Nationwide Mutual Insurance Company v. Kalvin Earl Richardson

United States Court of Appeals
For the Eighth Circuit
___________________________
No. 23-2905
___________________________
Nationwide Mutual Insurance Company
Plaintiff - Appellee
v.
Kalvin Earl Richardson
Defendant - Appellant
____________
Appeal from United States District Court
for the Eastern District of Missouri - St. Louis
____________
Submitted: April 10, 2024
Filed: July 16, 2024
____________
Before BENTON, GRASZ, and STRAS, Circuit Judges.
____________
BENTON, Circuit Judge.
Kalvin Earl Richardson applied for homeowner insurance from Nationwide
Mutual Insurance Company. Nationwide issued the policy, but after a fire damaged
the insured house, refused to pay. Nationwide asserted that Richardson had
misrepresented in his application that the house was not purchased at a public
auction. The district court agreed, granting summary judgment to Nationwide.
Nationwide Mut. Ins. Co. v. Richardson, No. 4:22-CV-8955, 2023 WL 4846613, at

-- 1 of 7 --

-2-
*7 (E.D. Mo. July 28, 2023). Richardson appeals. Having jurisdiction under 28
U.S.C. § 1291, this court reverses and remands.
In February 2022, Richardson purchased a house in St. Louis County,
Missouri, from the Collector of Revenue at a “Post Third Sale Offering.” A Post
Third Sale Offering occurs if a tax-delinquent property is not sold after three
consecutive annual tax-collection auctions. § 140.250, RSMo 2016. In St. Louis
County, a Post Third Sale Offering is a public electronic posting on the Collector’s
website. Bids are submitted to and processed by the Collector, subject to almost no
time or bidder limits. See § 140.250.3 (requiring the collector to offer the lands for
sale only once every five years); § 140.190.2 (allowing bids by taxpayers delinquent
on another property if they acknowledge the delinquency in an affidavit; allowing
non-Missourians to bid if they submit to the state’s jurisdiction); State ex rel. Yoest
v. McEvoy, 529 S.W.3d 383, 386-87 (Mo. App. 2017) (holding that tax sales are
open to all members of the public, except for the two categories in § 140.190.2). The
Collector deeds the property to the highest bidder who satisfies the property’s
delinquent taxes. § 140.250.4.
Richardson then applied for homeowner insurance from Nationwide. The
application asked, “Was the property purchased at public auction, as a short sale, or
while in foreclosure?” Richardson answered, “No.” Richardson signed the
application, indicating he had read it, all his statements there were true, and he
understood that his policy may be null and void if the information there was false
and misleading, whether intentional or unintentional. Nationwide issued Richardson
a homeowner policy.
Three months later, a fire damaged the house. Richardson submitted a claim.
Investigating, Nationwide learned for the first time that he had purchased the house
at a Post Third Sale Offering. Believing that it was a “public auction,” Nationwide
concluded he had made a material misrepresentation on his application. Nationwide
sued and won summary judgment. The district court ruled that the house was
purchased at a public auction, that Richardson’s contrary representation on his

-- 2 of 7 --

-3-
application was a material misrepresentation, and that the insurance policy was
therefore void ab initio. Nationwide, 2023 WL 4846613, at *7.
“This court reviews de novo a grant of summary judgment.” Torgerson v.
City of Rochester, 643 F.3d 1031, 1042 (8th Cir. 2011) (en banc). The question is
whether the record, viewed most favorably to the non-moving party, shows no
genuine issue of material fact and that the moving party is entitled to judgment as a
matter of law. Id., citing Fed. R. Civ. P. 56(c)(2).
Addressing the only issue Richardson appeals, Nationwide argues that it met
its burden to show that an ordinary Missourian would understand that a Post Third
Sale Offering of a tax-delinquent house is a public auction, and thus that Richardson
made a false representation in his application for insurance. See Central Bank of
Lake of the Ozarks v. First Marine Ins. Co., 975 S.W.2d 222, 225 (Mo. App. 1998)
(a material misrepresentation in an application generally voids the policy); Allen v.
Bryers, 512 S.W.3d 17, 35 (Mo. banc 2016) (“Insurer bears the burden of proving
[the insured] made a material misrepresentation in his application for insurance.”).
The term “public auction” is not defined in Nationwide’s insurance
application. Language in an insurance application is interpreted the same way as
language in an insurance policy. See Farm Bureau Town & Country Ins. of Mo. v.
Hilderbrand, 926 S.W.2d 944, 947 (Mo. App. 1996). “When interpreting the
language of an insurance contract, this Court gives the language its plain meaning.”
Shahan v. Shahan, 988 S.W.2d 529, 535 (Mo. banc 1999), citing Farmland Indus.,
Inc. v. Republic Ins. Co., 941 S.W.2d 505, 508 (Mo. banc 1997). The plain meaning
of an undefined term in an insurance policy is the “meaning which would be attached
by an ordinary person of average understanding if purchasing insurance.” Axis
Surplus Ins. Co. v. TriStar Cos., LLC, 94 F.4th 767, 769 (8th Cir. 2024), quoting
Seeck v. Geico Gen. Ins. Co., 212 S.W.3d 129, 132 (Mo. banc 2007).
Nationwide relies mostly on dictionary definitions of “public” and “auction.”
See Nationwide, 2023 WL 4846613, at *4 (emphasizing definitions of “auction” in

-- 3 of 7 --

-4-
the Merriam-Webster Dictionary (“a sale of property to the highest bidder”);
Dictionary.com (“a publicly held sale at which property or goods are sold to the
highest bidder”); and Collins Dictionary (“a public sale where items are sold to the
person who offers the highest price”)). Even assuming the Missouri Supreme Court
would consider these definitions,1 they, by the superlative “highest bidder” and
“highest price,” do not tell the average Missourian that the one-bid, one-price Post
Third Sale Offering is a public auction—as demonstrated by the fact that one of the
definitions just quoted is followed by an “American English” definition that focuses
on a “series of competing bidders.” See Auction, Collins Dictionary,
https://collinsdictionary.com/dictionary/english/auction (defining “auction” as a
“public sale at which items are sold one by one, each going to the last and highest of
a series of competing bidders”) (last visited July 8, 2024).
Nationwide discusses several cases defining “auction.” See Nationwide, 2023
WL 4846613, at *5. The Missouri Supreme Court has recognized a definition of
“auction” that concludes: “competition among a number of bidders is a necessary
element” of a public auction. ABC Liquidators, Inc. v. Kansas City, 322 S.W.2d
876, 882 (Mo. 1959) (addressing the meaning of “public auction” in a city ordinance
prohibiting them on Sundays). The court also quoted another definition that
concludes: “Competitive bidding, up or down,” is “an essential element of an auction
sale.” Id., citing B. H. Stief Jewelry Co. v. Walker, 256 S.W.2d 392, 397 (Tenn. Ct.
App. 1952). See also Springer v. Kleinsorge, 83 Mo. 152, 163 (Mo. 1884) (a public
auction means that “the highest bidder in a fair and open competition” gets the
1 The parties ignore that the Missouri Supreme Court discourages “dictionary
shopping,” instead favoring Webster’s Third New International Dictionary as “the
institutional dictionary of choice.” See AAA Laundry & Linen Supply Co. v. Dir.
Of Revenue, 425 S.W.3d 126, 132 (Mo. banc 2014). See generally Exotic Motors
v. Zurich Am. Ins. Co., 597 S.W.3d 767, 772-73 (Mo. App. 2020) (discussing
Missouri’s decades-old practice, its rationale, and its benefits). Webster’s Third
defines “auction” as “a public sale of property to the highest bidder (as by successive
increased bids).” Webster’s Third New Int’l Dictionary 142 (2002). Like the
definitions in text, this definition does not clearly include the Post Third Sale
Offering.

-- 4 of 7 --

-5-
property); Boatman’s Nat’l Bank v. Eidson, 796 S.W.2d 920, 923 (Mo. App. 1990)
(“Competitive bidding refers to the basic concept of an auction, that is, knowledge
of the highest bid with an opportunity to bid higher”); Boulevard Bank v. Malott,
397 S.W.3d 458, 464 n.3 (Mo. App. 2013) (An auction occurs when bidders “have
‘knowledge of the highest bid with an opportunity to bid higher’”). These cases,
emphasizing competition among bidders, undermine Nationwide’s position that an
ordinary Missourian would understand that the Post Third Sale Offering, with no
competition among bidders, is a public auction. Cf. Bruner v. Stevenson, 73 S.W.2d
413, 414 (Mo. App. 1934) (an auction can be “public” even if there is only one
bidder).
The Missouri statutes on tax-collection sales—most of which were not even
cited to the district court—do not clearly classify the Post Third Sale Offering. True,
section 140.984.5 includes the Post Third Sale Offering as an “auction.” See §
140.984.5, RSMo Supp. 2019 (including a Post Third Sale Offering (which is under
§ 140.250.4) as a “delinquent land tax auction” in the Land Bank Act (City of St.
Joseph)). See generally Bratcher v. Farmers Ins. Co., Inc., 94 F.4th 734, 738 (8th
Cir. 2024) (holding that a statute can be one that an ordinary Missourian of average
understanding should know). The other tax-collection statutes, however, distinguish
the Post Third Sale Offering from the three earlier public auctions. Compare §
140.250.4 (defining the Post Third Sale Offering as a “sale” four times), with §§
140.170.3 (identifying the first three annual sales as a “public auction”); § 140.230.2
(referring to the first three annual sales as a “delinquent land tax auction”); §
140.405.1 (distinguishing the Post Third Sale Offering from a “delinquent land tax
auction”).
Nationwide emphasizes that the “Post Third Sale Bid Form” Richardson used
is labeled as a “Bid Form” and makes multiple references to “bid,” “bidder,” and
even “highest bidder.” However, the Form does not say “public auction” or
“auction.” See St. Louis County Dept. of Revenue Website,
https://stlouiscountymo.gov/st-louis-county-departments/revenue/collector-of-
revenue/post-third-sale-offerings/post-3rd-sale-bid-form/ (last visited July 8, 2024).

-- 5 of 7 --

-6-
Most relevant here, another document on the website, “Post Third Sale Properties
Instructions,” states: “The bidding process for Post Third Sale Properties does not
involve a public auction but utilizes random bids exclusively.” Id.,
https://stlouiscountymo.gov/st-louis-county-departments/revenue/collector-of-
revenue/post-third-sale-offerings/post-third-sale-instructions/ (last visited July 8,
2024) (emphasis added).2
Nationwide focuses on an affidavit by the Collector’s manager of Post Third
Sale Offerings. See Nationwide, 2023 WL 4846613, at *4. The manager swears,
“The sale of Post Third Sale Offerings represents an ongoing public auction wherein
bids are continuously solicited and processed.” However, less than one month after
making that affidavit, the manager made a second affidavit averring, “The sale of
Post Third Sale Offerings represents an ongoing public bidding process wherein bids
are continuously solicited and processed, not a one-day public auction like those
conducted for the first through third sales.” (Emphasis added).
Under Missouri law, the representation in an insurance application must be
“false in fact” in order to be a misrepresentation. New York Life Ins. Co. v.
Calhoun, 97 F.2d 896, 898 (8th Cir. 1938), citing, e.g., Kirk v. Metropolitan Life
Ins. Co., 81 S.W.2d 333, 342 (Mo. 1935). See also Allen, 512 S.W. 3d at 35 (listing
requisites for a material misrepresentation claim, beginning “that a representation is
… false”). None of Nationwide’s authorities—the dictionary definitions, the case
and statutory law, or the guidance from the Collector’s website and manager—meet
its burden to show that Richardson’s representation was false in fact. Nationwide
was not entitled to summary judgment.
* * * * * * *
2 These instructions were, again, not cited to the district court. The parties
acknowledged at oral argument on appeal that this court could take judicial notice
of them. See Stutzka v. McCarville, 420 F.3d 757, 760 n.2 (8th Cir. 2005) (noting
that this court may take judicial notice of public records).

-- 6 of 7 --

-7-
The judgment of the district court is reversed, and the case remanded for
proceedings consistent with this opinion.
______________________________

-- 7 of 7 --