                  United States Court of Appeals
                             For the Eighth Circuit
                         ___________________________

                                 No. 13-1986
                         ___________________________

   Crystal D. Kilcher; Daniel J. Kilcher; Anthony C. Muellenberg; Anthony C.
   Muellenberg, as Trustee of the Troy D. Muellenberg 2007 Revocable Trust

                        lllllllllllllllllllll Plaintiffs - Appellees

                                            v.

                           Continental Casualty Company

                       lllllllllllllllllllll Defendant - Appellant
                                       ____________

                     Appeal from United States District Court
                    for the District of Minnesota - Minneapolis
                                   ____________

                           Submitted: December 17, 2013
                               Filed: April 3, 2014
                                  ____________

Before WOLLMAN, LOKEN, and KELLY, Circuit Judges.
                         ____________

WOLLMAN, Circuit Judge.

       Continental Casualty Company (Continental) appeals from the district court’s
grant of summary judgment to Crystal Kilcher, Daniel Kilcher, and Anthony
Muellenberg, individually and as trustee of the Troy Muellenberg revocable trust
(collectively, Plaintiffs). The district court determined that the Plaintiffs had made
more than one claim against their former financial advisor, who was insured by
Continental under a professional liability insurance policy. Accordingly, the district
court held that the insurance policy’s $1 million coverage limit for a single claim did
not apply and that the Plaintiffs’ claims instead triggered the insurance policy’s
aggregate coverage limit of $2 million. We reverse.

                                   I. Background

                               A. Factual Background

       Crystal Kilcher, Daniel Kilcher, Anthony Muellenberg, and Troy Muellenberg
are siblings and members of the Shakopee Mdewakanton Sioux Community
(Community).1 Members of the Community become eligible to share in the profits
generated by the Community’s gaming enterprise when they turn eighteen years old.
Anthony testified that he received an annual distribution of approximately $1 million
in 2003 and that the distribution has decreased each year since then. Between 1999
and 2003, after each Plaintiff turned eighteen, their mother introduced them to Helen
Dale, a financial advisor and registered agent of Transamerica Financial Advisors,
Inc. (TFA). Crystal, the oldest sibling, began investing with Dale in 1999, followed
by Daniel in 2000, and twins Anthony and Troy in 2003.

      Dale gave similar advice to each Plaintiff, recommending the purchase of
whole life insurance policies and fixed annuities. At age eighteen, each Plaintiff
purchased a $10 million whole life insurance policy at Dale’s direction. The
premiums for those policies ranged from $5,000 to $6,000 per month. Crystal and
Daniel later purchased millions of dollars of whole life insurance on their spouses,
as well as $1 million whole life insurance policies on each of their children. Heeding


      1
        We note that Troy died in 2009 and that his trust is a party to this action. We
will refer to the siblings collectively as Plaintiffs. Consistent with the Plaintiffs’
briefs and in the interest of clarity, we will use the siblings’ first names.

                                         -2-
Dale’s advice, Crystal and Troy purchased supplemental insurance policies that
covered living expenses in the event that they became unable to work due to sickness
or injury. Dale recommended the supplemental insurance product, even though the
Plaintiffs’ primary source of income was the distribution they received from the
Community. Similarly, Dale recommended that Daniel purchase certain riders to his
life insurance policy that provided benefits that the Community would have provided
at no charge.

       Each Plaintiff also invested in various annuities that were subject to surrender
charges if funds were withdrawn before the annuity matured. According to the
Plaintiffs’ deposition testimony, the money invested in the annuities was inaccessible
and generated little interest, while the annuities charged high fees and were ill-suited
for the Plaintiffs’ investment goals. For example, when Daniel needed funds to
complete the remodeling of his home, he surrendered certain annuities and paid the
fees associated with doing so. Despite Daniel’s need for liquidity at that time, Dale
nonetheless purchased more of the same kind of annuities for him, an action Daniel
believes constituted churning by Dale.2

      The Plaintiffs continued to purchase insurance products from and continued to
make investments through Dale until mid-2007, when a financial advisor reviewing
Anthony’s portfolio discovered that his investments were unsuitable for his age,
background, and investment goals. The Plaintiffs then discovered that their portfolios
were similarly unsuitable for their respective situations.




      2
        We have said that “‘[c]hurning’ occurs when a broker, directing the volume
and frequency of trades, abuses his customer’s confidence for personal gain by
initiating transactions that are excessive in view of the character of the account and
the customer’s objectives as expressed to the broker.” Davis v. Merrill Lynch, Pierce,
Fenner & Smith, Inc., 906 F.2d 1206, 1211 n.3 (8th Cir. 1990).

                                          -3-
                            B. Procedural Background

       In December 2007, the Plaintiffs filed individual claims against Dale and TFA
with the Financial Industry Regulatory Authority (FINRA). They alleged, among
other things, that Dale had breached the fiduciary duty she owed to them, that she had
misrepresented the nature of the investments, and that she had sold them unsuitable
investments. The Plaintiffs alleged that the investments were unsuitable because they
were not sufficiently liquid, were subject to significant transaction costs, and had
been sold to generate high commissions for Dale. The FINRA arbitration
proceedings were consolidated by agreement of the parties. In July 2008, the
arbitration panel determined that certain claims were ineligible for submission and
dismissed other claims. The Plaintiffs eventually withdrew their claims from
arbitration.

      In March 2008, each Plaintiff served Dale and TFA with complaints for
lawsuits venued in state district court. In August 2008, the Plaintiffs filed a joint
amended complaint against Dale and TFA in Hennepin County District Court. The
amended complaint alleged claims of churning, breach of fiduciary duty,
unsuitability, misrepresentation, and violations of federal and state securities laws.
The action was later dismissed. In December 2009, the Plaintiffs filed one lawsuit
in Scott County District Court. They alleged six counts against Dale: breach of
fiduciary duty, unsuitability, negligent misrepresentation, fraudulent
misrepresentation, fraud, and violations of state securities laws.3

    Dale moved for summary judgment, and the Plaintiffs moved for partial
summary judgment. In support of their motion, the Plaintiffs submitted expert



      3
        According to the Scott County District Court’s order, the Plaintiffs and TFA
settled their dispute while the motions for summary judgment were pending.

                                         -4-
evidence.4 Their expert opined that the investments recommended by Dale were
unsuitable and that Dale had failed to act in the Plaintiffs’ best interests. The expert
explained that the $10 million whole life insurance policies were inappropriate
because the Plaintiffs had no dependents when they purchased the policies. The
policies thus offered little benefit to the Plaintiffs and came at a substantial cost to
them, by way of pricey premiums and fees. According to the expert, term life
insurance policies would have been more suitable because such policies would have
been less expensive and would have offered more flexibility. The sale of whole life
insurance policies generated a higher commission for Dale, however, than the sale of
term life insurance policies would have generated. The expert further testified that
the annuities Dale sold to each Plaintiff had significant surrender charges and policy
expenses. Moreover, Dale sold multiple contracts to each Plaintiff, rather than
applying funds to their existing annuities, a practice that allowed Dale to generate
additional commissions. Ultimately, the expert opined that:

      [Dale] oversold the insurance products and failed to act in the Plaintiffs’
      best interests by focusing on individual product sales (which generated
      substantial commissions for the Defendants) while failing to employ
      proper asset allocation and product diversification techniques. This
      caused the Plaintiffs to struggle with liquidity issues, frustration with
      administrating the large number of individual products, higher
      commissions and internal investment expenses than otherwise should
      have been paid, failed to adequately meet time horizon requirements,
      and led to poor financial outcomes.

Plaintiffs’ accounting expert determined that the Plaintiffs had suffered distinct
damages, together totaling almost $4 million.



      4
       The summary of expert evidence that follows relies on both affidavits and
deposition testimony. It appears that the parties did not submit the deposition
testimony to the Scott County District Court.

                                          -5-
       In January 2012, the Scott County District Court denied Dale’s motion for
summary judgment and granted, in part, Plaintiffs’ motion. It held that Dale owed
a fiduciary duty to the Plaintiffs, but it did not decide whether Dale had breached that
duty. In May 2012, the parties entered into a settlement agreement, wherein
Continental agreed to pay $1 million under the policy, less Dale’s defense costs, and
the Plaintiffs agreed to dismiss with prejudice the action against Dale that was
pending in Scott County. The parties entered into the functional equivalent of a
Miller-Shugart agreement,5 the terms of which provided that Continental had satisfied
all claims that Plaintiffs had or may have had against Dale.

       The settlement agreement did not decide whether the Plaintiffs had submitted
one claim under the insurance policy or more than one claim. The settlement
agreement thus permitted the Plaintiffs to file a declaratory judgment action against
Continental so that the federal district court could decide the issue, which the
settlement agreement framed as follows: “Whether Plaintiffs’ claims against Dale
involve the same ‘Wrongful Acts’ and/or ‘Interrelated Wrongful Acts’ as defined by
the Policy.” If the Plaintiffs prevailed and the district court held that they had
submitted more than one claim, Continental agreed that it would pay an additional $1
million, the aggregate policy limit.

              C. The Insurance Policy and the District Court’s Order

      For the period from January 1, 2008, to January 1, 2009, Dale was insured by
Continental under a Life Agent/Broker Dealer Solutions Policy (the Policy). The


      5
        Miller v. Shugart provides that in some circumstances, “the insured may enter
into a settlement agreement with the claimant subject to the condition that the
claimant will only sue for the insurance proceeds to enforce the settlement.” Bob
Useldinger & Sons, Inc. v. Hangsleben, 505 N.W.2d 323, 325 n.2 (Minn. 1993)
(citing Miller v. Shugart, 316 N.W. 2d 729 (Minn. 1982)).

                                          -6-
Policy was a claims-made policy, meaning that it provided coverage for loss resulting
from “a Claim” first made and reported during the Policy period for “a Wrongful Act”
in the rendering or failing to render professional services. Dale notified Continental
of the FINRA arbitration proceedings by correspondence dated January 3, 2008.6 The
Policy provided a maximum of $1 million in coverage per claim, with an aggregate
limit of $2 million.

      The only issue in this case is whether the Plaintiffs submitted more than one
claim against Dale. Under the Policy, “Claim” means:

             a.    a written demand for monetary damages, or
             b.    a civil adjudicatory or arbitration proceeding for monetary
                   damages,

      against an Insured for a Wrongful Act, including any appeal therefrom
      brought by or on behalf of or for the benefit of any Client.

The Policy further provides that “[m]ore than one Claim involving the same Wrongful
Act or Interrelated Wrongful Acts shall be considered as one Claim[.]” The Policy
defines Interrelated Wrongful Acts as “any Wrongful Acts which are logically or
causally connected by reason of any common fact, circumstance, situation, transaction
or event.” A Wrongful Act, in turn, means “any negligent act, error or omission
of . . . the Insureds in rendering or failing to render Professional Services.”

       The district court held that the relevant policy language was not ambiguous and
that the Plaintiffs had submitted more than one claim against Dale. The district court
acknowledged that some of the Plaintiffs’ claims were similar, but ultimately
determined that the “Plaintiffs’ claims are not ‘Interrelated Wrongful Acts’ as the

      6
        The parties do not dispute that the Policy applies, even though the Plaintiffs
filed their FINRA claims in December 2007.

                                         -7-
Policy defines that term. . . . Plaintiffs have parallel claims which do not necessarily
connect with each other.” D. Ct. Order of Apr. 1, 2013, at 11-12. The district court
relied on the following facts to conclude that the Plaintiffs had submitted more than
one claim: that each Plaintiff met with Dale separately, formed a unique relationship
with Dale, and invested individually; that each Plaintiff invested different amounts
and that not all Plaintiffs purchased the same policies or annuities; that Daniel
presented a churning claim, while the other Plaintiffs did not; that each Plaintiff
suffered losses in different amounts; and that each Plaintiff “would have to present
his or her own evidence to carry their respective burdens of proof.” Id. at 14.

       The district court determined that the Plaintiffs had stated at least two separate
claims because “Dale’s wrongful acts included selling insurance policies but also
unsuitable annuities; more broadly speaking, the wrongful acts claims involved
selling unsuitable investments but also churning.” Id. at 15.

       To find that Plaintiffs’ claims are causally or logically connected only
       by reason of Dale’s desire to generate commissions pushes the Policy’s
       language to unreasonable extremes. Absent such broad generalizations,
       however, Continental cannot identify a single action, decision, or other
       fact that reasonably encompasses, connects, or gives rise to all of
       Plaintiffs’ claims.

Id. at 17.

       On appeal, Continental argues that the district court erred in finding no logical
connection among the Plaintiffs’ claims. It contends that the Plaintiffs’ decision to
join their claims in a single action “compels the conclusion that their claims share
sufficient connections to deem them one Claim under the Policy.” Appellant’s Br.
25. Moreover, it argues that Dale allegedly breached the fiduciary duty she owed to
each Plaintiff in substantially the same way. Given the shared attributes of the



                                          -8-
Plaintiffs’ claims and the commonalities among the Plaintiffs themselves,
Continental’s argument goes, the claims were logically connected and thus
constituted only one claim under the Policy.

                                      II. Analysis

       We review de novo the district court’s grant of summary judgment. W3i
Mobile, LLC v. Westchester Fire Ins. Co., 632 F.3d 432, 436 (8th Cir. 2011). The
parties agree that there exists no material factual dispute, that Minnesota law governs
our interpretation of the Policy, and that the Policy’s language is unambiguous.
Accordingly, we must give the Policy its plain and ordinary meaning and decide
whether the Plaintiffs submitted one claim or more than one claim. See Thommes v.
Milwaukee Ins. Co., 641 N.W.2d 877, 880 (Minn. 2002) (“When the language of an
insurance contract is unambiguous, it must be given its plain and ordinary meaning.”).

       On appeal, Continental frames the issue as whether the Plaintiffs’ four
claims—one for each Plaintiff—involve interrelated wrongful acts. Continental
argues that we should group Dale’s wrongful acts by Plaintiff and then determine
whether there exists a logical connection between the set of wrongful acts each
Plaintiff has alleged. The Plaintiffs argue that Continental has ignored the Policy’s
language that defines the term “Claim” to be “a Wrongful Act.” According to the
Plaintiffs, one wrongful act constitutes one claim and each Plaintiff has alleged more
than one wrongful act and thus has submitted more than one claim.

       As relevant to this case, a Claim is “a civil adjudicatory . . . proceeding” against
the insured for “a Wrongful Act” brought by “any Client.” Continental interprets the
Policy to limit each client to only one claim brought in their joint civil adjudicatory
proceeding. The Policy, however, does not refer to wrongful acts or to interrelated
wrongful acts in its definition of claim. Instead, the Policy explains in a different



                                           -9-
section that “[m]ore than one Claim involving . . . Interrelated Wrongful Acts shall
be considered as one Claim[.]” We thus decline to read the Policy as categorically
limiting each Plaintiff to one claim. Accordingly, to determine whether the Plaintiffs
have submitted more than one claim, we must consider Dale’s wrongful acts and
decide whether they constitute interrelated wrongful acts.

       The Plaintiffs argue that they have submitted more than one claim because Dale
committed more than one wrongful act. Although the Plaintiffs have not enumerated
exactly how many different wrongful acts Dale committed, they set forth in their brief
a table that lists claims based on $10 million whole life insurance policies, life
insurance on children, life insurance on spouses, supplemental insurance policies,
annuities, and churning. They contend that “the improper sale of whole life insurance
policies . . . has nothing to do with improper sale of fixed annuities” and that offering
unsuitable investments is separate from a claim for churning. Appellees’ Br. 53. For
its part, Continental did not list each of Dale’s wrongful acts, focusing instead on the
similarities of the Plaintiffs and their proceedings against Dale.

       The Minnesota Supreme Court has not considered policy language defining the
term “Interrelated Wrongful Acts” as Continental’s policy does, but we find
instructive its interpretation of the word “related” set forth in American Commerce
Insurance Brokers, Inc. v. Minnesota Mutual Fire and Casualty Co., 551 N.W.2d 224
(Minn. 1996). In that case, an employee had engaged in 155 acts of embezzlement,
either by issuing unauthorized checks to herself or by taking the funds customers had
paid for their insurance premiums. The employer filed a claim with its insurer, which
provided coverage for losses resulting from employee dishonesty. The policy
provided for $10,000 in coverage for each occurrence, with a “series of related acts”
constituting one occurrence. The court defined the word “related” as “cover[ing] a
very broad range of connections, both logical and causal.” Id. at 228. It held that “a
court may consider several factors in concluding whether dishonest acts are part of



                                          -10-
a ‘series of related acts,’ including whether the acts are connected by time, place,
opportunity, pattern, and, most importantly, method or modus operandi.” Id. at 231.
While the opinion warned against “micro-distinguishing[,]” id. at 230, it likewise
cautioned that “at some point ‘a logical connection may be too tenuous reasonably to
be called a relationship[,]’” id. at 228 (quoting Gregory v. Home Ins. Co., 876 F.2d
602, 606 (7th Cir. 1989)). The court ultimately concluded, as a matter of law, that two
occurrences arose under the circumstances of the case because the employee had
embezzled money via two distinct methods.

        The Policy adopted American Commerce’s definition of the term “related,” in
that it requires a logical or causal connection for wrongful acts to be interrelated. The
Policy’s language, however, is even broader, in that wrongful acts are interrelated if
they are logically related “by reason of any common fact, circumstance, situation,
transaction or event.” (emphasis added). Plaintiffs’ claims share the fact that the
wrongful acts were committed by Dale, whose motive was to generate commissions.
Dale’s wrongful acts, in turn, are logically related by reason of the following common
facts and circumstances. Each Plaintiff presented the same opportunity to Dale: a
young, unsophisticated investor who began earning a significant income and whose
mother had introduced Dale as a financial advisor. As time passed and each
Plaintiff’s relationship with Dale grew, the Plaintiffs continued to present the same
opportunity to Dale: an investor who trusted Dale to act in his or her best interest.
Dale also engaged in the same method or modus operandi, advising each Plaintiff to
purchase unsuitable whole life insurance policies and unsuitable annuities.

       Plaintiffs urge us to hold that the acts of selling whole life insurance policies
to the Plaintiffs are not related to the acts of selling whole life insurance policies to
Crystal and Dan for their children and spouses or to the acts of selling supplemental
insurance policies to Crystal and Troy. We conclude that doing so, however, would
constitute the type of “micro-distinguishing” the Minnesota Supreme Court warned



                                          -11-
would “subvert[] the purpose of the phrase ‘series of related acts[.]’” Am. Commerce
Ins. Brokers, Inc., 551 N.W.2d at 230. We also conclude that the offering of
unsuitable investments is logically connected to the churning claim, which resulted
from Dale’s advice that Daniel purchase inappropriate annuities, while she
simultaneously liquidated similarly inappropriate annuities on Daniel’s behalf.

       The Plaintiffs dispute that the commonalities between their claims constitute
a meaningful logical connection, but as they were seeking to establish their breach
of fiduciary duty claim against Dale in Scott County District Court, they argued that
Dale took advantage of the same opportunity with each Plaintiff and had engaged in
the same pattern of deception with each Plaintiff:

      [Plaintiffs] have provided testimony regarding how they came to Dale
      at 18, financially uneducated; that Dale convinced them to invest in
      certain products; that they invested in those products because of their
      implicit trust in Dale; that Dale lied to them about how she would be
      paid, and deceived them regarding the penalties attached to their
      annuities; and that they discovered in May of 2007 . . . that Dale’s
      investments were extremely unsuitable—but unsurprisingly, extremely
      commission-heavy.

Similarly, the Plaintiffs’ expert opined that Dale had breached her fiduciary duty to
the Plaintiffs in the same way, emphasizing the Plaintiffs’ youth, lack of
sophistication, and substantial annual income and net worth. Although Dale made
different alleged misstatements, omissions, and promises on different dates to each
Plaintiff, there nonetheless exists a logical connection between her wrongful acts.

      We recognize that this is an unfavorable outcome for the Plaintiffs, who trusted
Dale and to whom she owed a fiduciary duty. We are not sitting in judgment of Dale,
however. We are charged instead with interpreting the language of Dale’s
professional liability insurance policy, which defined the term “Interrelated Wrongful


                                        -12-
Acts” to mean acts that are “logically . . . connected by reason of any common fact
[or] circumstance[.]” That Dale harmed each Plaintiff individually and uniquely is
not enough to overcome the Policy’s broad language.

                                 III. Conclusion

       The judgment is reversed, and the case is remanded to the district court for
entry of judgment in favor of Continental.
                       ______________________________




                                       -13-
