American Standard Ins. Co. v. Le

• Decision Date: 08 August 1996
• Docket Number: No. CX-95-1239,CX-95-1239
• Parties: AMERICAN STANDARD INSURANCE COMPANY, Appellant, v. Dang Van LE, Respondent, Truong Huu Do, et al., Defendants, Huong Thi Nguyen, Respondent.
• Court: Minnesota Supreme Court

Page 923

551 N.W.2d 923

AMERICAN STANDARD INSURANCE COMPANY, Appellant, v. Dang Van LE, Respondent, Truong Huu Do, et al., Defendants, Huong Thi Nguyen, Respondent.

No. CX-95-1239.

Supreme Court of Minnesota.

Aug. 8, 1996.

Syllabus by the Court

An insured is not entitled to recover attorney fees incurred in maintaining or defending an action for declaratory judgment to determine the question of insurance coverage unless the insurer has breached the insurance contract in some respect--usually by wrongfully refusing to defend the insured.

Richard Dale, Dale & Purtell, Sioux Falls, SD, for appellant.

Paul Malone, Malone & Mailander, Slayton, James E. Malters, Von Holtum Maltus Shepherd, Worthington, for respondents.

Carol Lynn O'Gara, Sieben, Grose, Von Holtum, Minneapolis, for amicus curiae.

Considered and decided by the court en banc without oral argument.

OPINION

COYNE, Justice.

Plaintiff American Standard Insurance Company issued its auto policy to defendant Le. Defendants Le, Do, and Do's wife Tran all worked at Monfort Packing Plant in Worthington. As Le and his girlfriend Diep left the plant on November 30, 1993, Do cursed at Le and made an obscene gesture. The two men argued, and Tran began an argument with Diep. Do's tenant and rider, Ms. Nguyen, broke up the altercation, but as the five left the parking lot, Do said he would meet Le later to finish the fight.

Do, Tran and Nguyen left in Do's pickup truck. Le and Diep followed in Le's van. Whenever Le attempted to pass, Do swerved in front of him until Do stopped on the highway, forcing Le to stop behind him. Tran and Nguyen pulled Le out of the van and the two men fought until Le sustained a deep stab wound in his right hand. Le leaped back into his van and drove right into Do's pickup. Nguyen, who was standing between the two vehicles, was crushed between them. The impact was sufficient to drive Do's truck forward about 20 feet. Le then backed up, swerved to the right of the pickup, running over Nguyen before he once again hit Do's truck.

A police officer testified that Le had told him at the scene of the collision that he had intentionally struck the pickup and that he had seen Nguyen in front of his van. The officer also stated that the acceleration marks left at the scene "do not show up until the van actually makes contact with the back of the pickup truck and the acceleration marks are still continuing after contact is made." A witness said Nguyen spoke to Le and Le said he told her to move or he might hit her. Le told another officer that he had intended to run into the truck the second time. As a result of these collisions the box of the truck was shoved into the cab.

About a month after the incident, Nguyen told a police investigator that Le told her after he reentered the van that he wanted "to hit [her] with his van." Le ultimately pled guilty to criminal vehicular operation resulting in great bodily harm.

Huong Thi Nguyen brought an action against Dang Van Le and Truong Huu Do to recover damages for her injuries. American Standard assumed Le's defense in that action pursuant to a reservation of its right to assert that Nguyen's claim was not within the residual liability coverage afforded by its policy. Subsequently, American Standard commenced a declaratory judgment action to resolve the coverage question.

Of course, at the trial of the declaratory action, Le testified that he had not intended to strike Do's truck and that he had not seen Nguyen standing in front of his van. The jury found that Le had not intentionally injured Nguyen when he struck her with his van. On March 10, 1995, the court issued findings of fact, conclusions of law, and order for judgment. Included in the court's findings of fact were the findings that American Standard had "refused to defend or indemnify Defendant Dang Van Le in the personal injury action" and that Le did not intentionally injure Huong Thi Nguyen when he struck her with his van. On the basis of those facts, the court concluded that American Standard owed Le the duties to defend and indemnify him pursuant to its insurance policy for the claims asserted in Nguyen's action and also that Le was entitled to recover reasonable attorney fees incurred in defense of the declaratory judgment action.

Le served notice of making and filing of the order on American Standard by mail on March 13, 1995, ¹ together with his application for costs and disbursements. On March 23rd American Standard objected to Le's taxation of costs and disbursements, and a hearing was set for April 4th but was changed to April 6, 1995 because of counsel's conflicting schedule.

On March 27, 1995, American Standard served and filed motions for amended findings, judgment notwithstanding the verdict or, in the alternative, a new trial. The motions were unaccompanied by a notice of motion, but it appears that the parties anticipated that the post-trial motions were to be heard with the objections to costs and disbursements. On the same day, March 27, the district court administrator issued a notice of hearing informing counsel that the court had rescheduled the matter previously set for hearing on April 6, 1995 to April 18, 1995 at 11:00 a.m. Counsel for both American Standard and Le were present at the appointed time prepared to argue the post-trial motions as well as the objection to costs and disbursements.

At the hearing counsel for Le and for Nguyen both attacked the post-trial motions on the ground the hearing was untimely. On May 3, 1995 the court issued its order dismissing American Standard's post-trial motions as untimely heard. In the alternative, the motions were denied except for amendment of the findings of fact to acknowledge that American Standard had undertaken the defense of Nguyen's action subject to a reservation of rights and had retained counsel to represent Le in that action. Despite the dismissal of the motion to amend the findings and conclusions, the court went on to deny the motion, relying on Economy Fire & Cas. Co. v. Iverson, 445 N.W.2d 824, 827 (Minn.1989), for its decision that American Standard was obliged to pay the cost of Le's defense of the declaratory action. On appeal the court of appeals affirmed.

Our review here is limited to the question of the propriety of the award of attorney fees in this declaratory action, but prefatory to addressing that issue we must decide whether American Standard's post-trial motions were properly dismissed as untimely.

Rule 59.03, Minn.R.Civ.P., provides that a motion for a new trial must be served within 15 days after service of notice by a party of the filing of the decision or order. It is undisputed that the post-trial motions were served timely. Rule 59.03 also provides, however, that the motion is to be heard within 30 days after such notice of filing, unless the time for hearing is extended by the court within the 30-day period for good cause shown. Inasmuch as the notice of filing was served by mail on March 13, 1995, Monday, April 17, 1995 was the last day on which the motions could be heard absent an extension granted by the court for good cause on or before April 17.

None of the parties requested an extension of the time for hearing, and, according to the trial judge, he did not extend the time. Apparently the hearing was rescheduled by the court administrator without consulting either the judge or any of the parties although the court administrator's notice represented to the parties that the matter had been "rescheduled by the court." ²

The disposition of the problems resulting from the series of post-trial technical defects clearly demonstrates the necessity for counsel--and the court administrator as well--to acquaint themselves with the Rules of Civil Procedure and the General Rules of Practice and to conduct themselves accordingly.

At the hearing on April 18, counsel for Le and Nguyen questioned the court's jurisdiction to hear the post-trial motions, complaining that the hearing was untimely. ³ Apparently, those counsel then proffered the notice of making and filing of the order with proof of service by mail because the court noted that it had not been filed with the court administrator's office. Citing Woodrow v. Tobler, 269 N.W.2d 910 (Minn.1978), American Standard argued that the hearing was timely because it had been reset to April 18 by the court. Distinguishing Woodrow on the ground that there the judge's unavailability constituted good cause, the judge dismissed the post-trial motions as untimely because he had been available within the 30-day period for hearing, and there was, therefore, no good cause for an extension of which the judge was not even aware.

In the particular circumstances of this case, it seems to us unreasonable to penalize one party for the benefit of another who is also at fault. The setting of the hearing date resulted not merely from the failure of American Standard's counsel to include a notice of motion with his post-trial motion papers but depended as well on the failure of Le's or Nguyen's counsel to file the notice of making and filing order with proof of service. ⁴ Moreover, although there surely was no judicial determination of good cause, neither was the setting of the hearing date the product of counsel's unilateral action. United States Leasing Corp. v. Biba Information Processing Servs., Inc., 489 N.W.2d 231, 232 (Minn.1992). Rather the hearing was rescheduled beyond the 30-day limitation by the court administrator's unilateral action, and counsel were notified in writing that the hearing had been "rescheduled by the court." Undoubtedly, the defect in the proceeding would have come to light had counsel queried the court about the reason for the resetting, but Rule 59.03 does not prescribe the form an extension is to take and it seems to us that counsel for American Standard was justified in...