Brill v. Mid-Century Ins. Co.

• Decision Date: 15 July 2020
• Docket Number: No. 19-1416,19-1416
• Citation: 965 F.3d 656
• Parties: Toni BRILL, AS the TRUSTEE FOR the Surviving Next-of-Kin of Richard BRILL, deceased, Plaintiff - Appellant v. MID-CENTURY INSURANCE COMPANY, part of the Farmers Insurance Group of Companies, Defendant - Appellee
• Court: U.S. Court of Appeals — Eighth Circuit

965 F.3d 656

Toni BRILL, AS the TRUSTEE FOR the Surviving Next-of-Kin of Richard BRILL, deceased, Plaintiff - Appellant

v.MID-CENTURY INSURANCE COMPANY, part of the Farmers Insurance Group of Companies, Defendant - Appellee

No. 19-1416

United States Court of Appeals, Eighth Circuit.

Submitted: March 10, 2020

Filed: July 15, 2020

Stephanie Ann Ball, FRYBERGER & BUCHANAN, Duluth, MN, for Plaintiff - Appellant.

Brock P. Alton, WINTHROP & WEINSTINE, Minneapolis, MN, Roger Herbert Gross, GISLASON & HUNTER, Minneapolis, MN, for Defendant - Appellee.

Before ERICKSON, GRASZ, and KOBES, Circuit Judges.

GRASZ, Circuit Judge.

This appeal involves a dispute between Toni Brill and Mid-Century Insurance Company over the amount Mid-Century owes to Toni after her husband, Richard, was struck and killed by an underinsured motor vehicle. Toni appeals the district court's¹ award of summary judgment to Mid-Century. We affirm.

I. Background

The Brills lived together in Wisconsin when Mid-Century issued them an automobile policy effective from March 2015 to March 2016. In May or June of 2015, Richard moved in with a friend in Duluth, Minnesota, after separating from Toni, who remained in Wisconsin.²

Later, in September of that year, while riding his bicycle in the Duluth area, Richard was killed after being negligently hit by a car operated by Lowell Rudd. Rudd had an insurance policy on his vehicle, but its $100,000 limit for bodily injury liability was not enough for the more than $350,000 needed to compensate for Richard's bodily injury and resulting death. Richard's wife Toni agreed to settle a wrongful death lawsuit, collecting $103,000 from Rudd and his insurer. This case centers on Toni's subsequent effort to recover from the Brills’ own insurer, Mid-Century, the difference between the damages suffered and the amount collected from Rudd.

The Brills’ Mid-Century policy includes underinsured motor vehicle ("UIM") coverage, with a per-person limit of $250,000. The parties disputed how much Mid-Century was required to pay. Mid-Century argued the policy language dictates a "limits-less-paid" approach, under which the $103,000 Toni recovered is deducted from the $250,000 policy limit. On the other hand, Toni argued Minnesota law dictates an "add-on" approach should apply, under which she is entitled to add the $250,000 policy limit to the $103,000 recovered, so long as the resulting total does not exceed the total damages awarded.

The Brills’ policy prescribes the limits-less-paid approach advanced by Mid-Century. Specifically, it states Mid-Century's "maximum liability under the [UIM coverage] is the amount of the applicable limits less any amounts recovered from any person ... that may be legally responsible for the bodily injury or death for which the payment is made ...." (emphasis added). And it is undisputed the law of Wisconsin — where the Brills resided when the policy was issued — expressly permits such a limits-less-paid approach. See Wis. Stat. § 632.32(5)(i)(1) ("A policy may provide that the limits under the policy for ... [UIM] coverage for bodily injury or death resulting from any one accident shall be reduced by ... [a]mounts paid by or on behalf of any person ... that may be legally responsible for bodily injury or death for which the payment is made.").

Nonetheless, Toni argued she is entitled to recover under the add-on approach, which Minnesota law requires insurers to offer within that state. See Minn. Stat. § 65B.49, subdiv. 4a (stating "the maximum liability of an insurer is the amount of damages sustained but not recovered from the insurance policy of the driver or owner of any underinsured at fault vehicle"). Toni claimed this approach was applicable because Mid-Century was licensed to write policies in Minnesota and, at the time of the Minnesota accident, Richard had moved to Minnesota and was residing in the state.³

The district court agreed with Mid-Century's view that Minnesota's add-on approach was not implicated because the policy was issued in Wisconsin to a Wisconsin resident and had not been renewed after Richard moved to Minnesota. Thus, the district court granted Mid-Century's motion for summary judgment, denied Toni's motion for summary judgment, and concluded Mid-Century owed Toni $147,000 under the policy's limits-less-paid approach. Toni appeals, arguing we should reverse the award of summary judgment to Mid-Century or alternatively certify the state-law question to the Minnesota Supreme Court.

II. Legal Standard

"This court reviews de novo ‘the district court's grant of summary judgment and its interpretation of state insurance law.’ " C.S. McCrossan, Inc. v. FDIC , 932 F.3d 1142, 1144–45 (8th Cir. 2019) (quoting Grinnell Mut. Reinsurance Co. v. Schwieger , 685 F.3d 697, 700 (8th Cir. 2012) ). "The question is whether the record, viewed most favorably to the non-moving party, shows no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law." Id. at 1145 (quoting Volk v. Ace Am. Ins. Co. , 748 F.3d 827, 828 (8th Cir. 2014) ).

The parties both focus on Minnesota case law to determine whether Minnesota's No Fault Act requires Toni's UIM claim be calculated under the add-on approach. We are " ‘bound by the decision of the Minnesota Supreme Court’ when interpreting Minnesota law." Id. (quoting Integrity Floorcovering, Inc. v. Broan-Nutone, LLC , 521 F.3d 914, 917 (8th Cir. 2008) ). Where the Minnesota Supreme Court has not spoken on an issue, we must predict how it would decide the issue. Id. To do so, we "may consider relevant state precedent, analogous decisions, considered dicta ... and any other reliable data." Id. (ellipses in original) (quoting Integrity Floorcovering , 521 F.3d at 917 ).

III. Discussion

We begin our analysis with this observation — Mid-Century and the Brills negotiated a policy that unambiguously provides that a UIM claim be calculated using the limits-less-paid approach. The Mid-Century policy was issued in Wisconsin when both Toni and Richard were Wisconsin residents. And Wisconsin law permits such an approach. Wis. Stat. § 632.32(5)(i)(1). Consequently, under the district court's order, Toni would receive precisely the UIM coverage amount agreed upon by the Brills and Mid-Century.

The question we must answer is this: Does the fact Mid-Century was licensed to write policies in Minnesota, combined with Richard's subsequent move to and residency there, dictate that the Mid-Century policy must be reformed to calculate UIM coverage under Minnesota's add-on approach? We conclude it does not.

Section 65B.49 of the Minnesota Statutes governs the mandatory offer of insurance benefits. And subdivision 3a of this section governs an insurer's requirement to provide minimum UIM (and uninsured) coverage. It provides that "[n]o plan of reparation security may be renewed, delivered, or issued for delivery, or executed in [Minnesota] with respect to any motor vehicle registered or principally garaged in [Minnesota] unless separate ... [UIM] coverage[ is] provided therein." § 65B.49, subdiv. 3a(1) (emphasis added). It further provides that minimum coverage be at least $25,000 for the injury or death of a person. Id. Then, in subdivision 4a, the statute sets forth the add-on method for calculating [UIM] coverage. § 65B.49, subdiv. 4a.

Consistent with the plain language of the statute, the Minnesota Supreme Court has held that in order for Minnesota law to mandate an insurer provide uninsured coverage consistent with that required by section 65B.49, the insurance policy had to be "renewed, delivered, or issued for delivery, or executed in [Minnesota]." Cantu v. Atlanta Cas. Cos ., 535 N.W.2d 291, 292 (Minn. 1995) (quoting § 65B.49, subdiv. 3a(1) ).⁴ This was true even when the insured relocated to and resided in Minnesota after obtaining a policy but before the accident. Cantu v. Atlanta Cas. Cos. , 532 N.W.2d 261, 262, 264 (Minn. Ct. App.), rev'd , 535 N.W.2d 291 (Minn. 1995). Applying the rationale of Cantu to the facts here, even though Richard had relocated to Minnesota before the accident, the add-on method for calculating UIM coverage is not required, because the policy was issued, executed, and delivered in Wisconsin, and had not been renewed while Richard was residing in Minnesota.

Toni argues Cantu and subdivision 3a are not relevant and urges that we should instead focus on subdivision 1 of section 65B.50, which provides that "[e]very insurer licensed to write motor vehicle accident reparation and liability insurance in [Minnesota] shall ... as a condition to such licensing ... file with the commissioner and thereafter maintain a written certification that it will afford at least minimum security provided by section 65B.49 to all policyholders .... " § 65B.50, subdiv. 1. According to Toni, this mandate requires insurers such as Mid-Century, that issue liability insurance in Minnesota, to calculate UIM coverage for motor vehicles garaged within the state according to the add-on method detailed in section 65B.49, subdiv. 4a, regardless of whether the policies had been renewed, delivered, issued for delivery, or executed within Minnesota.

Toni points to Schossow v. First Nat'l Ins. Co. of Am. , where the Minnesota Court of Appeals both distinguished⁵ Cantu and offered its own interpretation of sections 65B.49 and 65B.50, subdiv. 1. 730 N.W.2d 556, 561–62 (Minn. Ct. App. 2007) The court in Schossow determined an insurer was required to calculate UIM coverage according to Minnesota's add-on method for a Minnesota resident, even though the policy was issued out of state and directed a limits-less-paid method of calculation. Id . We decline to follow the interpretative approach set forth in Schossow for the following reasons.

First, the facts in Schossow are distinguishable from the present case. Unlike Richard, the insured in Schossow was a resident of Minnesota at the time the policy was issued in North Dakota. Id. at 558, 559–60. This is significant...