Anderson v. State Farm Fire and Cas. Co.
| Decision Date | 16 December 1986 |
| Docket Number | No. C1-86-828,C1-86-828 |
| Citation | 397 N.W.2d 416 |
| Parties | William J. ANDERSON, et al., Respondents, v. STATE FARM FIRE AND CASUALTY COMPANY, Appellant. |
| Court | Minnesota Court of Appeals |
Syllabus by the Court
The trial court's finding that respondent had an insurable interest in a garage owned by his former spouse was clearly erroneous, because respondent did not own the structure or possess any legal or equitable rights in the structure.
Gerald J. Brown, Brown, Andrew, Hallenbeck, Signorelli & Zaller, P.A., Duluth, for respondents.
Douglas R. Archibald, Cosgrove & Haskell, Minneapolis, for appellant.
Heard, considered and decided by NIERENGARTEN, P.J., and PARKER and CRIPPEN, JJ.
State Farm Fire and Casualty Company appeals a trial court decision that both respondent William Anderson and his former spouse had insurable interests in a garage owned by the former spouse, and that both were entitled to recover payments under their respective policies when the property was destroyed by fire. State Farm contends it is not liable to Anderson for the property loss because the two policies were concurrent and because Anderson did not have an insurable interest in the property at the time of the fire. We reverse.
Respondent William Anderson and his former spouse, Nancy Anderson, acquired a parcel of land upon which they constructed a garage. State Farm insured the property against fire loss under an endorsement to the Andersons' homeowner's policy. When the Andersons were divorced in April 1982, Nancy Anderson acquired legal title to the 40-acre parcel containing the garage.
With Nancy Anderson's knowledge, William Anderson continued to use the garage rent-free after the divorce. He maintained control of the premises and stored some of his personal property in the structure. State Farm continued to insure the garage under an endorsement to William Anderson's homeowner's policy for his own residence.
William Anderson paid the policy premiums for the years 1982, 1983, and 1984. Nancy Anderson did not carry separate insurance on the property until mid-1984, when she acquired her own policy from State Farm. Upon her return to the Duluth area in July 1984, she changed her mind about letting William Anderson store his personal belongings in the garage. Approximately one and a half weeks before the fire, she asked William Anderson to remove his property from the garage and gave him two weeks to do so.
The garage and its contents were completely destroyed by fire on August 15, 1984. Both Andersons filed claims with State Farm under their respective policies. State Farm paid Nancy Anderson the full value of the destroyed garage and paid William Anderson the value of his personal property lost in the fire, but refused to pay his claim for the value of the garage.
William Anderson's claim against State Farm was tried in January 1986. The trial court concluded that he had an insurable interest in the garage and that the two policies were not concurrent because the insurance was in favor of different people with different interests. Consequently, the trial court ordered judgment for him in the amount of $12,730 plus interest, costs, and disbursements. State Farm appeals, contending the trial court erred by ruling that William Anderson had an insurable interest, by ruling that State Farm was obligated to pay maximum claim benefits under two policies covering the same property, and by concluding that he had an insurable interest equal to the maximum policy limits in the insurance contract. Because we conclude that William Anderson did not have an insurable interest, we address only that issue.
Did the trial court err by ruling that William Anderson had an insurable interest in the property at the time of the fire?
In all actions tried upon the facts without a jury * * * the court shall find the facts specially and state separately its conclusions of law thereon and direct the entry of the appropriate judgment; * * *. Findings of fact shall not be set aside unless clearly erroneous * * *.
Minn.R.Civ.P. 52.01. See Frank v. Illinois Farmers Insurance Co., 336 N.W.2d 307, 311 (Minn.1983).
A party's rights to insurance proceeds are determined by the status of the party's interests at the time of the fire. First Guaranty Corp. v. Continental Western Insurance Co., 361 N.W.2d 137, 138 (Minn.Ct.App.1985), pet. for rev. denied, (Minn. Apr. 12, 1985) (citing National Fire Insurance Co. of Hartford Connecticut v. Finerty Inv. Co., 170 Okla. 44, 38 P.2d 496 (1934)). Whether a person has an insurable interest in property is a question of fact. See Hane v. Hallock Farmers Mutual Insurance Co., 258 N.W.2d 779, 781 (Minn.1977).
Anderson contends he had an insurable interest in the garage for several reasons. First, he used the structure to store personal property after his divorce in 1982 until August 1984, when the building was destroyed. He argues that he derived substantial benefits from use of the garage because he was not required to pay rent. Second, the building provided storage space that his own residence lacked. Third, he contends he had a future interest in the garage because he was interested in acquiring the land from Nancy Anderson for his own economic benefit and personal purposes. Finally, Anderson contends he had an insurable interest and that it was prudent to insure the premises and its contents against losses because third persons occasionally entered onto the land or worked in the garage at his direction.
The Minnesota Supreme Court has stated that "insurable interests" are not necessarily synonymous with absolute property rights:
The authorities all agree that it is not necessary that the insured should have an absolute right of property, and that he has an insurable interest if, by the destruction of the property, he will suffer a loss, whether he has or has not any title to, lien upon, or possession of the property itself.
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