Brua v. Minnesota Joint Underwriting Ass'n, No. A07-1866.
| Decision Date | 11 February 2010 |
| Docket Number | No. A07-1866. |
| Parties | Steven BRUA, et al., Respondents, v. The MINNESOTA JOINT UNDERWRITING ASSOCIATION, Appellant. |
| Court | Minnesota Supreme Court |
Patricia Yoedicke, Robins, Kaplan, Miller & Ciresi, L.L.P., Minneapolis, MN; and David W. VanDerHeyden, VanDerHeyden and Ruffalo, P.A., Rochester, MN, for respondents.
John M. Bjorkman, Paula Duggan Vraa, Larson King, L.L.P., St. Paul, MN, for appellant.
Mark J. Condon, Stacey A. Molde, Johnson & Condon, P.A., Minneapolis, MN, for amicus curiae Minnesota Defense Lawyers Association.
Michael C. Snyder, Meshbesher & Spence, Ltd., Minneapolis, MN, for amicus curiae Minnesota Association for Justice.
Michael Brua died in a single-car accident after drinking at the Bend in the Road bar in December 2003. An action under the Minnesota Civil Damages Act, Minn.Stat. § 340A.801 (2008), was brought against the Bend in the Road bar and its proprietors, who in turn made a claim for coverage from their insurance carrier, appellant the Minnesota Joint Underwriting Association (MJUA). A dispute arose over the extent of insurance coverage under the relevant policy for the claims for pecuniary loss suffered by Brua's family. As part of a settlement agreement, Bend in the Road and its proprietors assigned to the Bruas the right to bring a declaratory action to determine the extent of insurance coverage. As a result of the settlement agreement, respondents Steven Brua, Roxanne Brua, and Travis Brua brought an action against MJUA to determine coverage for pecuniary loss. The primary issue in the case was whether pecuniary loss coverage was subject to a $50,000 per person, $100,000 per occurrence limit, as MJUA contended, or whether pecuniary loss coverage was only subject to the $300,000 aggregate policy limit, as the Bruas contended. The district court granted summary judgment in favor of the Bruas, and the court of appeals affirmed. We reverse.
The material facts in this case are undisputed. On December 30, 2003, Michael Brua, after consuming alcohol at the Bend in the Road bar, was involved in a single-car accident and died as a result of his injuries. On December 19, 2005, respondents Steven Brua (Michael's father), Roxanne Brua (Michael's mother), and Travis Brua (Michael's brother), brought an action against Bend in the Road and its proprietors. The Bruas alleged that the defendants were liable under Minnesota's Civil Damages Act, Minn.Stat. § 340A.801, for illegally selling alcohol to Michael Brua. The Bruas alleged that they suffered loss of means of support, property damage, and other pecuniary loss. They did not make bodily injury claims. Although the Bruas initially sought damages for loss of means of support, they ultimately dropped those claims, making property damage and pecuniary loss the only damages sought. At the time of Michael's death, Bend in the Road and its proprietors held a liquor liability insurance policy issued by MJUA.
The parties to the action eventually reached a settlement. Under the terms of the agreement, MJUA agreed to pay the Bruas $108,000—representing a payment of $100,000 for pecuniary loss and $8,000 for property damage. During the course of the settlement negotiations, however, the parties were unable to agree on the total amount of insurance coverage available to Bend in the Road and its proprietors under the MJUA policy for the pecuniary loss claims asserted by the Bruas. MJUA argued that its liability for pecuniary loss was limited to $100,000 under the terms of the policy; the Bruas argued that only the policy's $300,000 policy period aggregate limit applied to their pecuniary loss claims. As part of the settlement agreement, the original defendants (Bend in the Road and its proprietors) assigned to the Bruas "any rights that the Defendants may have against MJUA in connection with the Brua action." The settlement agreement further stated that the Bruas will "have standing to bring a declaratory judgment action against MJUA," and "the only issue [to be resolved] is the limits available under the MJUA policy for pecuniary loss." The agreement also provided that
Minnesota's Civil Damages Act, known colloquially as the Dram Shop Act, provides that
[a] spouse, child, parent, guardian, employer, or other person injured in person, property, or means of support, or who incurs other pecuniary loss by an intoxicated person or by the intoxication of another person, has a right of action in the person's own name for all damages sustained against a person who caused the intoxication of that person by illegally selling alcoholic beverages.
Minn.Stat. § 340A.801, subd. 1.
Another statutory provision requires establishments holding liquor licenses to demonstrate proof of financial responsibility for potential liability: "No retail license may be issued, maintained or renewed unless the applicant demonstrates proof of financial responsibility with regard to liability imposed by section 340A.801." Minn. Stat. § 340A.409, subd. 1 (2008). The statute goes on to state that
[t]he minimum requirement for proof of financial responsibility may be given by filing:
(1) a certificate that there is in effect for the license period an insurance policy . . . providing at least $50,000 of coverage because of bodily injury to any one person in any one occurrence, $100,000 because of bodily injury to two or more persons in any one occurrence, $10,000 because of injury to or destruction of property of others in any one occurrence, $50,000 for loss of means of support of any one person in any one occurrence, and $100,000 for loss of means of support of two or more persons in any one occurrence;
(2) a bond of a surety company with minimum coverages as provided in clause (1); or
(3) a certificate of the commissioner of finance that the licensee has deposited with the commissioner of finance $100,000 in cash or securities which may legally be purchased by savings banks or for trust funds having a market value of $100,000.
Id. In addition, the statute provides that "[a]n annual aggregate policy limit for dram shop insurance of not less than $300,000 per policy year may be included in the policy provisions." Id.
Another statute outlines the function and purpose of MJUA, stating that MJUA was "created to provide insurance coverage to any person or entity unable to obtain insurance through ordinary methods if the insurance is required by statute." Minn.Stat. § 62I.02, subd. 1 (2008). In addition, the law requires that liquor liability insurance policies issued by MJUA "contain at least the minimum coverage required by section 340A.409, subdivision 1." Minn.Stat. § 62I.02, subd. 4 (2008).
The MJUA insurance policy issued to Bend in the Road stated that "[w]e will pay on your behalf, subject to the coverage limit afforded under this contract for each occurrence, all sums you shall become legally obligated to pay as damages because of injury as a result of the sale . . . of intoxicating liquor." The policy defined "damages" to include "all damages recoverable under Minnesota Statute 340A.801." On the declarations page, the policy contained the following limitations on liability:
BODILY INJURY $ 50,000 EACH PERSON
$100,000 EACH OCCURRENCE
PROPERTY DAMAGE $ 10,000 EACH OCCURRENCE
LOSS OF MEANS OF SUPPORT $ 50,000 EACH PERSON
$100,000 EACH OCCURRENCE
ANNUAL AGGREGATE $300,000 ANNUALLY
An amendatory endorsement to the MJUA policy defined "bodily injury" as "bodily injury, sickness, or disease sustained by a person, including death resulting from any of these, and pecuniary loss." The endorsement also defined "pecuniary loss" as "loss of aid, advice, comfort, and protection that has a money value other than loss of means of support, resulting from a person's death or recoverable under applicable law."1
On April 12, 2007, the Bruas filed a complaint against MJUA seeking the declaratory judgment described in the settlement agreement. Specifically, the Bruas argued that the provision of the policy defining "bodily injury" as including "pecuniary loss" was void and unenforceable. Therefore, according to the Bruas' argument, only the policy's $300,000 aggregate annual limit applied to their claims of pecuniary loss.
Both parties moved for summary judgment and the district court granted the Bruas' motion and denied MJUA's motion. The district court held that Minn.Stat. § 340A.409, subd. 1, requires insurance companies to provide minimum coverage of $100,000 per occurrence for bodily injury, and that true "bodily injury" must be the only type of damage subject to that fund in any claim. Consequently, the district court agreed with the Bruas that the policy provision defining bodily injury as including pecuniary loss impermissibly diluted the statutorily required minimum coverage for bodily injury claims, and was therefore void and unenforceable.
MJUA appealed, and the court of appeals affirmed, but on different grounds. Brua v. Minn. Joint Underwriting Ass'n, No. A07-1866, 2008 WL 4705427, at *3 (Minn.App. Oct. 28, 2008). The court of appeals concluded that MJUA failed to offer the minimum required amount of insurance to pay claims for pecuniary loss. The court of appeals reasoned that
[i]f Minn.Stat. §§ 340A.409, subd. 1, and 340A.801 are to be construed to give effect to all of their provisions, the requirement that "proof of financial responsibility with regard to...
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