United States Court of Appeals
                           FOR THE EIGHTH CIRCUIT

      ___________

      No. 08-2848
      ___________

American Home Assurance Company,        *
                                        *
              Appellee,                 *
                                        *
      v.                                *
                                        *
Kelly Pope,                             *
                                        *
              Appellant.                *

      ___________
                                            Appeals from the United States
      No. 08-2853                           District Court for the Western
      ___________                           District of Missouri.

American Home Assurance Company,        *
                                        *
              Appellee,                 *
                                        *
      v.                                *
                                        *
C. Robert Buckley, appointed as legal   *
representative of Bruce N. Strnad,      *
a deceased individual,                  *
                                        *
              Appellant.                *
                                      __________

                               Submitted: February 11, 2009
                                  Filed: January 11, 2010
                                   ___________

Before RILEY, SMITH, and SHEPHERD, Circuit Judges.
                             ___________

RILEY, Circuit Judge.

       This appeal arises from a summary judgment granted in favor of American
Home Assurance Company (American Home) in a suit against Kelly Pope (Kelly) and
C. Robert Buckley (Buckley). American Home filed a diversity suit seeking a
declaration it was not liable under a professional liability insurance policy for the acts
of Dr. Bruce N. Strnad (Dr. Strnad), who was a named insured under the policy. This
case is before us on appeal for the third time. See Am. Home Assurance Co. v. Pope,

(8th Cir. 2004) (American Home I); Am. Home Assurance Co. v. Pope,

(8th Cir. 2007) (American Home II). In American Home 

, we remanded for the district court to determine whether an exclusion in the
policy exempted American Home from liability under the policy, and if not, whether
Kelly was entitled to indemnification from American Home. The district court
determined the policy exclusion applied, granted summary judgment to American
Home, and declined to decide the second issue. We reverse.

I.    BACKGROUND
      A.    Factual History
      In 1979, when Kelly was three years old, she was placed in foster care with
Lester and Nancy Pope. One year later, Lester began sexually molesting Kelly.
Lester and Nancy adopted Kelly in 1981, and the sexual abuse continued until 1989,
when Kelly was thirteen years old. In 1988, Nancy discovered evidence of the abuse
and questioned Kelly. Kelly told Nancy that Lester had been molesting her. Nancy


                                           -2-
arranged a meeting with Nancy’s psychologist, Dr. Strnad, and his business partner,
Dr. Joel Ray (Dr. Ray), to discuss the accusation. During this meeting, Nancy
disclosed to Dr. Strnad her belief Lester was sexually abusing Kelly. Nancy asked Dr.
Strnad not to report Lester’s sexual abuse to anyone, and Dr. Strnad agreed. Dr.
Strnad also agreed to begin counseling Lester.

       After the meeting, Nancy confronted Lester about the abuse. Lester admitted
he had sexually abused Kelly and agreed to counseling with Dr. Strnad. Lester
attended counseling with Dr. Strnad and again confessed he had sexually abused
Kelly. Lester quit therapy after four more sessions and the abuse of Kelly continued.
Neither Dr. Ray nor Dr. Strnad notified officials about the abuse, even though both
doctors were obligated by law to report suspected child abuse to the Missouri Division
of Family Services. See Mo. Rev. Stat. §§ 210.115.1, 210.165.1. Both doctors also
failed to warn anyone in a position to protect Kelly that Lester had stopped attending
therapy or that Lester continued to threaten Kelly’s safety.

        During this time, Drs. Ray and Strnad were insured by American Home under
a professional liability insurance policy for psychologists. The insurance contract
stated American Home would pay “all sums which the Insured shall become legally
obligated to pay as damages because of any wrongful act committed” in the course of
the doctors’ “professional services,” as well as the cost of defending a suit for such a
wrongful act. The policy defined a “[w]rongful act” as “any actual or alleged
negligent act, error, or omission, or any actual or alleged defamation.” The insurance
contract also contained several exclusions from coverage. One exclusion denied
coverage for liabilities resulting from “any wrongful act committed with knowledge
that it was a wrongful act.” Another exclusion denied coverage for criminal acts.

      In April 1989, Nancy and Lester divorced. Nancy never disclosed Lester’s
sexual abuse of Kelly during the divorce proceedings, and Lester continued to
sexually abuse Kelly. During the summer of 1989, Kelly told Nancy that Lester had

                                          -3-
performed a sex act on her. Nancy did not seek any help for the abuse until December
1989. At that time, Nancy took Kelly to see Lynn Ogden (Ogden), a social worker
employed in the same office as Drs. Ray and Strnad. Nancy sought help with Kelly’s
emotional issues stemming from the abuse. When Ogden learned of the abuse, she
promptly reported the abuse to the Missouri Division of Family Services as required
by Missouri law. Health officials determined Kelly had been physically and
psychologically traumatized as a result of Lester’s molestation over a period of ten
years. Kelly was removed from the home, and Lester was charged with three counts
of sodomy and one count of attempted rape. Lester pled guilty to one count of
sodomy and served five years in prison. Dr. Strnad avoided prosecution for failing
to report the abuse by testifying at Lester’s sentencing hearing in exchange for a grant
of immunity.

       B.     Procedural History
       In 1991, Norma Bradley (Bradley) filed a lawsuit in Missouri state court on
behalf of Kelly, a minor child. The complaint alleged, among other claims, (1) Drs.
Ray and Strnad were negligent per se in violating the Missouri mandatory reporting
statute, and (2) Drs. Ray and Strnad breached a common law duty to warn of Lester’s
continued danger to Kelly’s safety. The Missouri state trial court dismissed the
claims.

        The Missouri Court of Appeals upheld the trial court’s dismissal of the
negligence per se claim, but reversed the trial court’s dismissal of the common law
failure to warn claim. See Bradley v. Ray, 

, 305 (Mo. Ct. App. 1995).
In so holding, the court of appeals recognized a common law duty to warn on the part
of treating psychologists, in accord with the vast majority of other jurisdictions. See

The Missouri court explained,

      when a psychologist or other health care professional knows or pursuant
      to the standards of his profession should have known that a patient


                                          -4-
      presents a serious danger of further violence to a readily identifiable
      victim, the psychologist has a duty under Missouri common law to warn
      the intended victim or communicate the existence of such danger to those
      likely to warn the victim including notifying appropriate enforcement
      authorities.

Court of Appeals then remanded the case for the trial court to
determine whether Drs. Ray and Strnad breached their common law duty to warn. 

unexplained by the parties, Bradley failed to pursue the case on Kelly’s
behalf, and the trial court dismissed the case without prejudice in 1998. In 1999,
Kelly re-filed the case on her own behalf, and included a failure to warn claim against
Dr. Ray and an unnamed defendant ad litem for Dr. Strnad, who was then deceased.
Dr. Strnad’s widow, Donna Strnad, was eventually appointed defendant ad litem.

       When the suit was initially filed, American Home provided a defense for both
Dr. Ray and Donna Strnad as defendant ad litem. On April 2, 2002, American Home
sent Dr. Ray and Donna Strnad a letter in which American Home agreed to defend and
indemnify Dr. Ray, but refused to defend further or indemnify Dr. Strnad’s estate.
The following day, American Home filed suit against Kelly and Donna Strnad in the
United States District Court for the Western District of Missouri, seeking a judgment
declaring American Home had no duty to defend or indemnify Dr. Strnad’s estate
because, among other reasons, Dr. Strnad’s conduct was subject to policy exclusions.
American Home argued, because Dr. Strnad violated Missouri’s mandatory reporting
statute and engaged in knowingly wrongful conduct, the policy exclusions for claims
arising out of criminal conduct and knowingly wrongful acts should apply.

      One week after American Home filed the declaratory judgment action, Kelly
reached an agreement with Donna Strnad. The relevant terms of the agreement
provided (1) Kelly would no longer seek damages against Dr. Strnad’s estate, but
would only pursue recovery from American Home; (2) Buckley would replace Donna
Strnad as defendant ad litem; (3) Kelly and Buckley would submit the dispute to

                                         -5-
binding arbitration before a panel of retired Missouri judges; (4) Buckley would not
object to any evidence Kelly presented to the panel; and (5) the panel would only need
to determine whether Dr. Strnad was negligent and would not be required to provide
a further basis for its ruling.

       The case then proceeded in three separate actions: (1) Kelly’s state court action
against Dr. Ray, (2) Kelly’s state arbitration proceeding against Buckley as defendant
ad litem for Dr. Strnad, and (3) American Home’s federal declaratory judgment action
against Kelly and Buckley. Kelly’s state court action against Dr. Ray was tried in
September of 2003. The sole issue in Kelly’s suit against Dr. Ray was whether Dr.
Ray was vicariously liable for the negligent acts and omissions of his partner, Dr.
Strnad. The jury found for Kelly and awarded $5 million in damages against Dr. Ray.

        A few months later, in early 2004, the case against Dr. Strnad was submitted
to arbitration. American Home refused to defend Dr. Strnad and did not take part in
the arbitration. The parties submitted, and stipulated to, the record from Dr. Ray’s
trial as the evidentiary record in the arbitration proceeding. The arbitrators found for
Kelly and awarded $8 million in damages. Kelly submitted the arbitration award to
the state trial court. In a single order, the state court entered judgment upon the jury
verdict against Dr. Ray and the arbitration award against Dr. Strnad, and assessed
prejudgment interest for a total award of more than $27 million.

      Dr. Ray appealed the judgment against him, and the Missouri Court of Appeals
affirmed on the basis of liability, but reversed and remanded to the trial court for a
new trial on the issue of damages because the jury received an exhibit related to
insurance coverage without a proper limiting instruction. See Pope v. Pope, 

, 464-66 (Mo. Ct. App. 2005) (en banc). Upon remand, the trial court did
not hold a new trial, but rather entered judgment against Dr. Ray in the amount of $8
million, plus prejudgment interest, based on the Dr. Strnad arbitration award. Dr. Ray
appealed this judgment, and on September 1, 2009, the Missouri Court of Appeals

                                          -6-
reversed and remanded with instructions to carry out the appellate court’s original
mandate, which was to have a new trial on the issue of damages.

       Meanwhile, in the federal declaratory judgment action, the district court granted
American Home’s motion for summary judgment, finding Dr. Strnad’s failure to
report Lester’s abuse amounted to a criminal act because it violated Missouri’s child
abuse reporting statute. The court concluded Dr. Strnad’s conduct fell within the
policy exclusion denying coverage for criminal acts, and therefore, Dr. Strnad’s estate
was not entitled to insurance coverage under the policy. This decision effectively
eliminated Kelly’s ability to collect on the judgment against Dr. Strnad because Kelly
previously had agreed not to seek judgment from the Strnad estate.

       In American Home 

, a panel of this court reversed. We
explained Kelly’s complaint contained two separate allegations against Dr. Strnad.
“First, [Kelly] alleged that [Dr. Strnad] violated Missouri law by failing to report
knowledge of Lester’s abuse to authorities.” 

We then noted, “To the
extent that Kelly asserted a private cause of action arising out of Dr. Strnad’s violation
of the criminal statute, Missouri has prohibited such an action.” 

n.7 (citing
Doe “A” v. Special Sch. Dist., 

, 1148 (E.D. Mo. 1986) (“‘[T]he
Missouri child abuse reporting statute creates a duty owed to the general public, not
to specific individuals, and consequently the statute does not support a private cause
of action in favor of individuals.’”)); see also 

.

       Kelly conceded the criminal act exclusion exempted Kelly from coverage under
the insurance policy on Kelly’s first claim, but maintained the district court failed to
consider Kelly’s second claim, that Dr. Strnad negligently failed to fulfill his common
law duty to warn Kelly, or someone else in a position to protect her, such as law
enforcement, that Lester had stopped attending therapy and was likely to continue
abusing Kelly. American Home 

. We agreed and held the district
court erred in concluding the criminal act exclusion applied to all of Kelly’s claims

                                           -7-
against Dr. Strnad, because the failure to warn some person or entity other than the
Missouri Division of Family Services was not a criminal act, but could amount to
breach of the common law duty to warn. See 

We explained,

             American Home has not cited any Missouri statute or case law
      making criminal the failure to warn the victim of the possibility of future
      abuse. Since American Home has failed to show how Dr. Strnad’s
      failure to report the future dangerousness for abuse to Kelly or her
      mother should fall within the exclusion, the coverage of the policy
      applies.

Union Fire Ins. Co. v. Structural Sys. Tech., Inc., 

, 761
(8th Cir. 1992) (declaring, under Missouri law, “the insurer has the burden of proving
the applicability of any exclusion upon which it relies”)).

       On remand, the district court granted summary judgment to Kelly and Buckley.
See Am. Home Assurance Co. v. Pope, No. 02-4057, 

, at *6 (W.D.
Mo. Oct. 13, 2005), rev’d 

(8th Cir. 2007). The district court cited our
broad statement in American Home I that “‘the coverage of the Policy applies,’” and
concluded American Home had a duty both to defend and to indemnify Dr. Strnad’s
estate for damages arising from Dr. Strnad’s negligent failure to warn Kelly, or
someone else in a position to protect Kelly, about Lester’s continued danger. 

       American Home appealed, and the case came before this court for a second
time. See American Home 

. In our decision, we began our analysis
“with a clarification of the matters we did and did not decide in American Home I.”

In American Home I, we held Kelly’s allegation of common law
negligence precluded a finding of summary judgment in favor of American Home and
required American Home to provide a defense to Dr. Strnad. 

We did not
resolve the separate issue of whether the common law failure to warn claim “was valid


                                         -8-
for the purpose of the duty to indemnify, however, because no fact-finding body had
ever considered the question of whether that claim or other claims were causally
linked to Kelly’s alleged damages.” 

result, we again remanded to the district court “for a factual determination
of whether, and to what extent, Strnad’s failure to warn [Kelly], her mother, or some
person or entity other than the Missouri Division of Family Services caused [Kelly’s]
injuries.” 

We then explained,

             On remand, American Home may also seek to prove that the
      “knowingly wrongful” policy exclusion applies to the claim for
      indemnification. As noted earlier, American Home’s duty to defend was
      the only issue before this court in American Home I, and the “knowingly
      wrongful” exclusion did not apply in that context because [Kelly] alleged
      only negligence and her allegations, on their face, were not subject to the
      exclusion. Those allegations, however, are relevant only to the duty to
      defend; determination of a duty to indemnify “must await the facts.”

Equip. Co. v. Md. Cas. Co., 

, 484 (Mo. Ct. App.
1998)). In concluding our opinion, we asked the district court to consider whether the
knowingly wrongful act exclusion applied, and if not, whether Dr. Strnad’s failure to
warn gave rise to Kelly’s damages. 

       On remand the district court granted summary judgment to American Home.
The district court found, “Dr. Strnad knew of his duty to report the sexual abuse to
authorities and warn others of Lester’s ongoing threat to Kelly, yet Dr. Strnad
intentionally concealed the abuse.” The district court held “Dr. Strnad’s conduct was
knowingly wrongful within the language of the policy exclusion,” and therefore,
American Home did not have a duty to indemnify Dr. Strnad. Kelly now appeals the
district court’s grant of summary judgment in favor of American Home.




                                          -9-
II.   DISCUSSION
      A.     Knowingly Wrongful Act Exclusion
      Kelly contests the district court’s finding that Dr. Strnad’s conduct was
knowingly wrongful within the language of the insurance policy.1 Because the policy
exclusion is ambiguous, we follow Missouri law and reverse.

       “The interpretation of a contract, including determining whether it is ambiguous
as written, is a question of law which we review de novo.” United States v. Brekke,

, 1049 (8th Cir. 1996) (citations omitted). In a diversity action, such as
this, we use state substantive law to govern our analysis. See Erie R. Co. v.
Tompkins, 

, 78 (1938). Thus, Missouri law controls our decision.

       “Where insurance policies are unambiguous, the rules of construction are
inapplicable, and absent a public policy to the contrary, the policy will be enforced as
written.” Krombach v. Mayflower Ins. Co., 

, 210 (Mo. 1992) (en
banc) (citations omitted). Language is ambiguous when there is uncertainty in the
meaning of words used in the contract, or when the contract terms are reasonably
subject to different interpretations. 

“follow a construction
favorable to the insured wherever the language of a policy is susceptible of two
meanings, one favorable to the insured, the other to the insurer.” Meyer Jewelry Co.
v. Ge. Ins. Co. of Am., 

, 623 (Mo. 1968) (citations omitted).
“Provisions restricting coverage are particularly construed most strongly against the
insurer.” Id.; see also 

(“Ambiguous provisions of
a policy designed to cut down, restrict, or limit insurance coverage already granted,
or introducing exceptions or exemptions must be strictly construed against the
insurer.” (citations omitted)). These rules of construction exist because (1) “insurance

      1
        American Home claims Kelly waived this claim because it was not raised in
the district court. The issue was raised by both Kelly and Buckley in the district court
in multiple filings, including an April 18, 2003 filing entitled, “Suggestions in Support
of Defendant’s Motion for Summary Judgment.”

                                          -10-
is designed to furnish protection to the insured, not defeat it,” and (2) “as the drafter
of the insurance policy, the insurance company is in the better position to remove
ambiguity from the contract.” 

.

       Two contract provisions are at issue in this case. The first is the provision
establishing the coverage American Home agreed to provide Drs. Ray and Strnad
under the policy. American Home agreed “to pay on behalf of the Insured all sums
which the Insured shall become legally obligated to pay as damages because of any
wrongful act committed during the policy period by the Insured . . . arising solely out
of the performance of professional services.” For purposes of this provision, the term
“wrongful act” is defined as “any actual or alleged negligent act, error, or omission,
or any actual or alleged defamation.” The second provision at issue excludes
coverage for “any wrongful act committed with knowledge that it was a wrongful
act.”

       The ambiguous nature of the contract becomes apparent when the conduct
expressly covered by the policy is compared and contrasted with the conduct
expressly excluded. First, the contract states it will insure damages resulting from a
“wrongful act,” defined, in relevent part, as “any actual or alleged negligent act, error,
or omission.” (emphasis added). Then, the contract excludes coverage for liabilities
resulting from a knowingly wrongful act. The parties provide two quite different
interpretations for this knowingly wrongful act exclusion.

       American Home asserts, because Dr. Strnad knew he had a duty to report and
violated that duty, Dr. Strnad committed a knowingly wrongful act, and his conduct
is expressly excluded under the policy. Kelly maintains the knowingly wrongful act
exclusion is an exclusion for intentional, not negligent, conduct which would require
a showing Dr. Strnad intended to harm Kelly or intended the harmful consequences
of his actions. See, e.g., Am. Family Mut. Ins. Co. v. Lacy, 

, 315 n.7
(Mo. Ct. App. 1991) (“In order for an act to be intentional for purposes of tort law as

                                          -11-
well as of exclusionary clauses in liability insurance policies . . . the actor must desire
to cause the consequences of the act, or the consequences must be substantially certain
to result.” (citations omitted)). We conclude the knowingly wrongful act exclusion
is reasonably subject to different interpretations, and we must follow the construction
most favorable to Kelly. See Meyer Jewelry 

.

       The American Home policy is a professional liability insurance policy which
insures negligent conduct, but American Home now attempts to exclude the knowing
breach of a duty, which breach is by its nature negligence. A negligence claim
necessarily requires a duty to act, that is, a duty known or presumptively known by
the defendant. See generally, L.A.C. ex rel D.C. v. Ward Parkway Shopping Ctr. Co.,

, 257 (Mo. 2002) (en banc) (“In any action for negligence, the plaintiff
must establish that the defendant had a duty to protect the plaintiff from injury, the
defendant failed to perform that duty, and the defendant’s failure proximately caused
injury to the plaintiff.” (internal marks and citations omitted)); Hoover’s Dairy, Inc.
v. Mid-America Dairymen, Inc., 

, 432 (Mo. 1985) (en banc)
(explaining “knowledge is an element that must [often] be included in a negligence
instruction in order to impose the existence of the claimed duty” (footnote omitted)).

       Further, Kelly’s underlying claim for insurance coverage of a judgment issued
on an award by an arbitration panel of three retired Missouri judges is based entirely
on Dr. Strnad’s negligence. Kelly holds a valid judgment explicitly arising from Dr.
Strnad’s negligence as found by the arbitration panel. American Home has not
challenged the arbitration action on collusion grounds or on any other grounds. As
a result, American Home is obligated to provide liability insurance for Dr. Strnad’s
negligent conduct, because the insurance policy covers any actual or alleged negligent
act.

      If we interpret the ambiguous contract provisions using the construction most
favorable to Kelly, as we must, the insurance policy exclusion for knowingly wrongful

                                           -12-
acts reasonably could be described as an exclusion for intentional misconduct. In Am.
Home Assurance Co. v. Stone, 

, 774 (N.D. Ill. 1994), the district
court explained a knowingly wrongful act exclusion, identical to the one at issue here,
was “an exclusion for intentional conduct,” and it was for a jury to decide whether the
charged conduct was negligent or intentional. In Kelly’s case, a fact-finding body has
already concluded Dr. Strnad’s conduct was negligent. In contrast, there has been no
finding of intentional misconduct which would satisfy Missouri’s requirement that an
insured intend, not only the act itself, but also the consequences. See White v. Smith,

, 507-08 (Mo. Ct. App. 1969) (“To entertain a contrary view would
work an exclusion from coverage of many, if not most, claims for damages arising out
of the negligence of insureds and thus defeat the primary purpose for which liability
insurance coverage is purchased.” (citations omitted)).

        The Sixth Circuit has also interpreted a professional liability insurance policy
similar to the one at issue here. Ill. Union Ins. Co. v. Shefchuk, 108 Fed. Appx. 294
(6th Cir. 2004) (unpublished per curiam). In Shefchuk, the insurer agreed to cover
liabilities resulting from “wrongful acts,” defined as “any negligent breach of
duty . . . or other negligent act.” 

The policy excluded wrongful acts which
were “dishonest, fraudulent, criminal, malicious or knowingly wrongful.” 

clause excluded “‘claims that [we]re both negligent and not negligent,’”
the court found the exclusionary provision was ambiguous, requiring it to be
construed against the insurer. 

(quoting the district court). The court held
the insurer “cannot avoid its duty to defend the claims in the underlying actions on the
ground that some of those claims appear to arise out of knowingly wrongful acts,
because such acts, by definition, are not negligent.” 

analysis can be
applied here.

       Similarly, in Steadfast Ins. Co. v. Stroock & Stroock & Lavan LLP, 277 F.
Supp. 2d 245, 252 (S.D.N.Y. 2003), a case cited by American Home, the district court
interpreted an exclusion in a professional liability insurance policy for claims “arising

                                          -13-
out of . . . knowingly wrongful . . . act[s].” The district court concluded, “The only
reasonable interpretation of this [knowingly wrongful act] exclusion is that [the
insurer] disclaimed coverage for all causes of action for which actual knowledge of
wrongdoing is an essential element.” 

construction, Kelly’s negligence
claim against Dr. Strnad does not fall under the American Home knowingly wrongful
act exclusion.

       An alternative, and also reasonable, interpretation is that the provision in
question excludes coverage for liability resulting from an act committed with the
actual, subjective knowledge that the act was negligent while allowing coverage where
the person merely should have known of his duty. Kelly contemplates this
interpretation of the policy in her brief on appeal. She argues, where “conduct by a
professional was and would be negligent and irresponsible, but not necessarily a
knowing commission of a wrongful act,” the policy exclusion would not apply. See
Byers v. Spaulding, 

, 895 (Mo. Ct. App. 1987) (“[A] plaintiff
asserting a cause of action based on the negligence of another in failing to act must
allege and prove that the defendant knew or should have known that failure to act was
likely to result in injury to the plaintiff.” (emphasis added)).

       In summary, we conclude the American Home insurance policy exclusion for
knowingly wrongful acts is ambiguous. See also Am. Home Assurance Co. v. Cohen,

, 369 (W.D. Wash. 1993) (holding a similar wrongful act exclusion
in an American Home policy ambiguous for other reasons), aff’d, 

(9th
Cir. 1995). This policy exclusion is poorly drafted, leaving open a question of what
it does and does not cover. The proper ruling from this court is to construe the
ambiguous policy exclusion against American Home. We hold the American Home
policy covers Dr. Strnad’s actions, entitling Kelly to indemnification from American
Home. See Kromback v. Mayflower Ins. Co., 

, 210 (Mo. 1992) (en
banc); Meyer Jewelry Co. v. Gen. Ins. Co. of Am., 

, 623 (Mo. 1968).



                                        -14-
       B.   Indemnification
       In American Home 

, we declined to find American Home had
a duty to indemnify Dr. Strnad’s estate because no fact-finding body had yet
considered whether Kelly’s claim, that Dr. Strnad was negligent in failing to warn
Kelly or someone else in a position to protect her, was causally linked to Kelly’s
damages. The arbitration panel previously held Dr. Strnad was liable to Kelly for
damages in the amount of $8 million arising from Dr. Strnad’s negligence. We still
do not know whether Kelly’s common law claim was the sole basis for the arbitration
award and subsequent judgment, although we suspect it was.

       For this reason, we again remand for further proceedings to determine if Kelly’s
damages identified in the arbitration award and judgment were caused, in whole or in
part, by conduct other than that alleged in Kelly’s common law claim. If so, the
district court must consider whether the other conduct which caused damages is
covered by the American Home policy, and if covered, whether the damages are
excluded by the policy.

III.   CONCLUSION
       We reverse and remand for further proceedings consistent with this opinion.
                      ______________________________




                                         -15-