policy and, (2) the insurer knew, or had reason to know, that its denial was without
basis. The first element is objective, the second subjective.” Shelly Funeral Home,
642 N.W.2d at 657 (citation omitted). However, “[b]ad faith may be inferred from a
flawed or inadequate investigation by the insurer.” Buhmeyer v. Case New Holland,
Inc., 446 F. Supp. 2d 1035, 1041 (S.D. Iowa 2006) (citing McIlravy v. N. River Ins.


      5
       215 Ill. Comp. Stat. 5/155(1) reads:

      In any action by or against a company wherein there is in issue the
      liability of a company on a policy or policies of insurance or the amount
      of the loss payable thereunder, or for an unreasonable delay in settling
      a claim, and it appears to the court that such action or delay is vexatious
      and unreasonable, the court may allow as part of the taxable costs in the
      action reasonable attorney fees, other costs, plus an amount not to exceed
      any one of the following amounts:

             (a) 60% of the amount which the court or jury finds such party is
             entitled to recover against the company, exclusive of all costs;
             (b) $60,000;
             (c) the excess of the amount which the court or jury finds such
             party is entitled to recover, exclusive of costs, over the amount, if
             any, which the company offered to pay in settlement of the claim
             prior to the action.
                                           -10-
Co., 653 N.W.2d 323, 333 (Iowa 2002)). “As such, ‘[i]t is appropriate, in applying
the test, to determine whether a claim was properly investigated and whether the
results of the investigation were subjected to a reasonable evaluation and review.’”
Id. (quoting Dolan v. Aid Ins. Co., 431 N.W.2d 790, 794 (Iowa 1988)).

       Viewing the evidence in the light most favorable to Weitz and drawing all
reasonable inferences therefrom, see Carraher, 503 F.3d at 716, we hold that the
district court erred in granting summary judgment for the Insurers on Weitz’s bad-
faith denial claim under Iowa law. Although it acknowledged that GAB did not
conduct an independent investigation of Weitz’s claim, the district court found that
this was “offset by Weitz’[s] failure to provide timely notice [of loss] to the Insurers
and GAB.” Weitz Co., No. 4:04-cv-90353, slip. op. at 25. This conclusion, of course,
was erroneous. See supra Part II (holding that Weitz gave timely notice of loss). The
court also emphasized that, in phone conversations with GAB, Hyatt described alleged
deficiencies in Weitz’s work, agreed with GAB’s finding of no coverage, and told
GAB that the claim would not be pursued. Finally, the court reasoned that further
investigation by GAB would not have been fruitful because Weitz had already
repaired the damage. However, the district court failed to acknowledge that GAB
never talked to anyone from Weitz about its claim or that, because of its deductible,
Hyatt had at least a $250,000 motive to recommend that coverage be denied.

       Though the alleged deficiencies in Weitz’s work may turn out, after trial, to
have been a reasonable basis for denying the claim, GAB’s exclusive reliance on
Hyatt’s representations is quite troubling in light of Hyatt’s financial incentives in this
case. When it found no genuine issue of material fact concerning Weitz’s bad-faith
denial claim, the district court failed to view the evidence, and the inferences that may
be reasonably drawn from it, in the light most favorable to Weitz—the nonmoving
party. See Carraher, 503 F.3d at 716.




                                           -11-
                                      IV.

       Accordingly, we reverse the district court’s decisions granting summary
judgment for the Insurers on Weitz’s claims for breach of contract and bad-faith
denial, and we remand for further proceedings consistent with this opinion.
                      ______________________________




                                     -12-
