Depositors Ins. Co. v. Dollansky, A17-0631

• Citation: 919 N.W.2d 684
• Decision Date: 14 November 2018
• Docket Number: A17-0631
• Parties: DEPOSITORS INSURANCE COMPANY, Appellant, v. Craig DOLLANSKY, Respondent, Julie Dollansky, Defendant.
• Court: Minnesota Supreme Court

919 N.W.2d 684

DEPOSITORS INSURANCE COMPANY, Appellant,

v.Craig DOLLANSKY, Respondent,Julie Dollansky, Defendant.

A17-0631

Supreme Court of Minnesota.

Filed: November 14, 2018

Michelle D. Hurley, Yost & Baill, LLP, Minneapolis, Minnesota, for appellant.

Mark K. Hellie, Beth K. Bussian, Regional Legal Staff Counsel, Eden Prairie, Minnesota, for respondent.

OPINION

HUDSON, Justice.

Minnesota Statutes § 60A.41(a) (2016) prohibits an insurance company from "proceed[ing] against its insured in a subrogation action where the loss was caused by the nonintentional acts of the insured." Depositors Insurance Company, which insured a motor home owned by Karavan Trailers, Inc., seeks to proceed in a subrogation action against Craig Dollansky, who rented the motor home from Karavan. At issue is whether Minn. Stat. § 60A.41(a) bars Depositors from proceeding against Dollansky in a subrogation action. We hold that it does.

FACTS

Craig Dollansky signed a rental agreement with Karavan for a 2001 Newell Motor Home ("the RV"). The RV caught fire while Dollansky was driving it in Nebraska. The cause of the fire is unknown, but nothing in the record suggests that intentional acts by Dollansky caused the fire or the subsequent damage to the RV. The damage to the RV totaled $204,895.05.

The rental agreement provided that Dollansky was responsible for all damages to the RV during the term of the agreement, regardless of the cause of the damage. Dollansky had obtained an extension of his personal-vehicle insurance for the RV, as required by the rental agreement. After the fire, Karavan submitted a claim for the full amount of the damages to Dollansky's insurer, American Family Insurance. American Family paid Karavan $4,500—that is, the $5,000 deductible set out in Karavan's insurance policy with Depositors minus the $500 deposit Dollansky had paid to Karavan. American Family denied the remainder of Karavan's claim.

After American Family's denial of the vast majority of the claim, Karavan submitted a claim to its own insurer, Depositors. Depositors paid Karavan $204,895.05 (the full amount of the damages) and then filed a complaint against Dollansky,¹ alleging that Depositors was subrogated to the rights of Karavan in the same amount.

Depositors and Dollansky filed cross-motions for summary judgment. Dollansky argued that Minn. Stat. § 60A.41(a) barred Depositors from subrogating against Dollansky because he was an "insured" under Karavan's policy with Depositors. Minnesota Statutes § 60A.41(a) states that "[a]n insurance company providing insurance coverage or its reinsurer for that underlying insurance coverage may not proceed against its insured in a subrogation action where the loss was caused by the nonintentional acts of the insured." Depositors disagreed and argued that Dollansky was not an "insured" because he had not purchased a policy from Depositors. Alternatively, Depositors argued that Dollansky was not an "insured" because its policy did not provide Dollansky with coverage for the damage caused to the RV.

The district court examined the policy Depositors issued to Karavan and focused on the policy's definition of "insured" in "Section V—Definitions": "any person or organization qualifying as an insured in the Who Is An Insured provision of the applicable coverage." The district court found that because the "Who Is An Insured" provision contained in Section II of the policy defines "insured" as including "[a]nyone else while using with your permission a covered ‘auto’ you own, hire or borrow," Dollansky was an "insured" for purposes of Minn. Stat. § 60A.41(a) because Karavan permitted Dollansky to use the covered vehicle, in this case, the RV. Accordingly, the district court denied Depositors' motion and granted Dollansky's motion, concluding that Depositors was barred by Minn. Stat. § 60A.41(a) from proceeding against Dollansky in a subrogation action. The district court then dismissed all claims against Dollansky.

Depositors appealed, and the court of appeals affirmed the district court. Depositors Ins. Co. v. Dollansky , 905 N.W.2d 513, 514 (Minn. App. 2017). The court of appeals rejected Depositors' argument that Dollansky was not an insured because he was not a named insured on Karavan's policy with Depositors. Id . at 516–17. Relying on the definitions contained in the policy with Depositors, the court held that Dollansky was an insured under the policy with Depositors. Id. at 518. Accordingly, the court concluded that " Minnesota Statutes section 60A.41(a) unambiguously bars Depositors' subrogation action." Id . Depositors petitioned for review, which we granted.

ANALYSIS

This case requires us to interpret Minn. Stat. § 60A.41(a) and the insurance contract between Depositors and Karavan. We review questions of statutory construction de novo. Am. Family Ins. Grp. v. Schroedl , 616 N.W.2d 273, 277 (Minn. 2000). "Interpretation of an insurance policy, and whether a policy provides coverage in a particular situation, are questions of law that we review de novo." Eng'g & Constr. Innovations, Inc. v. L.H. Bolduc Co. , 825 N.W.2d 695, 704 (Minn. 2013).

"When interpreting a statute, we first look to see whether the statute's language, on its face, is clear or ambiguous. A statute is only ambiguous when the language therein is subject to more than one reasonable interpretation." Schroedl , 616 N.W.2d at 277 (citation omitted) (internal quotation marks omitted). To determine whether a statute is ambiguous, we interpret it "as a whole, and the words and sentences therein are to be understood in the light of their context. Multiple parts of a statute may be read together so as to ascertain whether the statute is ambiguous. If a statute is unambiguous, we apply the statute's plain meaning." In re Dakota Cty. , 866 N.W.2d 905, 909 (Minn. 2015) (citations omitted) (internal quotation marks omitted).

Where a statute does not define a term, we may look to dictionary definitions to determine the common and ordinary meaning of a term. State v. Thonesavanh , 904 N.W.2d 432, 436 (Minn. 2017). Black's Law Dictionary defines "insured" as: "Someone who is covered or protected by an insurance policy.—Also termed assured ." Insured , Black's Law Dictionary (10th ed. 2014). Similarly, The American Heritage Dictionary defines "insured" as: "One who has or is covered by an insurance policy." The American Heritage Dictionary of the English Language 911 (5th ed. 2011). Webster's Third New International Dictionary, in contrast, defines "insured" as "a person whose life, physical well-being, or property is the subject of insurance: the owner of a policy of insurance: policyholder."Webster's Third New International Dictionary 1173 (2002).

These varied dictionary definitions permit at least two reasonable interpretations of the word "insured" in Minn. Stat. § 60A.41(a) : it could mean any party covered by some part of the insurance policy, or it could mean any party who is covered by the specific section of the insurance policy that applies to the particular loss at issue. Thus, it appears that Minn. Stat. § 60A.41(a) is ambiguous. See Thonesavanh , 904 N.W.2d at 435 (explaining that a statute subject to more than one reasonable interpretation is ambiguous).

Depositors argues, however, that the first of these interpretations is not reasonable because interpreting Minn. Stat. § 60A.41(a) to encompass all persons covered by the policy would make Minn. Stat. § 60A.41(b) (2016) superfluous. The court of appeals has held that Minn. Stat. § 60A.41(b) prohibits subrogation when two different policies, owned by two different persons but provided by the same insurance company, are implicated in the same loss. See Ill. Farmers Ins. Co. v. Schmuckler , 603 N.W.2d 138, 141 (Minn. App. 1999), rev. denied (Minn. Feb. 23, 2000). That is a different set of facts than we have here, where there is a single policy, owned by a single company (Karavan), covering two parties (Karavan and Dollansky). While some factual situations conceivably might fall under both Minn. Stat. § 60A.41(a) and Minn. Stat. § 60A.41(b), some circumstances will only meet the requirements of one or the other—thus, the two provisions are not duplicative. Although we may read multiple parts of a statute together to determine whether language is ambiguous, the context provided by Minn. Stat. § 60A.41(b) does not compel us to conclude that the first interpretation of "insured" in Minn. Stat. § 60A.41(a) —any covered party—is unreasonable, as Depositors urges.

Nor are we persuaded by Depositors' argument that the Legislature intended the definition of "insured" in Minn. Stat. § 60A.41(a) to apply only to named insureds. Depositors' proposed interpretation of the statute is not reasonable. The Legislature could have used the phrase "named insured" if it intended to do so. The Legislature used "named insured" in two other provisions of chapter 60A. Minn. Stat. § 60A.0811, subd. 1(2) (2016) (" ‘insured’ means any named insured, additional insured, or insured under an insurance policy"); Minn. Stat. § 60A.196(f) (2016) ("If more than one insured from an affiliated group are named insureds on a single nonadmitted insurance contract...."). The Legislature also used "named insured" in numerous provisions throughout chapter 65B, which governs automobile insurance. We do "not add words to the statute that the Legislature did not supply," Graphic Commc'ns Local 1B Health & Welfare Fund "A" v. CVS Caremark Corp. , 850 N.W.2d 682, 696 n.10 (Minn. 2014), so we will not add the word "named" to the statute before the word "insured" when the Legislature did not.

Finally, Depositors argues that any reading of Minn. Stat. § 60A.41(a) that includes Dollansky within the definition of "insured" is improper because the definition must be read in light of Minn. Stat. § 60A.41(d) (2016). Specifically, the latter provision states: "Nothing in this section prevents an insurer from allocating the loss internally to the at-fault insured...