BatesCarey partner Agelo Reppas and associate Schuyler Davis secured a unanimous victory before the United States Eighth Circuit Court of Appeals on behalf of United States Liability Insurance Company (USLI). The court affirmed summary judgment in USLI’s favor, holding that it had no duty to indemnify an underlying consent judgment entered against USLI’s insured, an insurance broker. United States Liab. Ins. Co. v. Stone Cnty. Ins. Agency Inc, No. 25-1699, 2026 WL 1283372 (8th Cir. May 11, 2026) (applying Arkansas law).

The dispute arose when the broker failed to pay a homeowners’ insurance premium on behalf of its clients, mistakenly believing the payment had been made in full. The payment was actually $78 short.

Although the homeowners’ insurer had already issued the policy and sent multiple overdue notices, the broker failed to respond or pay the shortfall. After the homeowners’ insurer cancelled the policy for nonpayment, the broker’s clients’ house burned down. The broker’s clients sued the broker for their now uninsured losses and entered into a consent judgment and assignment-of-rights.  

In the ensuing coverage action, the clients sought to collect the consent judgment from USLI, the broker’s professional liability insurer. The district court found, and the Eighth Circuit ultimately agreed, that coverage was precluded under Exclusion D, which is applicable to “the commingling of, or inability or failure to pay, collect, safeguard or return any money.” The homeowners argued that the exclusion did not apply to the broker’s liability for misrepresenting that the premium had been paid in full, failing to notify them of the overdue notices, and failing to pay the overdue notices to prevent cancellation. Both the district court and the Eighth Circuit rejected the argument, finding that the exclusion encompassed all such conduct, as it flowed directly from the excluded “failure to pay” conduct. 

USLI retained BatesCarey’s Appellate Group to defend the district court’s favorable judgment. Agelo and Schuyler drafted the winning brief. Upon review of the parties’ submissions, the Eighth Circuit denied the homeowners’ request for oral argument and unanimously affirmed. 

Click here for the opinion.